Month: August 2014

50,000 FOIA Requests You’ll Never Be Able to Make From the FBI

The indefatigable folks at
MuckRock, a site dedicated to making freedom of information
requests, has some bad news: A huge number of documents were
permanently destroyed by flooding of the FBI building in
Washington, DC last year.

“Last week, the FBI got back with their initial response, and
it’s disturbing, to say the least,” explains MuckRock, which

published their findings on Monday:

There’s over five hundred pages, each listing fifty plus
damaged/destroyed documents. And again, this is
the initial response.

At MuckRock, we believe that digitization is an important
component of promoting transparency, both in ensuring dissemination
of information, and guaranteeing the long term survival of
documents. Incidents like this – and the staggering loss to both
history and accountability they incur – are regrettable examples of
why. 

There were so many documents, it took almost
an entire year to put the request together.

This flood took place last April. It’s not the first time water
damage has ruined FBI documents. When Hurricane Sandy hit New York,
the FBI experienced what Salon described as a
“huge and still unquantifiable loss of records” that “between 8,000
and 9,000 cardboard boxes, each capable of storing hundreds of
documents from investigations and cases spanning at least two
decades” were lost. 

You can
click here for the 500ish page list, but it’s not exactly
light reading. 

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Why Is The US Treasury Suddenly Concerned About "Loss Of Market Access"

Earlier we revealed that one of the key topics of discussion during yesterday’s quarterly meeting of the TBAC committee with government workers (including Under Secretary for Domestic Finance Mary Miller, Assistant Secretary for Financial Markets Matthew S. Rutherford, Deputy Assistant Secretary for Federal Finance James G. Clark, and Director of the Office of Debt Management Fred Pietrangeli, and two NY Fed staffers, Nathaniel Wuerffel and Lorie Logan) was whether or not markets had become far too complacent, there was another, even more important topic of discussion than simply the beaten dead horse which is the fate of manipulated stock markets.  The topic: the US Treasury suddenly losing access to capital markets.

This is how the Treasury framed the discussion:

Pursuant to the Committee’s request at the April meeting that Treasury present a cash balance management framework that mitigates certain risks, DAS Clark began his presentation by reviewing Treasury’s current cash balance objectives.  He explained that Treasury’s main sources of cash are susceptible to risk, noting that Treasury has historically focused on risks associated with errors in fiscal forecasting.  Clark stated that several events had made it clear that market access and settlement risks could also potentially impair Treasury’s ability to fund government expenditures for several business days.

 

A detailed discussion ensued amongst Committee members around the benefits and potential concerns related to holding a higher cash balance in order to mitigate the consequence of losing market access.  The Committee concluded that it would be cost effective and prudent for Treasury to hold a higher cash balance.  They suggested that Treasury should continue to analyze the details of maintaining a higher cash balance and present its findings at an upcoming TBAC meeting.

In other words back in April, the US Treasury for reasons unknown, tasked the TBAC to consider levels of cash funding needs for the US treasury as a result of “certain risks.”

Specifically as a result of “several events” among them the December 2, 2013 delay of a 4 week bill auction due to IT issues, Super Storm Sandy in October 2012, and September 11, 2001, the Treasury has suddenly – five years into the recovery – gotten concerned that its ability to fund government expenditures for “several business days” could be “impaired.”

As examples of market disruption, the Treasury mentions two: Hurricane Sandy: 1.5 days and September 11th: 2-3 days.

The TBAC then responds that the “Cash required to cover the worst 1-5 days since FY2009 is relatively constant at approximately $331 billion.”

 

Here is what the TBAC finds: “Historically, Treasury has only had enough cash to withstand a loss of market access for approximately 2 days.“

Further:

  • Treasury would have been protected against losing market access for 1 day roughly 80 percent of the time.
  • Treasury would have been protected against losing market access for 5 days less than 10 percent of the time.

But it is the TBAC’s punchline that is most important:

If Treasury lost market access for a short period of time, the U.S. government would face a substantial cash shortfall.

  • Since the beginning of the financial crisis, on average, Treasury would have faced an $28 billion cash shortfall if market access had been lost for 3 days.
  • This shortfall increases to $89 billion if market access had been lost for 5 days and $239 billion if market access had been lost for 10 days.

* * *

Summarizing the story so far: after years of never even once contemplating how much cash the US Treasury has on eht books, suddenly, 5 years into the “recovery” the Treasury is suddenly very concerned about the level of statutory cash. Why? Fears over loss of “market access” such as those during a “glitchy” 4 week bill auction in December 2003 (implication: malicious hackers) or September 11 (implication: domestic terrorism accident).

And what is probably most disturbing is the TBAC’s ultimate answer to the TSY’s question whether it should hold more cash: 

The Committee concluded that it would be cost effective and prudent for Treasury to hold a higher cash balance.

Just in case, surely. Still, one wonders, do they know something we don’t, and just what was unreported during the “framework discussion” phase, and just how long until the Treasury tests out its increased cash retention strategy, and most importantly: just what event will lead to the Treasury “losing market access”?

* * *

Full TBAC presentation (pdf)




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Why Is The US Treasury Suddenly Concerned About “Loss Of Market Access”

Earlier we revealed that one of the key topics of discussion during yesterday’s quarterly meeting of the TBAC committee with government workers (including Under Secretary for Domestic Finance Mary Miller, Assistant Secretary for Financial Markets Matthew S. Rutherford, Deputy Assistant Secretary for Federal Finance James G. Clark, and Director of the Office of Debt Management Fred Pietrangeli, and two NY Fed staffers, Nathaniel Wuerffel and Lorie Logan) was whether or not markets had become far too complacent, there was another, even more important topic of discussion than simply the beaten dead horse which is the fate of manipulated stock markets.  The topic: the US Treasury suddenly losing access to capital markets.

This is how the Treasury framed the discussion:

Pursuant to the Committee’s request at the April meeting that Treasury present a cash balance management framework that mitigates certain risks, DAS Clark began his presentation by reviewing Treasury’s current cash balance objectives.  He explained that Treasury’s main sources of cash are susceptible to risk, noting that Treasury has historically focused on risks associated with errors in fiscal forecasting.  Clark stated that several events had made it clear that market access and settlement risks could also potentially impair Treasury’s ability to fund government expenditures for several business days.

 

A detailed discussion ensued amongst Committee members around the benefits and potential concerns related to holding a higher cash balance in order to mitigate the consequence of losing market access.  The Committee concluded that it would be cost effective and prudent for Treasury to hold a higher cash balance.  They suggested that Treasury should continue to analyze the details of maintaining a higher cash balance and present its findings at an upcoming TBAC meeting.

In other words back in April, the US Treasury for reasons unknown, tasked the TBAC to consider levels of cash funding needs for the US treasury as a result of “certain risks.”

Specifically as a result of “several events” among them the December 2, 2013 delay of a 4 week bill auction due to IT issues, Super Storm Sandy in October 2012, and September 11, 2001, the Treasury has suddenly – five years into the recovery – gotten concerned that its ability to fund government expenditures for “several business days” could be “impaired.”

As examples of market disruption, the Treasury mentions two: Hurricane Sandy: 1.5 days and September 11th: 2-3 days.

The TBAC then responds that the “Cash required to cover the worst 1-5 days since FY2009 is relatively constant at approximately $331 billion.”

 

Here is what the TBAC finds: “Historically, Treasury has only had enough cash to withstand a loss of market access for approximately 2 days.“

Further:

  • Treasury would have been protected against losing market access for 1 day roughly 80 percent of the time.
  • Treasury would have been protected against losing market access for 5 days less than 10 percent of the time.

But it is the TBAC’s punchline that is most important:

If Treasury lost market access for a short period of time, the U.S. government would face a substantial cash shortfall.

  • Since the beginning of the financial crisis, on average, Treasury would have faced an $28 billion cash shortfall if market access had been lost for 3 days.
  • This shortfall increases to $89 billion if market access had been lost for 5 days and $239 billion if market access had been lost for 10 days.

* * *

Summarizing the story so far: after years of never even once contemplating how much cash the US Treasury has on eht books, suddenly, 5 years into the “recovery” the Treasury is suddenly very concerned about the level of statutory cash. Why? Fears over loss of “market access” such as those during a “glitchy” 4 week bill auction in December 2003 (implication: malicious hackers) or September 11 (implication: domestic terrorism accident).

And what is probably most disturbing is the TBAC’s ultimate answer to the TSY’s question whether it should hold more cash: 

The Committee concluded that it would be cost effective and prudent for Treasury to hold a higher cash balance.

Just in case, surely. Still, one wonders, do they know something we don’t, and just what was unreported during the “framework discussion” phase, and just how long until the Treasury tests out its increased cash retention strategy, and most importantly: just what event will lead to the Treasury “losing market access”?

* * *

Full TBAC presentation (pdf)




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Monica Jones Takes 'Manifesting Prostitution' Challenge to Arizona Supreme Court

Monica Jones is asking the Supreme Court of Arizona to reverse
her April conviction for “manifesting prostitution” and deem the
ordinance she was charged under unconstitutional. Pursuant to
Phoenix city code, accepting a ride from a stranger, waving at
passersby, or asking someone whether they’re a cop could constitute
“manifesting an intent to commit or solicit an act of
prostitution,” a misdemeanor crime. 

Jones
was arrested in May 2013, after accepting a ride from an
undercover police officer working on Phoenix’s “prostitution
diversion” detail. Jones, a student at the University of
Arizona, was involved in local LGBT and sex work activism. At a
rally the night before, she had been warning women about the
Phoenix Police Department’s sting operation that weekend. 

With the help of the American Civil Liberties Union (ACLU) of
Arizona Jones
challenged the charges, arguing that Phoneix’s manifesting
prostitution statute is “unconstitutionally vague and overbroad”
and infringed on freedom of speech. The Phoenix Municipal
Court disagreed,
sentencing Jones to 30 days jail time and a $500 fine. Today, Jones
filed an
appeal with the state Supreme Court. 


From The Arizona Republic: 

Jones’ attorney, Jean-Jacques “J” Cabou of Perkins Coie LLP,
said the ordinance undermined various portions of the First
Amendment. “This law abridges a lot of pure speech — speech like
speaking, speech like asking questions, speech like what you wear,”
Cabou said. “The law protects all of those things, and, in this
case, it protected none of them.”

In the April trial, the municipal judge’s decision hinged on the
accounts of two witnesses: Jones and the undercover Phoenix Police
officer. Their stories diverged on several factors, including who
initiated the ride and whether Jones instigated sexual contact.

Jones’ attorneys say the ordinance also relies too much on the
assumptions of the individual officer. In Jones case, attorneys
noted, the undercover officer described her outfit as a “black,
tight-fitting dress” and repeatedly referred to Jones as a man in
his written report.

Jones is transgender. She was heading to meet friends at a bar
and dressed in a manner this police officer deemed provocative. And
that’s what’s insidious about this law: It allows for cops’
subjective judgments about intent to stand in for any actual
criminal activity. To manifest prostitution, you only need look to
a cop like a prostitute.

“The officer who arrested me profiled me as a sex worker because
I am transgender, I am a woman of color and I live in an area that
is perceived to be low income,” Jones
said in a statement. At an ACLU gathering Monday night,
she was joined by trans actress Laverne
Cox. The Orange Is The New
Black star said Jones’
challenging the law was “a huge inspiration” to her and trans
people across the county.

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Monica Jones Takes ‘Manifesting Prostitution’ Challenge to Arizona Supreme Court

Monica Jones is asking the Supreme Court of Arizona to reverse
her April conviction for “manifesting prostitution” and deem the
ordinance she was charged under unconstitutional. Pursuant to
Phoenix city code, accepting a ride from a stranger, waving at
passersby, or asking someone whether they’re a cop could constitute
“manifesting an intent to commit or solicit an act of
prostitution,” a misdemeanor crime. 

Jones
was arrested in May 2013, after accepting a ride from an
undercover police officer working on Phoenix’s “prostitution
diversion” detail. Jones, a student at the University of
Arizona, was involved in local LGBT and sex work activism. At a
rally the night before, she had been warning women about the
Phoenix Police Department’s sting operation that weekend. 

With the help of the American Civil Liberties Union (ACLU) of
Arizona Jones
challenged the charges, arguing that Phoneix’s manifesting
prostitution statute is “unconstitutionally vague and overbroad”
and infringed on freedom of speech. The Phoenix Municipal
Court disagreed,
sentencing Jones to 30 days jail time and a $500 fine. Today, Jones
filed an
appeal with the state Supreme Court. 


From The Arizona Republic: 

Jones’ attorney, Jean-Jacques “J” Cabou of Perkins Coie LLP,
said the ordinance undermined various portions of the First
Amendment. “This law abridges a lot of pure speech — speech like
speaking, speech like asking questions, speech like what you wear,”
Cabou said. “The law protects all of those things, and, in this
case, it protected none of them.”

In the April trial, the municipal judge’s decision hinged on the
accounts of two witnesses: Jones and the undercover Phoenix Police
officer. Their stories diverged on several factors, including who
initiated the ride and whether Jones instigated sexual contact.

Jones’ attorneys say the ordinance also relies too much on the
assumptions of the individual officer. In Jones case, attorneys
noted, the undercover officer described her outfit as a “black,
tight-fitting dress” and repeatedly referred to Jones as a man in
his written report.

Jones is transgender. She was heading to meet friends at a bar
and dressed in a manner this police officer deemed provocative. And
that’s what’s insidious about this law: It allows for cops’
subjective judgments about intent to stand in for any actual
criminal activity. To manifest prostitution, you only need look to
a cop like a prostitute.

“The officer who arrested me profiled me as a sex worker because
I am transgender, I am a woman of color and I live in an area that
is perceived to be low income,” Jones
said in a statement. At an ACLU gathering Monday night,
she was joined by trans actress Laverne
Cox. The Orange Is The New
Black star said Jones’
challenging the law was “a huge inspiration” to her and trans
people across the county.

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Reasonable! Missouri Voters Overhwelmingly Pass Amendment Extending 4A Protections to Electronic Devices, Data

DragnetAs noted at
Reason 24/7 this morning, Justin Amash’s hard-fought victory in
Michigan’s third district wasn’t the only bit of good news for
critics of the surveillance state. In Missouri an amendment to the
state constitution, supported by State Sen. Rob Schaaf, (R-St.
Joseph), that extends protection from unreasonable search and
seizure to electronic communications and data passed
overwhelmingly. In other words, cops, and other interested
government busybodies, will need a warrant for that kind of
information. The Kansas City Star came out against
the amendment, and another reaffirming the right to bear arms,
arguing it was “vaguely worded” and that the right place to secure
the right to privacy was in litigation.

Though the amendment was proposed before the Supreme Court’s
ruling, the June
Riley vs. California decision extended nationwide the
same kind of protection from unreasonable search and seizure to
people’s cellphones. Over the last few years, states such as

Texas,
California,
Maine, and
Tennessee have moved toward extending Fourth Amendment
protections to the digital realm.

A guide
(PDF) for school officials from the Missouri Attorney General’s
office on conducting reasonable searches and serious doesn’t
mention cellphones or electronic devices once, though is heavy on
when a search might be “reasonable.” The efforts in Missouri, and
around the country, certainly push back on the idea that reasonable
people shouldn’t reasonably expect privacy just because they use
modern technology.

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What Are the Options For Those Who Can't/Won't Get A Corporate/Government Job?

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

To understand alternatives to conventional corporate/government jobs, we have to understand "the economy we have, not the one we wish we had."
 

The average jobseeker is hoping to nail down a corporate or government position, for the usual reasons: security, pay and benefits. This is understandable, and it works for those who do manage to nail down a corporate/government job.
 
But what about everyone else? What do they do for a career? And what about those who take the Corporate America/state job and realize it isn't a good match for who they are and where they want to go?
 
The conventional options are on the margins of the economy: a low-wage part-time job or risky self-employment. No wonder most people want a secure Corporate America/state gig.
 
But there aren't enough secure, high-paying corporate/government jobs for everyone who wants one. The conventional (and carefully unstated) view is: tough luck, welcome to the low-wage serfdom basement of the economy. Take a part-time McJob or three if you can get them and spend your life scraping by.
 
I don't see low-wage serfdom as the only alternative to a shiny Corporate America/government bureaucracy job. To understand the alternatives, we have to understand the economy we have, not the one we wish we had or the one we might have in the future.
 
I often receive emails asking for job/career advice, and this is to be expected, given my latest book is titled Get a Job, Build a Real Career and Defy a Bewildering Economy.
 
My first response is to list the four conditions that make finding paying work easier:
 
1. Living in a place with a diverse range of opportunities for work.
2. Developing a network of people who know I’m looking for work and who trust me to do a good job.
3. Having more than one skill so I can take a variety of jobs.
4. Knowing what kind of work I like doing.
 
Beyond these common-sense points, job-seekers and those changing careers need to understand the disruptive forces transforming the economy.
 

The Disruptive Forces Transforming the Economy

 
There are three fundamental forces disrupting the conventional order, and everyone with their eyes open sees them at work every day:
 
1.  Essential resources are becoming more expensive.
 
2.  The system of expanding credit/debt to fund more consumption (i.e. “growth”) has reached marginal returns and is failing.
 
3.  Networked software, automation and robotics are reducing the need for human labor on a global scale.
 
As a result of these three structural forces, economic instability is not going to go away any time soon.  Technology leapfrogs the obsolete and inefficient; no wonder conventional sectors and the market for traditional 9-to-5 jobs are both stagnating.
 
The realization that ever-expanding debt and consumption are unsustainable has given rise to a new understanding of the economy called Degrowth (French: décroissance, Spanish: decrecimiento, Italian: decrescita).
 
From the perspective of sustainable prosperity, growth based on ever-expanding debt-based consumption is the road to ruin.
 
This shift from debt-based consumption to a more productive sustainability is bringing profound changes to the nature of work itself and social arrangements in the workplace.
Though we can’t foresee all the ramifications of networked software, automation and robotics, we can predict one aspect of this systemic disruption: technology will disrupt the most expensive, least efficient sectors of the economy because that’s where the greatest reductions in cost can be reaped.
 
In our economy, these are healthcare, education, government and national defense, all traditionally viewed as stable sectors with guaranteed job security.   That is changing, as the soaring costs of these sectors now exceed the economy’s ability to fund them.  If an economy expands by 2% each year and healthcare costs rise by 5% each year, eventually healthcare runs out of oxygen—there isn’t enough income generated by the economy to fund its continued expansion.
 
Few “experts”—academics, pundits and advisors—have accepted the reality of these forces or thought through the interacting consequences. As a result, we’re on our own in setting a course and navigating the inevitable storms ahead as the old system lurches from crisis to crisis, weakening further as every politically expedient reform fails to address these structural realities.
 

Outmoded Career Advice Is the Norm

 
Though the transformative power of these three forces is self-evident, remarkably, conventional career counseling is still stuck in the past, offering three basic bits of advice:
 
1.  Choose a career that aligns with your core talents and interests.
2.  Get as many credentials as you can — degrees, certifications, etc. — because the gatekeepers who do the hiring require them.
3.  Since the goal is secure employment, try to get a job in the government or a big corporation.
 
In my view, the conventional advice has it all backward. What worked in the past is no longer working because the economy and the nature of work are both being disrupted by forces that cannot be controlled by those threatened by these fundamental changes. 
In the conventional view, a college degree prepares one to enter the workforce. This is no longer true, as higher education has largely failed to keep pace with technology and a fast-changing economy.
 
As for adding more credentials to keep ahead of the pack—degree inflation dooms this strategy for all but the few who manage to secure multiple degrees from elite universities. And even this is no guarantee of lifetime security for everyone, as the number of open slots in gatekeeper-dominated institutions is much smaller than the rapidly expanding pool of over-credentialed applicants.
 
What matters more than credentials is the ability to keep learning new skills over one’s entire productive life.
 
And while it’s certainly solid advice to align one’s work with one’s talents and interests, even this advice misses the key dynamics of the emerging economy—which I define as  the parts of the economy that are thriving on innovation rather than depending on cheap credit and asset bubbles for the
ir survival.
 
The thriving parts of the economy rely less on gatekeepers and credentials and more on skills, flexibility, professionalism, mastery and networks of collaboration.
 
In the emerging economy, security arises not from institutional promises but from a diversity of skills and income streams and a flourishing network of other trustworthy, productive people.
 
As a result, the goal for jobseekers isn’t just to identify one’s talents and interests but to acquire a diverse suite of flexible skills and a network that enables you to put these skills to good use.
 
In this view, work isn’t what you do between 9 and 5: it’s a lifestyle informed by a flexible, open perspective and guided by entrepreneurial values.
 
In terms of values, conventional career advice is based on the idea that happiness and fulfillment require institutional security and ever more consumption. But the more we learn about happiness and fulfillment, the more apparent it becomes that family, community, meaningful work and networks of trustworthy collaborators and friends are the sources of happiness and fulfillment, not the accumulation of institutional promises and more stuff, which turns out to have little impact on happiness or fulfillment.
 

The Dynamics of Economic Transformation

 
Capitalism and technology are both disruptive by their very nature.  That mature industries shrink or disappear is not the fault of one policy or another; that process of creative destruction (a term coined by economist Joseph Schumpeter) is the heart of capitalism and technology.
 
Many have attempted to keep technology safely locked up so it can’t creatively destroy their regime or industry. But technology is a genie that cannot be kept in the bottle. To quote Bob Dylan:  those not busy being born are busy dying.  Every nation or industry that tries to protect itself from technological transformation either stagnates or fails.
 
One aspect of capitalism that disturbs many people is the mobile nature of capital—that capital will flow to the highest return, regardless of national borders or religious, national and ideological loyalties.
 
Though many attribute this mobility to base greed, capital that doesn’t seek to expand will fall victim to creative destruction: the only way innovation and productive investment can occur is if less productive investments and quasi-monopolies are dismantled.
 
This is true not just of financial capital (cash), but of human and social capital—what author Peter Drucker called the new means of production in the knowledge-based economy.
 
This will have implications for every worker seeking to escape the corporate rat-race or build a career.
 
One feature of capitalism that is rarely noted is the premium placed on cooperation. The Darwinian aspects of competition are widely accepted (and rued) as capitalism’s dominant force, but cooperation is just as intrinsic to capitalism as competition. Subcontractors must cooperate to assemble a product, suppliers must cooperate to deliver the various components, distributors must cooperate to get the products to retail outlets, employees and managers must cooperate to reach the goals of the organization, and local governments and communities must cooperate with enterprises to sustain the local economy.
 
Darwin’s understanding of natural selection is often misapplied. In its basic form, natural selection simply means that the world is constantly changing, and organisms must adapt or they will expire. This dynamic is scale-invariant, meaning that it’s true for individuals, enterprises, governments, cultures and economies. Darwin wrote: "It is not the strongest of the species that survives, or the most intelligent, but the ones most adaptable to change."
 
These new ideas, techniques and processes trigger changes in society and the economy that are difficult to predict. The key survival trait is not so much the ability to guess the future correctly but to remain flexible and adaptive.
 
Ideas, techniques and processes which are better and more productive than previous versions will spread quickly; those who refuse to adapt them will be overtaken by those who do.
 
This creates a dilemma: we want more prosperity and wider opportunities for self-cultivation (personal fulfillment), yet we don’t want our security to be disrupted. 

But we cannot have it both ways. Those who attempt to preserve the current order while reaping the gains of free markets find their security dissolving before their eyes as unintended consequences of technological and social innovations disrupt their sources of wealth and mechanisms of control.

 
The great irony of free-market capitalism is that the only way to establish an enduring security is to embrace innovation and adaptation, the very processes that generate short-term insecurity. Attempting to guarantee security leads to risk being distributed within the system. When the accumulated risk manifests, the system collapses.
 

Why This Matters

Why do these characteristics of free-market capitalism matter to jobseekers?
 
Opportunity is not randomly distributed; it results from what I call the infrastructure of opportunity. If there is no mobility of labor and capital, no transparent markets for labor and capital, no creative destruction of corrupt, obsolete, inefficient systems, weak rule of law, weak property rights, no self-organizing (i.e. transparent, decentralized) access to credit, limited means of cooperation, little room for innovation and no understanding of the essential role of risk in adaptation, opportunities for successful adaptation (what we might call prosperity) are intrinsically scarce. Virtually all bets made in this environment will be lost because there is no fertile ground—it’s a desert for opportunity.
 
In Part 2: How The Nature Of Work Is Changing, we explore the changing nature of work and what skills and values tilt the odds in our favor. (Free executive summary;Enrollment in Peak Prosperity is required for full access)

 




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What Are the Options For Those Who Can’t/Won’t Get A Corporate/Government Job?

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

To understand alternatives to conventional corporate/government jobs, we have to understand "the economy we have, not the one we wish we had."
 

The average jobseeker is hoping to nail down a corporate or government position, for the usual reasons: security, pay and benefits. This is understandable, and it works for those who do manage to nail down a corporate/government job.
 
But what about everyone else? What do they do for a career? And what about those who take the Corporate America/state job and realize it isn't a good match for who they are and where they want to go?
 
The conventional options are on the margins of the economy: a low-wage part-time job or risky self-employment. No wonder most people want a secure Corporate America/state gig.
 
But there aren't enough secure, high-paying corporate/government jobs for everyone who wants one. The conventional (and carefully unstated) view is: tough luck, welcome to the low-wage serfdom basement of the economy. Take a part-time McJob or three if you can get them and spend your life scraping by.
 
I don't see low-wage serfdom as the only alternative to a shiny Corporate America/government bureaucracy job. To understand the alternatives, we have to understand the economy we have, not the one we wish we had or the one we might have in the future.
 
I often receive emails asking for job/career advice, and this is to be expected, given my latest book is titled Get a Job, Build a Real Career and Defy a Bewildering Economy.
 
My first response is to list the four conditions that make finding paying work easier:
 
1. Living in a place with a diverse range of opportunities for work.
2. Developing a network of people who know I’m looking for work and who trust me to do a good job.
3. Having more than one skill so I can take a variety of jobs.
4. Knowing what kind of work I like doing.
 
Beyond these common-sense points, job-seekers and those changing careers need to understand the disruptive forces transforming the economy.
 

The Disruptive Forces Transforming the Economy

 
There are three fundamental forces disrupting the conventional order, and everyone with their eyes open sees them at work every day:
 
1.  Essential resources are becoming more expensive.
 
2.  The system of expanding credit/debt to fund more consumption (i.e. “growth”) has reached marginal returns and is failing.
 
3.  Networked software, automation and robotics are reducing the need for human labor on a global scale.
 
As a result of these three structural forces, economic instability is not going to go away any time soon.  Technology leapfrogs the obsolete and inefficient; no wonder conventional sectors and the market for traditional 9-to-5 jobs are both stagnating.
 
The realization that ever-expanding debt and consumption are unsustainable has given rise to a new understanding of the economy called Degrowth (French: décroissance, Spanish: decrecimiento, Italian: decrescita).
 
From the perspective of sustainable prosperity, growth based on ever-expanding debt-based consumption is the road to ruin.
 
This shift from debt-based consumption to a more productive sustainability is bringing profound changes to the nature of work itself and social arrangements in the workplace.
Though we can’t foresee all the ramifications of networked software, automation and robotics, we can predict one aspect of this systemic disruption: technology will disrupt the most expensive, least efficient sectors of the economy because that’s where the greatest reductions in cost can be reaped.
 
In our economy, these are healthcare, education, government and national defense, all traditionally viewed as stable sectors with guaranteed job security.   That is changing, as the soaring costs of these sectors now exceed the economy’s ability to fund them.  If an economy expands by 2% each year and healthcare costs rise by 5% each year, eventually healthcare runs out of oxygen—there isn’t enough income generated by the economy to fund its continued expansion.
 
Few “experts”—academics, pundits and advisors—have accepted the reality of these forces or thought through the interacting consequences. As a result, we’re on our own in setting a course and navigating the inevitable storms ahead as the old system lurches from crisis to crisis, weakening further as every politically expedient reform fails to address these structural realities.
 

Outmoded Career Advice Is the Norm

 
Though the transformative power of these three forces is self-evident, remarkably, conventional career counseling is still stuck in the past, offering three basic bits of advice:
 
1.  Choose a career that aligns with your core talents and interests.
2.  Get as many credentials as you can — degrees, certifications, etc. — because the gatekeepers who do the hiring require them.
3.  Since the goal is secure employment, try to get a job in the government or a big corporation.
 
In my view, the conventional advice has it all backward. What worked in the past is no longer working because the economy and the nature of work are both being disrupted by forces that cannot be controlled by those threatened by these fundamental changes. 
In the conventional view, a college degree prepares one to enter the workforce. This is no longer true, as higher education has largely failed to keep pace with technology and a fast-changing economy.
 
As for adding more credentials to keep ahead of the pack—degree inflation dooms this strategy for all but the few who manage to secure multiple degrees from elite universities. And even this is no guarantee of lifetime security for everyone, as the number of open slots in gatekeeper-dominated institutions is much smaller than the rapidly expanding pool of over-credentialed applicants.
 
What matters more than credentials is the ability to keep learning new skills over one’s entire productive life.
 
And while it’s certainly solid advice to align one’s work with one’s talents and interests, even this advice misses the key dynamics of the emerging economy—which I define as  the parts of the economy that are thriving on innovation rather than depending on cheap credit and asset bubbles for their survival.
 
The thriving parts of the economy rely less on gatekeepers and credentials and more on skills, flexibility, professionalism, mastery and networks of collaboration.
 
In the emerging economy, security arises not from institutional promises but from a diversity of skills and income streams and a flourishing network of other trustworthy, productive people.
 
As a result, the goal for jobseekers isn’t just to identify one’s talents and interests but to acquire a diverse suite of flexible skills and a network that enables you to put these skills to good use.
 
In this view, work isn’t what you do between 9 and 5: it’s a lifestyle informed by a flexible, open perspective and guided by entrepreneurial values.
 
In terms of values, conventional career advice is based on the idea that happiness and fulfillment require institutional security and ever more consumption. But the more we learn about happiness and fulfillment, the more apparent it becomes that family, community, meaningful work and networks of trustworthy collaborators and friends are the sources of happiness and fulfillment, not the accumulation of institutional promises and more stuff, which turns out to have little impact on happiness or fulfillment.
 

The Dynamics of Economic Transformation

 
Capitalism and technology are both disruptive by their very nature.  That mature industries shrink or disappear is not the fault of one policy or another; that process of creative destruction (a term coined by economist Joseph Schumpeter) is the heart of capitalism and technology.
 
Many have attempted to keep technology safely locked up so it can’t creatively destroy their regime or industry. But technology is a genie that cannot be kept in the bottle. To quote Bob Dylan:  those not busy being born are busy dying.  Every nation or industry that tries to protect itself from technological transformation either stagnates or fails.
 
One aspect of capitalism that disturbs many people is the mobile nature of capital—that capital will flow to the highest return, regardless of national borders or religious, national and ideological loyalties.
 
Though many attribute this mobility to base greed, capital that doesn’t seek to expand will fall victim to creative destruction: the only way innovation and productive investment can occur is if less productive investments and quasi-monopolies are dismantled.
 
This is true not just of financial capital (cash), but of human and social capital—what author Peter Drucker called the new means of production in the knowledge-based economy.
 
This will have implications for every worker seeking to escape the corporate rat-race or build a career.
 
One feature of capitalism that is rarely noted is the premium placed on cooperation. The Darwinian aspects of competition are widely accepted (and rued) as capitalism’s dominant force, but cooperation is just as intrinsic to capitalism as competition. Subcontractors must cooperate to assemble a product, suppliers must cooperate to deliver the various components, distributors must cooperate to get the products to retail outlets, employees and managers must cooperate to reach the goals of the organization, and local governments and communities must cooperate with enterprises to sustain the local economy.
 
Darwin’s understanding of natural selection is often misapplied. In its basic form, natural selection simply means that the world is constantly changing, and organisms must adapt or they will expire. This dynamic is scale-invariant, meaning that it’s true for individuals, enterprises, governments, cultures and economies. Darwin wrote: "It is not the strongest of the species that survives, or the most intelligent, but the ones most adaptable to change."
 
These new ideas, techniques and processes trigger changes in society and the economy that are difficult to predict. The key survival trait is not so much the ability to guess the future correctly but to remain flexible and adaptive.
 
Ideas, techniques and processes which are better and more productive than previous versions will spread quickly; those who refuse to adapt them will be overtaken by those who do.
 
This creates a dilemma: we want more prosperity and wider opportunities for self-cultivation (personal fulfillment), yet we don’t want our security to be disrupted. 

But we cannot have it both ways. Those who attempt to preserve the current order while reaping the gains of free markets find their security dissolving before their eyes as unintended consequences of technological and social innovations disrupt their sources of wealth and mechanisms of control.

 
The great irony of free-market capitalism is that the only way to establish an enduring security is to embrace innovation and adaptation, the very processes that generate short-term insecurity. Attempting to guarantee security leads to risk being distributed within the system. When the accumulated risk manifests, the system collapses.
 

Why This Matters

Why do these characteristics of free-market capitalism matter to jobseekers?
 
Opportunity is not randomly distributed; it results from what I call the infrastructure of opportunity. If there is no mobility of labor and capital, no transparent markets for labor and capital, no creative destruction of corrupt, obsolete, inefficient systems, weak rule of law, weak property rights, no self-organizing (i.e. transparent, decentralized) access to credit, limited means of cooperation, little room for innovation and no understanding of the essential role of risk in adaptation, opportunities for successful adaptation (what we might call prosperity) are intrinsically scarce. Virtually all bets made in this environment will be lost because there is no fertile ground—it’s a desert for opportunity.
 
In Part 2: How The Nature Of Work Is Changing, we explore the changing nature of work and what skills and values tilt the odds in our favor. (Free executive summary;Enrollment in Peak Prosperity is required for full access)

 




via Zero Hedge http://ift.tt/1lAVsc2 Tyler Durden