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Can We Think Our Way Past Robots?

Can We Think Our Way Past Robots?

Never mind the wall that President Trump said Mexico must pay for but then Congress must pay for; either that or much of the working class loses its health coverage. Oh, he’s dropped that? Well, it made for a lively 24 hours.

Bubbling beneath today’s comic-book politics are threats to American workers that have nothing to do with people or things coming over the border. Robots and artificial intelligence are nipping at the heels of not only blue-collar workers but also white-collar professionals who assumed that a degree would keep them several steps ahead of the machines.

Trump’s treasury secretary, Steven Mnuchin, recently opined that this peril for employment is, “like, so far away” that it’s not even on his “radar screen.” Guess he hasn’t read about MillerCoors’ plan to offer a beer service called Miller Lite On-Demand.

It works like this: A beer drinker watching the game at home comes to the startling realization that he’s out of Miller Lite. Without having to take his rear end off the couch, he uses a voice-activated command (or pushes a programmed button on the phone) to order more beer. A truck arrives with reinforcements within an hour.

There’s no going to a store that has to employ salespeople. Technology for self-driving trucks is well on its way, so truck drivers will soon not be needed.

Here’s the glitch. With jobs like these gone, how will the beer drinker make the money needed to buy the beverage? Such questions are gathering dust in an administration intent on distracting ordinary folk with entertainment as it marshals its deep thinking for such matters as how to slash taxes for real estate empires.

Actually, The National Academies of Sciences, Engineering, and Medicine recently published a study on the advances in automation and artificial intelligence and posed some not insignificant questions related to them. For instance:

Who gets to choose the technological future? How does this change us as a society? And what will it mean to be human?

The president would no doubt have read all 184 pages had he not been busy that day signing a law to cut funding for Planned Parenthood and flying off to Palm Beach. But as his supporters say, give him a chance. Give him a chance.

Artificial intelligence goes way beyond the elementary programming of robots to tighten screws. Simplistically put, it teaches machines to think, to learn the way toddlers do. With traditional robots, at least you needed humans to do the programming. Technology is now being developed that would let the machines program themselves.

Artificial intelligence can already do some things that lawyers or their human assistants had to do. For example, it uses “natural language processing” to go through documents and find passages that may be relevant to a case.

This technology has let BlackRock, the giant investment company, do away with some of its human stock pickers. Marry big data to algorithms and computer models and you have fund managers who never take vacations, loyal machines who won’t skip off to a competitor.

Six years ago, IBM’s Watson rampaged through “Jeopardy!” with the smart responses. Watson now helps doctors diagnose cancer and H&R Block do tax returns.

Well-planned, this technology could deliver a glorious future of leisure and creativity to the masses. Or it could relegate them to misery under the thumbs of a few masterminds pulling the levers. Sadly, our current leadership seems determined to avoid thought unrelated to today’s appetites.

As Groucho Marx put it: “Why should I care about posterity? What’s posterity ever done for me?”

IMAGE: Visitors watch different sized industrial robots by KUKA at the Hanover Messe in Hanover, Germany, April 8, 2013.  REUTERS/Fabrizio Bensch/File Photo

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Breaking Up With Your Adviser For A Robot Is Hard To Do

Breaking Up With Your Adviser For A Robot Is Hard To Do

By Chris Taylor

NEW YORK (Reuters) – What do you tell your financial adviser when you are leaving for an algorithm?

Joe O’Connor, a 52-year-old Connecticut salesman, had to have this conversation recently. It was delicate business explaining why he was ditching the planner he had been with for over a decade, to put his money in the hands of what is known as a robo-adviser — a web-based service that automates the allocation of your investment portfolio.

There were the usual responses: “But why?” “Was it something I did?” “What can I do to make it right?”

And of course, there is the timeless relationship classic line: “It’s not you, it’s me.”

“It wasn’t fun,” O’Connor said.

That kind of awkward conversation is taking place more frequently these days, thanks to the rise of robo-advisers, which have about $20.1 billion in worldwide assets under management for new entrants, according to Switzerland-based research firm MyPrivateBanking.

Of course with total U.S. investable assets at $33.5 trillion, that is barely loose change under the couch cushions, industry analyst Michael Kitces points out. But projections are for heady growth with new robo-advisers expected to grow to $42.6 billion in 2016 and $86.7 billion in 2017.

WHY LEAVE?

Looking strictly at fees, robo-advisers offer certain advantages. Prominent site Betterment (http://betterment.com), for instance, charges .25 percent on accounts between $10,000-$100,000, and .15 percent above that. Competitor Wealthfront (http://wealthfront.com) has a similar cost structure, charging .25 percent for accounts worth $10,000 or more.

Personal Capital (http://personalcapital.com), which Joe O’Connor uses, offers more of a blended service, combining its automated recommendations with humans (albeit primarily via video chat or email), charging .89 percent on portfolios up to $1 million.

That is in comparison to traditional financial planners, who charge around 1 percent or more of assets annually. (Fee-only planners have their own payment structure, billing per planning session instead of charging a percentage of assets.)

The low-fee logic of robo-advisers may work admirably for young savers starting out. In fact many users are converted Do-It-Yourselfers or Millennials with little investable cash, rather than mid-career professionals who have switched from existing planners, Kitces points out.

WHY STAY?

You may gain something by opting for low-fee robots – but you lose the long-term financial planning aspect.

“I had a client recently leave for a robo. I told them robos are not financial planners,” says Kashif Ahmed, an advisor in Woburn, Mass. “A robo will not call you when markets are going through a rough patch, and you can’t call a robo to discuss your protection needs, or to ensure your estate documents are in order.”

As you age, and financial responsibilities start piling up – raising kids, dealing with insurance questions, running a business, coping with elderly parents, and so on – the advantages of dealing with an actual person become more evident.

“At that point, when money has grown substantially, you may opt out of robo-investing and go find a real person,” says Maggie Baker, a Philadelphia financial therapist and author of the book “Crazy About Money.”

Of course, it is not always fees that cause breakups with financial planners. Far from it. In fact, the number-one reason cited by millionaires for switching advisers is due to them not returning client phone calls, according to a report from research firm Spectrem Group.

In cases like that, a robo-adviser is obviously no upgrade. After all, it is hard to get on the phone with an algorithm.

HAVING ‘THE TALK’

Baker’s advice for ditching your existing planner: Just be honest. It is likely that some negative event has caused you to look elsewhere – subpar returns, maybe, or a general lack of communication – and it could be something you can talk through and resolve.

In fact, thanks to technological advances, you may not have to break up at all. Many firms, like Vanguard (http://vanguard.com) and Charles Schwab Corp , are gravitating towards two-tiered solutions – offering robo-allocations as a starter level, but also providing flesh-and-blood advisory services as a premium option.

With more investors considering robots to steer their finances, though, you cannot escape the regret and bitterness that linger over broken relationships.

“When a client decides to leave, I don’t do anything,” says Richard Colarossi, a planner in Islandia, New York. “If a client leaves to go to robo-adviser, let them go. My experience tells me that a majority of robo clients will shoot themselves in the foot.”

(Editing by Beth Pinsker and Diane Craft)

Photo: Bill Dickinson

Facing The Robot Tsunami

Facing The Robot Tsunami

Robots make the perfect employee. They don’t complain, they don’t get sick, and, as of this writing, they don’t have babies. When robots can do the job in today’s economy, they get the job.

When they can’t, a human must suffice. You still need a human to make the perfect latte, ask security questions at the airport and, for the time being, drive a taxi.

That hasn’t stopped many employers from trying to robotize the people they can’t do without. Many have built business models in which they can, in effect, dust off a human when its labor is required and ignore all its other needs.

This is the famous gig economy. It’s app-based cab services insisting that their drivers are private contractors not entitled the traditional benefits of employment. It’s national chain stores calling employees to duty at a moment’s notice, the heck with any schedule.

Some good people are challenging such employment policies, but there’s a more long-term approach: Give up defending a traditional model of employment that’s dying and come up with a new one. Any realistic solution would require a lot more government intervention and sharing of the national wealth.

I can already hear my conservative friends blowing their tops, but they should hear out the arguments.

A paper out of Brookings Institution — “What happens if robots take the jobs?” — describes the stakes and offers responses. (I’ve taken the liberty of shortening the title.)

“We need a way to provide health care, disability and pension benefits outside of employment,” author Darrell West writes.

How?

For starters, provide a guaranteed income for all. Think of it as an expansion of the earned income tax credit now supporting many low-wage workers and their families.

Isn’t there something socially debilitating about living on government “handouts”? Well, that’s a good question.

An answer, West told me, could be to attach some kind of work requirement to the checks. (Many states already do that with welfare benefits.) The work could be an existing job or government programs that pay people to do something useful.

It’s been done before. The Works Progress Administration was created during the Great Depression to employ armies of out-of-work Americans. The fruits can be seen today in some of the country’s most gorgeous courthouses, zoos and libraries — and great works of art, theater and music.

Some propose paying for volunteer activities having humanitarian value. Examples could include working for the Red Cross, a hospital or a school.

Our Social Security system allocates benefits on the basis of work credits. We could extend credits for certain volunteerism, as is already done in Britain.

Those conservative friends are moaning that the expense would be borne by the most productive Americans. It would “kill” the jobs they create. Well, some of those entrepreneurs did create jobs, but taxes were a lot lower then.

And contrary to ideology, many of our most successful business minds have become unimaginably rich finding ways to get rid of workers, certainly the Americans ones. They’ve cut pay and benefits and are no longer sharing the profits generated by rising productivity.

Small-government conservatives must ask is whether they have a better way to pull America’s working class to safety, out of the path of oncoming tsunami of robotic competition.

They should be mindful that machines don’t have the vote yet. Also, a big crowd of jobless humans hanging out on street corners leads to crime and social unrest. “If you have a large number of unemployed people,” West said, “the United States starts looking like Egypt.”

We Americans have a lot to talk about — things that really matter.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com. COPYRIGHT 2015 CREATORS.COM

Image: Bill Dickinson

Shorter Road Ahead For Driverless Cars

Shorter Road Ahead For Driverless Cars

Friends keep orating that driverless cars are something in the far-ahead future. Apparently, they’re not. That future is near.

Exhibit A is Google’s decision to get into the auto insurance business. Now Google wants to be in everyone’s business. But its foray into insuring drivers is highly plausible for a company deep into developing driverless cars.

In a driverless car, you the “operator” may be texting, drinking, or having sex, but if you’re in an accident, it’s the software’s fault, possibly. Another nice thing about driverless cars is that we’re far less likely to be in accidents. That’s because humans and their frailties are taken out of the equation.

Obviously, we’re still in the driver-driven reality, so the new Google auto insurance site will let car owners compare the rates on conventional coverage offered by various companies. Google gets two things out of this. One, it drains more personal data from users. Two, it takes a cut whenever someone picks a policy on its site.

But come the driverless future, the current model of auto insurance goes out the window. Accidents will be the fault of the software or the car’s mechanics. And software will decide whether it or the metal is to blame.

“After an accident, the onboard computer and sensors will be able to determine whether it was caused by a poorly designed algorithm or a parts failure,” Xerox insurance executive Valerie Raburn explains in The Wall Street Journal.

Fewer accidents and fewer humans mean that car insurance payments will go way down. In fact, they could be made to disappear. Raburn thinks that Google will eventually roll the cost of insurance into the price of its driverless cars. Thus, Google gets a third thing out of entering the auto insurance business: a monopoly on coverage.

Some predict that the whole notion of owning a car will dissolve. After all, one could easily summon a robotic chauffeur via an app, the way we can call a cab or an Uber car. (Surge pricing probably will be a lot harder to pull off.)

Two flies in this ointment. For starters, where will you keep the sunscreen, the extra pair of glasses, and the dog pillow, not to mention the yoga mat and cooler stored in the trunk? This is a semi-public space in which you have no hoarding rights.

The other concern is this: Suppose the occupants of the driverless car before you were slobs. You are picked up by a vehicle littered with empty soda cans and discarded tissues, pizza leavings on the seat. Human drivers can police the passengers in back for anti-social behavior.

One supposes there will be sensors and algorithms to detect littering, in addition to reading your mind. Perhaps an ejection seat mechanism can be attached. Just thinking.

That’s down the road. What’s in the now?

Britain has already permitted trial runs of driverless cars in several cities. The thingies on the road are being called not cars but “pods.” They look like lopped-off Fiat 500s, if you can imagine.

In the United States, driverless cars will be tested in a make-believe town — Mcity — to be built by the University of Michigan and the Michigan Department of Transportation. Thrown in the cars’ path will be mechanized pedestrians and bicycles, traffic circles, junk in the right lane, changing road widths, curb cuts, and an enormous collection of signs and traffic signals. If the cars can handle this, they may someday be able to master Shreveport, Louisiana, and Pawtucket, Rhode Island.

Driverless cars are clearly here, almost. Speed the day.

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Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com. 

Photo: General Physics Laboratory via Flickr