This video might help in understanding my thinking process -
Let me start with two questions:
1. Let us take the recent foreclosure crisis - let us say that there were three million dollar houses close to each other, but two of the neighbors lost their jobs and are getting ready to foreclose the house :
a. What will happen to the value of the house?
b. What will happen to the owner who still has the job and money, but have to see two foreclosed houses on a daily basis
This issue appears to be spreading from individuals to community to states to countries to world
2. How is wealth gap relevant?
Example: Let us say one group of industry pays more compensation on a consistent basis, and then there is a market downturn - This group not only has a large chunk of money, but also might have timed selling their house at the right time. Then, set of people from this group can move to a neighboring state with house values half of that of the first state and can afford to pay more. What happens to the real estate value in this state now? How about the current residents of this state?
- Real estate value is going to increase
- Current residents who rent may not have seen that kind of compensation, and may not be able to buy houses or have to over-reach beyond their abilities
- Long-time residents of that state may see temporary increase in value, but if the new buyers move out again then the prices may drop again - this trend leads to increase/decrease in prices, which can impact families
Another example that I would like to share: there was so much troll in discussion forums for peer assessing a MOOC course, which was not even part of a course curriculum in any university, and the tolerance level between students appeared to be a major concern. If that were the mindset of individuals, any issue can spread much faster than we think with so much inefficiency in different sections of the global network. With currency crisis being brought into discussion along with price wars and with certain questions about how economy has turned out for the masses, it is important to take actions with care and pragmatism. It is what I meant.
Here has been the general trends over the last forty years -
1. Labor force increasing linearly, and the projections are that it will increase further
2. Real wage increase stagnating - It need not be related to policies but a combination of factors namely,
- technological innovation
- educational attainment variation within the country and throughout the world
- health, life expectancy and cost,
- longevity of jobs all playing together at the same time
3. Widening wealth gap
4. Certain regions, industries outperforming consistently over others and also offers much higher compensation - which directs the talent pool to only those areas
5. Though population density in cities are increasing, and appears to be the trend, but with expected increase in population, if not anything, the city limits need to be expanded, and hence local transportation networks should be improved.
6. Policies to limit asset bubbles are important, and is tied to wealth gap
Coming to energy sources, again, it connects to population, demographic profile, alternative opportunities.
For example, let us take Coal - Coal industry has a long history, and the workers over there tend to be long timers. If the coal plants get phased out all of a sudden or without advance notice, they will have a much tougher time to recover with transferable education/skill set being a concern for this group. When they see certain groups getting bailed out repeatedly, they feel that they are not getting a fair deal. This mindset is also spreading across various groups. While phasing out process happens, key job areas need to be identified for this group where they can excel and offer relevant training for them to gradually make that switch, and also the information should be communicated clearly well in advance on the reasons for the decision.
(Replacement Industries to consider: Food & Beverage, Bottling, Packaging, Construction)
We also need to be careful while switching technologies. Prof. Howarth et al. at Cornell university have repeatedly shown that methane leak coming from natural gas and shale gas could result in more ghg emissions. Irrespective of whether the wider group of researchers accept this work, it is important for the research community and industries to make a gradual change from existing technologies to understand the longer term impact coming out of switching to natural gas. Moreover, we have a better understanding of the coal industry, and with large supply of coal, we need to keep every energy source as an option to meet the growing demands of the middle class across the globe. Further, if were to completely phase out of any technology, we will lose out on know how. What if we come up with a solution to address global warming, but don't have enough energy source to meet the energy demand.
Hope this clarification section helps.