Obama Doesn’t Really Think ATMs Hurt the Economy

Lots of people pounced on President Obama for his comment the other day suggesting ATMs kill jobs.  Here’s the President:

“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”

I have a hard time believing the President really thinks ATMs and airport kiosks are hurting the economy.  Innovation is tricky for politicians because its payoff date is generally further out than the politician’s term of office.  Innovation is destructive, in part:  it kills portions of the economy that, while still productive, are no longer efficient.  Politicians love reaping the fruits of the upswing in the innovation cycle, but hate suffering through the painful readjustment periods.

The time-horizons problem particularly haunts liberals (see generally FLG), but politics is politics.  One of the questions asked of the GOP presidential candidates the other night was what you’d do to bring manufacturing jobs back to the U.S.  If you’re really for innovation and undeterred by long time horizons, the answer is simple:  “Build More Robots.”  But of course no one answered “Build More Robots.” We have a surplus of uneducated labor waiting for unskilled or moderately skilled jobs, not for building and tending to ever more sophisticated machines.

It would have been taking the question too literally, anyway.  The question wasn’t asking for an economic answer but a political one.  Reading between the lines, the question is really “how do we get through this painful readjustment period?”  You’ll be hard pressed to find an economist and a politician who will answer that question the same way.

Tim Kowal

Tim Kowal is a husband, father, and attorney in Orange County, California, Vice President of the Orange County Federalist Society, commissioner on the OC Human Relations Commission, and Treasurer of Huntington Beach Tomorrow. The views expressed on this blog are his own. You can follow this blog via RSS, Facebook, or Twitter. Email is welcome at timkowal at gmail.com.


  1. “I have a hard time believing the President really thinks ATMs and airport kiosks are hurting the economy. ”

    I have a hard time believing that he doesn’t mean exactly what he said.

    Now, you can quibble about whether or not it’s a good thing that pointless gatekeeper-labor positions are being automated. Personally, I do. But it’s not as though these were not positions that employed a person. It’s not as though this automation doesn’t result in many, many people having to do that “retraining or moving” thing that’s supposed to be so easy.

    • I wouldn’t call teller’ing a “pointless gatekeeper-labor position.” Tellers do a lot more than just hand out money. That’s why, even in this day of ATMs, at least some tellers are necessary.

      I do admit, however, that with ATMs they’re less necessary because one of their functions–the “pointless” one of making sure no one takes money out of your account without your position–used to require a lot more tellers.

      • “I wouldn’t call teller’ing a “pointless gatekeeper-labor position.” Tellers do a lot more than just hand out money.”

        Right, they’re present so that Luddites and old people don’t have to deal with Scary Impersonal Machinery.

        The only time I ever go to a teller is when I’m trying to get a coin-counting machine receipt cashed, which A: if they’d bought the right machine it would deposit directly to my account, and B: note carefully how the tellers don’t count the coins, but instead read the number off the receipt and type it into a computer.

        • I was flabbergasted to learn that up until very, very recently (like, the past month or so) my early-adopter, engineer father had never used an ATM, preferring to have his checks cashed by real live people.

          That anyone would do this seemed improbable, much less anyone I knew.

        • Yes, for some reason, there are still people who seem to think that their bank should also be their friend.

          Me, I don’t go to my bank looking for friendship. I want accurate, convenient, and free (as in no account fees) use of my money, with those adjectives listed in descending order of priority. Everything after that is gravy, the fruits of competition between banks for business along those terms.

          In exchange, I will give this gigantic corporation the use of my money when I am not using it myself — and it turns out that for a big gigantic corporation like a bank, there is the potential to make plenty of profit by way of using my money when I don’t use it, so that seems to me to be a fair exchange.

          If the jobs of the bank aren’t going to be reading my checks and counting my nickels in person because I’m not dropping by the branch to shoot the shit with my friend who works there (because I haven’t solicited their friendship) that person’s job ought to be figuring out how to maximize the amount of money available for the bank to use (that is, increasing the total amount of money on deposit) and figuring out how to use that money so as to maximize shareholder value (that is, determining good opportunities to lend that money out to third parties, valuing security backing up those loans, and keeping payments on those loans at favorable interest rates coming in the door). Those are jobs that computers and robots can assist in doing, and for which objective criteria can be outlined in advance, but inherently involve a degree of judgment that for the foreseeable future only a human being can offer. Banks will always need human employees doing those kinds of jobs.

  2. Inefficiency creates jobs.

    I’ve heard stories about the boom in India where an executive would ask for a computer and, instead, he got a secretary. The secretary was cheaper than the computer.

    I’ve no doubt that computers have made many administrative jobs obsolete. As computers get better and better, they’ll make IT jobs obsolete as well.

    • I don’t know, as long as there are printers, there will be IT jobs. There is no piece of technology I know of that spontaneously stops working for no reason like printers do.

  3. There seems to be a lot of bizarre twisting of Obama’s words here. All he did was point out a reality. Automation, in the form of ATMs, airport kiosks, and a myriad of other advancements, do eliminate jobs. That is a fact. If the elimination of jobs is bad for the economy then, yes, we can objectively conclude that ATMs and kiosks hurt the economy. Of course, we would also need to look at the other impacts of such advancements to determine the net impact on the economy, but the impact of something is generally measurable and objective. If Obama is bringing attention to this point and we attack him for it, we are killing the messenger for the message.

    One area I’ve always thought about this is with EZPass and other automated toll keeping. I’m sure there are many people who lost their job because of the introduction of such technology. But how much more efficient is transportation and shipping? If goods are getting places faster, surely that is a benefit to the economy. If people are spending less time commuting and more time either at work or enjoying free time, surely that is a benefit. If cars and trucks spend less time idling in long toll lines, reducing their gas consumption, surely that is a benefit. Now, many people might not notice these benefits. But they are there. And, unfortunately, the positives and negatives are not evenly distributed (one person loses his job, a huge negative, while hundreds enjoy incremental benefits). Regardless, the reality is what it is and people can respond accordingly. They can even choose to weigh different impacts differently. But they shouldn’t kill the person who noted the reality.

    • I was thinking about commenting on this post, but held off. As it turned out, BSK said everything I had intended to, more of less.

    • BSK,

      I think we are in agreement on the economic analysis. And I obviously wrote my post offering at least a lukewarm defense of Obama’s statement. In light of your more spirited defense, though, I will take the opportunity to offer an “on the other hand” point. I’ve frequently suggested the trouble with macroeconomics is it has a reasonable sounding justification for almost anything a politician wants to accomplish and, for that reason, can be a terrible nuisance. Are government revenues flush? Economic theory A says spend more money. Are government revenues anemic? Economic theory B says spend more money. Now, an economist from school A would probably advise against spending when revenues are anemic, just as an economist from school B would advise to create reserves when revenues are flush. Politicians, on the other hand, don’t bother with consistency and will spend no matter what, citing to whichever economic theory supports them at the time.

      I think this is the sort of political rationale behind Obama’s observation about ATMs. He knows innovation is good. He knows it has the effect of making life better for lots of people, even though it causes uncomfortable readjustment periods. Because he finds himself in office at the time of one of those uncomfortable readjustment periods, however, he suddenly finds it necessary to suggest that innovation is a problem.

      If we wanted to be very precise with our language, we would say that a politics that would countenance stifling innovation through government in order to preserve a certain standard of living is “conservative” in nature. In fact, it is in this way that the Progressive movement was closely connected with conservatism. “Fiscal conservatism” is a misnomer to the extent today’s conservatives are actually quite liberal—i.e., decentralized and progressive—in their approaches to innovation. Today’s liberals, in contrast, and as evidenced by Obama’s statement about ATMs, are quite conservative—i.e., resistant to changes that might disrupt the status quo.

      Modern liberalism, if it is guided by anything, tends to be guided by modern economic history. Yet, I don’t think this was behind Obama’s observation about ATMs, which was probably guided more by political self-survival than anything else.

  4. “Because he finds himself in office at the time of one of those uncomfortable readjustment periods, however, he suddenly finds it necessary to suggest that innovation is a problem.”

    But does he suggest that innovation is a problem? I don’t read that in the quote provided. Sure, he mentions a “structural issue” but offsets this by noting that it is a necessary externality of companies becoming more efficient. I really don’t see him even implying that we should halt or question innovation. At most, he is saying that there are consequences of innovation that are undesirable.

    Also, Tim, please note my issue wasn’t so much with you but with the Fox News spin and those who are attempting to parse something from the President’s words that aren’t really there. As for the rest of your analysis, I’m not well versed enough in the interaction between politics and economics to weigh in. I was really just taking on what I saw as unfair criticism of the President’s words here. I’ll watch the video when I get a chance to see if there is more there, but I do not have an opportunity to do so (though my hunch is that Fox would have gladly quoted anything else that would have been more damaging).

    • I just figured BHO was bloviating the obvious b/c the unemployment rate is so high, and it’s arguably his fault. [Or at least responsibility.]

      And I’m not a gotcha guy, and don’t know if this assertion is true

      For a start, President Obama is wrong as a matter of fact. From 1985 to 2002, U.S. banks added some 300,000 ATMs around the country, but also added 42,000 bank teller jobs. The Bureau of Labor Statistics predicted in 2010 that a further 40,000 or so teller jobs would be added by 2018 — presumably not as the result of mass removal of ATMs. ATMs allow banks to employ tellers in more useful services than simply counting and distributing money, as well as serve customers during late night hours when it is not feasible to keep branches open.

      But if it is true, this is the sort of seat-of-the-pants inaccuracy that puts Palin on the front page for a week.

  5. Rumpswabism to a new level, Mr. BSK.
    Do you perhaps have a Bamster blow-up doll to keep you warm and snuggie at night?

  6. How do you know the person killing the other person isn’t doing it in serf-defense? How do you know the person getting “killed” is actually getting killed. Maybe the person getting killed shot the killer. Maybe the killer was shot or seriously wounded to the extent that his only choice is to fight back in self-defense.

    And when you arrived at the scene is crucial–if a fight had already ensued, your first-hand impression are meaningless–if you happened to get there sooner, your impressions

    What in the world does, “So, while the percentage of victims decreases, the percentage of murderers increases” mean? If the last two people on earth get into a fight and one of them ends up killed, 100% of survivors/murderers DOES NOT increase the percentage of murderers–it was the same before as it was after.

    • “serf” defense? An obvious typo but I almost like it.

        • No, BSK, it was the correct thread. Why would you think otherwise?

          One of these days, who knows, maybe we’ll find ourselves in agreement. Can’t imagine how or why, but who knows.

          You are fun to read, so please don’t take these things personally.

          • Randall-

            There was nothing about “killing” in this post. Your comments seemed related to a thread on the main page by Kuznicki about the difference between murder and war. I struggle to see how your comments on self-defense, murder, and killing are related to a post about ATMs and the economy.

            I don’t mind disagreeing. It is how we learn. I just wanted to make sure your comment got where it was supposed to go.

          • BSK,

            I think Randall was talking about rogue ATM’s that go about killing or kidnapping unsuspecting customers who use out-of-network debit cards to withdraw money but decline to pay the extra $1.50 fee for withdrawal.

            This problem is so grave it’s almost like a ticking time bomb scenario. And therefore we should torture people.

  7. My goodness, Tom, why do you find it so necessary to recapitulate every scenerio that comes before you? But,but, but, but–do you know that at a minimum, your initial responses by a 98% margin want to play Krissy feety with whomever liberals want to throw in your path—you seem to have an enormously need for acceptance. Listen, it doesn’t matter Mr. Kowal–good God, to begin with a sentence with, “we’re in agreement with……” Just cut the crap, dammit–we ARE NOT in agreement with A, B. C, D. E, und so weiter. Milquetoasts are worse than their opponents and if you want to play kissy-up to your antagonists and opponents, fine, just show don’t throw your loyal brethren into the liberal lions den–we don’t need any more craven cowards to speak for the vanquished–we’ll hang on to the end of time!

  8. You could certainly see your skills within the work you write. The sector hopes for even more passionate writers like you who aren’t afraid to mention how they believe. Always follow your heart. “Faith in the ability of a leader is of slight service unless it be united with faith in his justice.” by George Goethals.

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