President Obama says the problem with our economy is that we have too many machines replacing people. He specifically mentioned ATMs.
This is a classic economic fallacy. Capital, such as machines, make labor more productive. One person can produce more using a machine than he can without it. That makes labor more valuable, not less. Any introductory economics class covers this. It’s sad that the president of the United States does not understand it.
Yes, technology can produce temporary disruptions as its ramifications work their way through the economy, but it has always been thus. It’s not a special problem now. (Besides, ATMs have been around for ages.)
Moreover, any disruption in today’s economy caused by technology is dwarfed by the disruption caused by Obama’s multiplication of the regulatory state. And that brings up the one sense in which the accumulation of capital could be seen as a negative sign: If the relative costs of labor and capital shift, so that labor becomes relatively expensive, businesses do have an incentive to substitute capital for labor. That is, capital does not cause labor to become less valuable (Obama notwithstanding, it’s quite the contrary), but capital can become more attractive if labor becomes less so.
This might actually be happening. As Tom Blumer put it, ATMs are exempt from Obamacare.
UPDATE: Another good rebuttal, along the same lines.