Technology, Wealth and Jobs

One of the things talked about in a recent blog is whether the economy and life we knew before this series of economic busts beginning in the 1990s hit us will return. Since the end of WWII when hundreds of thousands of young men came home to continue their education and the pent up wealth that accrued to men and women working in industry through the war went to market, life just got better and better. Unions got wages raised, more people bought mechanical possessions, factories produced more things and that required more workers. Farming became a census category that got smaller and finally disappeared. The invention and continued development of electronic devices applicable to daily life led to continued employment and increased “enjoyment” of life. Sending a man to the moon was hailed the beginning of accomplishments unthought of.

Recently (in my terms), it was made possible for American firms to ship production to countries with much cheaper labor. Moving production from north to south in the United States for cheaper labor had occurred after WWII, but now textile and furniture in North Carolina have gone to Asia. Whatever the product, it could be made cheaper in Asia and by the turn of the new century jobs in everything from steel making to computers were going overseas. What was left in this country was being produced with fewer people and more robots.

The recent recession simply brought this problem to the forefront. So far the situation has been explained and handled simply as an old fashioned recession. The Federal Government has dug down and provided more help for the unemployed and the Fed has bought bonds like mad and kept the stock market happy. Most commentary is about when, not if. One of our problems is too much stuff, not too little.

Very few people talk about this conundrum. One who does is Stephen D. King (not the scary novel author). His latest book, When The Money Runs Out: The End of Western Affluence makes the blunt point that economic growth that we have been used to isn’t coming back. Governments will have less wealth to redistribute and divisions in our society between haves and have nots will grow. A week later Robert Samuelson cited King to raise the question whether, and how, economic growth can be started. He raises the issue about whether we are witnessing a turning point in our history and cites other scholars in his discussion without answering his question.

In the same issue of the Washington Post, Lawrence Summers tackles the problem using different data, but coming to the same question as the two previous authors. He has several suggestions for public spending, which he has laid the basis for earlier in his discussion. One of them is that more money be spent on public infrastructure. A recent news story about deteriorating highways and bridges and the cost to shipping companies using figures generated from the companies provides supporting evidence.

In one sense these authors are depressing. In the larger sense they are encouraging. Consideration is being raised beyond financial markets which in themselves generate little economic growth. These columnists and news stories are giving us something to focus on that could be the basis of growth. What we need is this kind of discussion. Not only could something real come from it, but it could raise the spirits of those of us fed a steady diet of stocks, bonds, banks and Congress. And, the majority of legislators could get away from the political games played by a few of their colleagues.

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