Hooverville http://depts.washington.edu/depress/hooverville.shtml
Dear Ian,
As I tried to explain (rather incoherently while preparing last night's dinner), America's entire political spectrum, left and right, is ignoring "the elephant in the room."
Traditional "brawny jobs" are being eliminated by robotization, automation and ever-increasing productivity that attends each new generation of commercial (and institutional) software.
These rapidly disappearing "brawny jobs" were long considered "the most stable jobs" in any nation's economy since they deal with the "survival issues" of food production, clothing manufacture, the manufacture of cars and trucks - even housing, an increasing percentage of which is "manufactured housing."
As a result, America's "full employment" rate grows ever smaller.
Growing up in the 1950s, "full employment" was defined as an unemployment rate of 2% to 3%.
Prior to The Great Recession, the acceptable rate of unemployment had risen to 5%.
During the Bush-Cheney years, unemployment was kept artificially low due to the erstaz construction boom financed with money "borrowed from the future" (to the dire disadvantage of the nation.)
Since robotization, automation and software enhancement are in perpetual process of refinement, "normal" unemployment will soon be over 7%.
With the passage of time, structurally-mandated unemployment will go even higher - at least to 9% in my lifetime and possibly in excess of 10%
Unless we ghettoize the chronically unemployed (which I do not advocate) -- and/or improve our educational processes -- American society will undergo increasing bifurcation into "haves" and "have nots."
Somalia, here we come!
"Our Banana Republic" by Nicholas Kristof - http://www.nytimes.com/2010/11/07/opinion/07kristof.html
"A Hedge Fund Republic" by Nicholas Kristof - http://www.nytimes.com/2010/11/18/opinion/18kristof.html
Or, if we wish to avoid rigid plutocratic stratification, we WILL enact some version of John Maynard Keynes' advice for managing unemployment in unusually hard times.
What, exactly, did Keynes advise?
Since there is pressing need to keep money in consumers' pockets --- both to "drive the economy" and to insure that "everyone" might live a dignified life --- Keynes (when contemplating economic extremis) advocated job creation by "paying people to dig holes... and then paying other people to fill them up again."
"How to End The Great Recession" by Robert Reich - http://www.nytimes.com/2010/09/03/opinion/03reich.html
There are other creative ways to create meaningful work, but, one way or another, "The Automated Machinery of Production" has permanently eliminated many jobs that were once considered indispensable forms of human employment.
To be clear: these jobs are not coming back.
Ever.
It is inconveniently true that many disenfranchised workers - particularly those with IQs in double digits (as is the case with half of any population) – will only find employment through government intervention.
Fortunately, government-sponsored "job creation" is endorsed by every conservative American, all of whom support the United States military and the admirable system of socialized medicine provided by the Veterans Administration.
Other employment opportunities will arise by transforming education so that people learn to "create their own work in the world," abandoning current dependence on "teat jobs" created by capital-intensive industry" and the "trickle down" economics that typically means "trickled upon."
Educational reformation will be two-fold. First "we" will cease indoctrinating docile workers.
Then, "we" will equip our young people with skill and vision to create work suited to their individual genius, obviating erstwhile need to submit to other peoples' visions, visions that often require the betrayal of one's "better angels."
The following blog entry explores the impertinence-and-dysfunction of America's mostly 19th century instructional methods, simultaneously illuminating the way forward. http://paxonbothhouses.blogspot.com/2011/10/daily-dose-october-25-2011.html)
Here's a good article concerning the ongoing expansion of automation and robotization - "Will Robots Steal Your Job?" http://www.slate.com/articles/technology/robot_invasion/2011/09/will_robots_steal_your_job.html
Pax on both houses,
Alan
PS Cornell economist Robert Frank's brilliant interview with Diane Rehm. Listen, and you will change the way you think about economics - http://thedianerehmshow.org/shows/2011-10-27/robert-frank-darwin-economy-liberty-competition-and-common-good
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