What CAN we do?

I was recently perusing the DailyKos and I came across this video. Take a look...

It all sounds so convincing, doesn't it? Great artist, patriotic pictures, hard working Americans just trying to do what is right and, of course, evil businessmen trying to scarf up everything good about this country for themselves. What could be wrong with that story?

I grew up in the 1960's. I can remember, through the lens of a naive kid, how things were. We were pretty happy in our lives and things were pretty simple.We seemed to have enough money, but we really didn't... or did we? My dad had a 'good' job at the railroad, but he worked his butt off. Outside. In the heat. In the rain. In the cold. Nasty work, but he had a job. We barely had enough money to make ends meet. I remember milk was 4 cents at school. If we took a nickle with us to buy a carton, we had to bring the penny back. Seriously. Did we know we were poor? Not really, and there were others a lot worse off than us.

Patches on pants and torn clothes were not a fashion statement, it was just part of growing up. My mom would mend them, which was OK. My teeth are still crooked because kids didn't get braces back then. We didn't have the money for braces and there was no peer obligation to get them.

When school started, we bought our books and meager supplies ourselves. No one made the other kids show up at school with extra supplies to share. We bagged our lunch since there was no free lunch program. Incredibly, we were able to learn without the use of whiteboards and dry erase markers, computers on every desktop, projectors with touch-screens in the classroom and security guards at every entrance.

And what about those great jobs everyone reminisces about? Were they really that good? I don't think so. Factory jobs were not an object of people's lust. Factory jobs were routinely derided as human abuse, with people lined up at their machines doing mind-numbing, repetitive work in oppressively hot workspaces, day in and day out. What was the answer to this misery? Unionize!

After unionization, wages went up and work rules changed. Some workers started making more money. Good for them. Manufacturers saw their costs starting to skyrocket, and dealing with workers became such a hassle (between union rules and OSHA rules), they put more emphasis on automation. Workers subsequently had less "work" to do and less workers were needed, so those that remained demanded more money by striking (which you must admit, striking is extortion in it's rawest form). Life was finally getting sweet for the proletariat.

Meanwhile the evil corporations were seeing foreign competitors eating their lunch (can you remember how we maligned the Japanese in the 70's and 80's and it was a common belief that they were going to eventually own the USA? After them it was the Mexicans and now it is the Chinese as the bogeyman.)

So businesses started "shipping our jobs overseas". I love that term. While it is true that some factories were literally shipped overseas, more likely it was that instead of refurbishing and upgrading the US factory for the next generation product, they just retooled and built new in China or some other Asian country that had less burdensome OSHA and EPA restrictions and the labor force would work for pennies on the dollar.

At this point, those crappy jobs that everyone liked to complain about and strike against to squeeze more money out of the captains of industry were starting to look pretty good. It seems that the Golden Goose had gotten cooked.

About the time that the whole manufacturing contraction should have caused a catastrophic collapse of business in the US and in the world, the Internet came along. WOW!!! Who could have predicted that? Suddenly value and riches were being created out of thin air. President Clinton likes to take credit for that boom time, but Khrushchev could have been president and the economy would have done well.

Almost overnight, there were gobs of money sloshing around. Like water from a swollen river filling a reservoir, the money had to go somewhere. Coincidentally, the government had recently forced banks to relax their lending standards for home mortgages, threatening them with penalties and prosecution if they didn't help un-creditworthy minorities purchase homes and be able to participate in the American Dream.

And these weren't just any homes. Many were McMansions, homes bedecked and bedazzled with the latest cool features. Loans were worked and reworked to get buyers to qualify for interest-only loans, but no need to worry, just re-fi in a few years when the equity has built up (due to the bubble, of course.)

To put the cherry on top, Fannie Mae and Freddie Mac were waiting there to gobble up bundles of these mortgages, stamp them with a tacit US Gov't Seal of Approval and sell the bonds to willing masses awash in the overflow from the tech bubble.

Then, 10 years ago, 9/11 disrupted everything. The market was already trying to correct, but the government expanded greatly to meet the threat, military spending blew up (pun intended) and various stimulus packages were tossed out like aid packages from relief helicopters.

Finally in 2008 the levee that had been holding back all of the bad economic voodoo burst. You all know what happened next. Credit shut down, banks almost went bankrupt, many nations teetered on the brink of insolvency, businesses pulled back and started laying off hundreds of thousands of workers.Millions started collecting unemployment insurance.When that ran out, it was extended and extended and extended again (rumor has it that Obama wants to extend it for yet another year.)

What a mess!

So, let's see where we are now. Minimum living standards compel the average American to have cellphones for everyone in the family, an apartment or home equipped with air conditioning, a dishwasher, a microwave, a refrigerator and cabinets full of prepared food, cable or satellite TV, Internet, several computers, several cars and several bathrooms. People feel entitled to full medical coverage. People of lesser means expect their children to be cared for before, during and after school with meals, books, and various forms of daycare. It is almost considered child abuse if you don't enroll your kids in soccer, T-ball, dance, karate, cheer or a host of other rather expensive activities. I could go on, but you all know the drill.

Over the course of 40-50 years we have priced ourselves out of our simple existence and like a junkie needing a fix, it is not easy to do without. In fact, there is no one that would even consider going back to the way things were. But this exposes a dilemma. We (the collective 'we') have pushed all of the undesirable employment opportunities off-shore, we have gotten used to working in service jobs (but not the really menial service jobs that are best left for legal and illegal immigrants), and we have gotten used to employers being willing to pay decent money for us to have those jobs.

But, a funny thing happened on the way to the bursting of the housing bubble and the ensuing credit crisis... after massive layoffs (done under the cover of the crisis and the fact that every other company was laying off huge numbers of people), employers found that they really didn't need all of those people after all. Efficiencies and automation have obviated the need for a whole cohort of workers.

So, now we have massive unemployment of unskilled, under-skilled and even highly skilled people. Some of these people are living in homes they cannot pay for and which no one will/can purchase from them. Lifestyle 'requirements' have exacerbated their cash flow needs.

Even with all of this credit ugliness, the majority of the unemployed are just 'victims' of a naturally occurring phenomenon that happens in regular cycles. Unfortunately, this latest cyclical downturn was delayed for about two decades while fortunes were made, and in many cases, lost.

Looking at this situation on Labor Day 2011, it should be obvious to anyone who wants to take a serious look at things, that most of the lost jobs are not coming back... ever. The tech revolution of the past two decades slowly and silently used computers, software and the Internet to do the heavy lifting for companies so that when they laid off their 'excess' workers, the company continued to run.

So, what CAN we do?

Those people who have the fire in their bellies that compels them to do something will find something. They will leverage new tech and use it to fix old problems. Some will hire others while some will continue to work alone. The economy is not a zero sum game. New jobs and new value can be created out of thin air... it just takes effort and that old trait, gumption.

I don't have much hope for the masses who are running out of year #2 of unemployment coverage. Unemployment checks, food stamps, WIC, Section 8 housing, etc. is not what makes an enviable existence, but it does allow you to exist. The wait for someone to hand someone a job is going to be a LONG wait.

If you take an honest look at the history of labor you will realize that the prosperity that we had between 1946 and 2008 was an anomaly. Before that time, much of the workforce in the world was agrarian and those that were off of the farm and into the cities were semi-skilled laborers. People that did basic work have never, in the history of mankind, done well for themselves. The gap between the haves and the have-nots has always been huge. The gap narrowed in the 20th Century due to technology, labor unions, activist churches, government rules and pressure, and in many cases it was financed by credit with future generations being responsible for the debt service.

Most of the new jobs are going to be truly knowledge worker jobs. Sure, there are going to continue to be skilled, physical labor jobs and the people that can do the tradework will do well, maybe even better than before. High tech jobs are going to be in demand, but even those jobs are going to be involved in wrenching re-definition.

What I worry about the most is the people that held low-skill or semi-skilled jobs. What are they going to do?  After 2-5 years on the dole, will they be willing to retrain themselves to do something that is completely foreign to them? Will being out of work for so long "poison" their desire to find work?

What this country needs... actually, what this world needs, is the next Internet-style disruptive technology to occur. And when it does and the visionaries who were involved with the development become extremely rich,  the people that were invested in the plantations of the old ways will develop a little three and a half minute piece protesting the new way and they will invariably use the new way to get their old way word out.


Robert said…
I tend to agree with much of what you say in this article as I, too, am a child of the 50's & 60's. My family was really well off - if you consider not having any money but being able to have a pair of shoes for the new school year well off.

As far as your real question of "What CAN we do?", my wife and I have decided that our country will never be the same. It has been ruined by a series of incompetent leaders (Presidents, Speakers, Senate Majority/Minority Leaders, Governors, etc.) who insist on meddling. We are planning on building a home at least 2 hours from the nearest airport, use both solar and wind generated power to meet our needs, disconnect telephones/Internet/cable/satellite and live off the grid until the end.

Well, maybe not that extreme :) but we really can't stand the direction this current president is heading. And, if the pundits are right, we will have Obama-lite as the Republican "choice?" in Romney.

The next technology that you are hoping for may not occur due to regulations, taxes, anti-business laws, and just plain OWS-like Communism! I hope you are right and the changes come soon but don't hold your breath on that.

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