Those Jobs Are Not coming Back

Bill

In an unguarded but brutally honest moment, John McCain uttered those words during a campaign stop during the Michigan primary campaign in January 2008. He lost that election to (who else?) Mitt Romney, who prevailed in his home state by telling Michiganders what he thought they wanted to hear (sound familiar)?

McCain's lament, however politically unfortunate, gets down to the nub of the problem now confronting millions of American workers with rapidly diminishing prospects and limited adaptability. Long gone are the days when a strapping fellow could captain the high school sports team, slide by with C's, go to work in a good job in the local factory, and single handedly feed his family, buy a new car every few years and head on up to the fishing cabin at the lake every summer. Long gone is the postwar American hegemony (will there ever be such a halcyon period for a country again?) over all matters economic. Gone are millions of jobs at labor intensive companies, in steel, automobiles, farm implements, textiles, furniture and on and on. The argument the Washington wonksters who so dissatisfy you are trying to make is that the relation between productivity, which continues to advance relentlessly, and employment seems increasingly disconnected. Adapt, innovate, be nimble we are told by pundits and policymakers on both the left and right. Not so easy for many. As a charity for my national society I recently interpreted a series of cardiac imaging tests done in a remote village somewhere in India. It was not lost on me that if those pictures could be sent to me from half way round in the fiber optic blink of an electronic eye, then the same pictures from my patients could be sent with equal facility to someone in India or elsewhere who would interpret them at a fraction of the price I currently charge.

While I defer to you in all matters economic, I remain puzzled at the hallowed place that consumers seem to hold in your economic cosmology. I'm all for consumption. mind you, happy to shop with the best of them and as intent as the next fellow on getting the cheapest deal. But cheap deals won't do a person any good if they have no money. Consumers are always something else first, heads of households, single parents, high school students, hedge fund managers or out-of-work home builders. As the economist you love to hate argues repeatedly, the cause of the current economic doldrums is not capacity, it's demand, or more accurately, lack therof. You can't spend what you don't have or can't can't borrow (unless, or course, you are a sovereign government). I'm not sure how more of our countrymen can reenter the virtuous cycle of working and spending, but I'm pretty sure the working, for most will have to begin 1st.  

That's the challenge for policymakers. Maybe, as I surmise you would argue, the answer is to simply get out of the way. If you want to call a group of folks ignorant of what's really going on around them though, I'd begin with that distinguished group in Washington who inhabit the United States Congress.

Eli