The long term prognosis for work in the United States suggests that a very large number of American workers will find that their jobs have been displaced… permanently. The recession was only the accelerant of inevitable change. Manufacturing has been decimated by lower-cost labor overseas (the “Rust Belt” is heavily oxidized), and retail has taken a double “Internet hit” from the most diabolical form of price comparison the world has ever known to the easiest shopping experience available in history. Managed care and reduced consumer earning power have hit the government regulatory wall as healthcare workers, while guaranteed with longer term employment, are also slammed with earnings-killing cost control structures. Likewise, lawyers who depend on personal representation – versus tax, securities and corporate lawyers who have the joy of complex multinational legalities to deal with – are finding a significant decrease in individuals’ ability to afford routine legal services and a plethora of Web-based alternatives.
Want to see where the next millionaires are coming from? You only have to look at those cities and towns where the recession is barely visible: rural communities, those not impacted by the drought that rages across so much of America, are wallowing in the rich mud baths of commodity price increases. Or cities like Washington, D.C., where the rich and power gather to pressure government to do their bidding, the Silicon Valley/Seattle where entrepreneurial excellence continues to produce global digital products that are very much in demand and New York City, where global financial barons plot their next international miscreant endeavors. Look at the local real estate prices. There will be pockets of exceptions all over America, and some will represent microcosms that mirror the success of NYC and the Silicon Valley, while others will provide t hose glaring exceptions in uniquely creative cultural and entertainment achievements. We won’t even talk about the military industrial complex that will continue to provide cutting-edge technology and specialized employment for decades to come.
Make no mistake, the United States will continue to provide massive new inventions and services that are absolutely going to be mega-wealth-creating endeavors. The better our universities and educational systems, the more such economic benefits will flow into our national coffers. If you abstract what we seem to be doing better than the rest of the world, creating new ideas and providing financial services are clearly the big drivers. But if any of those new ideas require where any massive, non-automated manufacturing, pretty clearly they will be outsourced overseas until the U.S. dollar falls to a level where American labor becomes competitive again. These two arenas may be drivers of wealth, but they are not drivers of American jobs. Never before has the American economy been so dependent on entrepreneurial invention, and never before have the major vectors of our economic future been so obviously polarizing: wealth for the few who have those ideas or provide those services and lowered expectations for most everyone else. Look at England after the empire fell if you want a very concrete model of what our future may well become.
We’ve already seen the profits statements from the big New York banks, and most Americans have been tracking that excess with a reasonable eye… watching how the taxpayer bailout money made others rich. Washington is obvious as we watch special interests dilute any legislative threat to their financial well-being. But take a really good look at the Silicon Valley: “Traffic chokes the 47-mile stretch of Highway 101 from San Francisco to San Jose. Dueling billboards on the side of the highway compete for engineers who, with bidding wars for their skills, have seen their pay and stock options soar… New Prius hybrids purr into employee parking lots, and a Tesla roadster and even a Lamborghini have already been spotted at LinkedIn Corp., which went public in May, turning nearly every pre-IPO employee into a paper millionaire.
“Office rents have shot up as much as 35% in some prime locations. Hotel occupancy rates have topped 80%, sending room rates higher. Business is brisk at the Menlo Park branch of upscale grocery chain Draeger's, which takes pride in stocking its shelves with the kind of duck foie gras and other delicacies found at Harrods in London or Fauchon in Paris. Hot start-ups such as Dropbox in San Francisco, which helps its 25 million users store and share photos, videos and documents, are negotiating funding rounds that would make them worth billions. Even the rooftop parties popular during the last major tech boom are making a comeback.” Los Angeles Times, July 17th. With this obvious economic displacement comes the concomitant political anger with a tendency towards ineffective “slogans in lieu of solutions” and denial in place of invigorated efforts to upgrade educational skills to provide services that the world actually wants.
The battle over the debt ceiling seems to be nothing more than the arrogance of a society that simply does not know how to deal with this polarization, with the rather obvious failure to cope with a contracting standard of living for the majority of Americans. It is the rather immature rant of those who ran up a very big tab, particularly waging two major wars while reducing taxes, and now don’t want to pay the bill or even invest in their own future. If the ratings agencies lower our debt rating, we will pay more money to service that debt… requiring… er… increased taxes and decreased spending. We are government of legislative followers – tracking poll numbers and making blind pledges so they don’t have to make the hard decisions when the nation requires; we have not had any serious leaders for several decades. The world has changed. The values that can keep America working and strong have changed. If the United States falls into the black hole of economic devaluation of her own making, how many of our former and current enemies will be cheering? If we default and everyone, including the U.S. government on the national debt, pays higher interest on everything (credit cards, mortgages, loans of all kinds), who will care… except us? How frustrating will that be when so many of us know that we really didn’t have to go there?
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