Jobs! Jobs! Jobs!

by Dennis Green

They ain’t comin’ back. America is in for a decade-long economic slump, similar to the one Japan went through, and for many of the same reasons. Balloon! Balloon! Balloon! One after another, from the internet to housing to investments with Bernie Madoff.

Many of those jobs are in obsolete industries, manufacturing jobs that have gone overseas, jobs in retail industries that have peaked, (such as apparel), jobs in newspaper staffs as advertising moves online. Book publishing and the pulp and paper industries are next, as e-readers gain in popularity.

It is often said that Americans are socially conservative at heart, that our morals change slowly, or not at all. (“Same-sex marriage? Gasp!”). But that viscosity also applies to our workforce, to our education system, to our factory-line mentality, which remain stuck firmly in the past.

No high-speed rail, no new pellet-based nuclear power plants, very little modern architecture. We even stopped making electric cars and destroyed the ones we had.

But only the media, and the Republicans are saying that “Jobs! Jobs! Jobs!” will be a major issue in the Fall elections. I seriously doubt it. Even if you’re out of work, are you going to blame the President? If you’re an unemployed lifelong Democrat, are you going to vote Republican…to do…what? Get even? Not if you lost your job or your house in 2008.

As usual, the logic is befuddled. Most of those jobs are not coming back, because the American spending binge is over. People who topped out their credit cards are going to be paying them off for the next 10-20 years. They ain’t gonna have any discretionary spending. If Macy’s laid off half their employees, they aren’t going to hire them back. Not ever.

And it will take us at least ten years to develop those new industries that are needed, such as the “Green Revolution” in housing, autos and electric power generation. There is already massive resistance to the kinds of large power lines needed to get electricity from the wind or solar farms onto the grid. And very few bloggers earn more than $500 a year.

Moreover, if the rising federal deficit forces cutbacks in spending, in pushing up the age for collecting social security, cutting back in defense, closing loopholes in Medicare, some people will stay in the workforce longer, and many people in the military and in healthcare will go unemployed. Public employee unions will resist, but there will be layoffs of teachers, city workers and state bureaucrats.

The real estate industry will not recover soon either, with millions of mortgages still underwater, homes in foreclosure or short sale still kept off the market by local banks. They are already suffering badly from the collapse of the commercial real estate market, office buildings sitting empty and vacant lots where only a few years ago massive projects were planned. The million dollar penthouse condo may be a thing of the past.

Along with conspicuous consumption, irrational exuberance and madcap breakfasts at Tiffany’s.

All through the ‘90s and the ‘00s, our economy was grossly inflated, primarily by a willingness of businesses and individuals to go deeply into debt. The big banks and financial institutions are now awash in cash, but not lending, primarily because no one wants to borrow. Even mergers and acquisitions are way down from five years ago.

Japan went through a similar period of inflation during the ‘90s, greatly expanding the public payroll and social welfare benefits, especially for the retired worker. Their deep and serious recession lasted more than ten years. Many Japanese premiers during that period resigned, some in disgrace.

Whether the U.S. government can avoid a similar lasting recession remains to be seen. A recent multi-billion jobs package went primarily to the teachers’ unions, not private sector employment. Teach! Teach! Teach!

©2010 Dennis Green