I’m never quite
sure whether politicians, taken as a whole, are really too dumb and/or
uneducated to understand the real world, or if they just think we, the voting
public, are too dumb and/or uneducated to understand complicated explanations,
so they give us simple ones. Perhaps it’s a little of both.
Both parties in this
election have been promising to restore lost blue collar jobs (which just isn’t
going to happen). Both have blamed free trade deals and outsourcing as the culprit.
Actually, studies suggest that only around 10-12% of job losses are from outsourcing
and trade agreements. (see, for example, the paper Trade Deficits and Manufacturing Job Loss: Correlation and Causality )
The rest were lost to automation. It turns out automation is actually the big job destroyer, both in America and around the world. (see, for example, Trump Doesn't Need ToBother Apple About Manufacturing In America--Foxconn Replaces 60,000 WithRobots) And automation isn’t going to get reversed. Indeed, automation is rapidly invading even the higher-skill middle class job markets, enriching the 1% even more and putting even more people out of work.
Now the real
brilliance of the Marshall Plan after World War II was the realization that it
was in America’s interests to rebuild Europe, because American companies needed
European markets to prosper, and those markets weren’t going to come back until
Europe was rebuilt and European economies were healthy again.
The 1%, and the
politicians they buy, need to understand a similar principle. It is all very
well to reduce production costs (and increase profits) by automating manufacturing and services, but unless
a way is found for all the displaced workers to earn a good living, there is no
market for those goods and services.
Henry Ford was smart enough to pay his workers higher than average wages
so they could buy his cars. Today's business owners need to think the same way.
Neither
political party seems to have understood this yet, or if they have, they haven’t
put any apparent attention to solving this problem. Certainly neither Clinton’s nor Trump’s
campaign speeches suggest any understanding of the underlying problem, nor have
I seen much discussion of it among the academic think tanks that feed off of
Washington’s largess.
But it seems to
me this is the single largest problem facing the nation today.
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