The almost-always perspicacious Steve Pearlstein has a sobering column in the Washington Post today. And when you combine it with this series (and the accompanying slide show) at Slate, it brings to mind what Thomas Jefferson once said, about a just God and trembling for one’s country.
These two scholarly presentations confirm what middle class families will tell you--that the hollowing out of the American manufacturing sector, which used to provide all those good-paying jobs for kids out of high school, or with a little college, has cost us mightily, in both the short term and long term.
The Slate presentation analyzes long-term income inequality in America, which has soared since the U.S. economy ran aground in the late 1970s. I was starting out as a journalist then, and all I seemed to write about were companies dying and factories closing. Then the 1982 recession came along, and things got even worse. The high-tech boom let us rebound, but no amount of American ingenuity was going to change the fact that the hungry Chinese were willing to work at a fraction of the cost of what U.S. workers earned, building the gadgets we covet. And still are.
You can yak all you want in the coming election about whether we should extend the Bush tax cuts to the very, very wealthiest Americans. (I have said here we should not.) But the Slate presentation suggests that education, not tax policy, is the crucial determinant in income disparity. American kids with good post-secondary educations will continue to climb the income ladder; the rest will get a chute.
Pearlstein’s column deals with more recent developments. He shows how our long-term challenge was disguised by the roar of a consumption-based economy, fueled by second mortgages, equity loans, greed on Wall Street, and other features of the housing bubble. We let the structural problems fester and when the bubble popped, wound up where we are today, with two million manufacturing jobs, and two million construction jobs, lost since 2007.
We have allowed our industrial and technological base to deteriorate as talent and capital were grossly misallocated toward other sectors of the economy, even as other countries were able to attract the investment, the technology and the know-how to serve the U.S. and global markets.
For a time, none of this seemed to matter because we were consuming so much that we were able to support job creation at home as well as overseas. But now that the debt-fueled consumption binge is over, we find that we don’t have the companies, the workers or the competitive products to replace the stuff we now import or expand our share of export markets."
Don’t believe in kings. Get yourself to class. Apply your good, innate American skepticism. And follow the leader who is willing to tell you how hard and long we will have to travel on the path back, and how it will hurt.
“In this election season, the politicians who are really serious about creating jobs … won’t be the ones screaming about tax cuts, or stimulus or some imagined government takeover of the economy,” says Pearlstein. “They’ll be the ones talking about how to make the American economy competitive again.”