Now that the economy is officially out of recession, the question is 'where are the jobs?'. Jobs are still being shipped to low wage countries and being replaced with robots, automatons and computers. Productivity is still increasing due to machines replacing humans, and unprogammable work is still being outsourced to countries where workers will work for pennies on the dollar. No government program has been proposed for reversing this trend. In fact government programs, left over from the Bush administration are still in place, for encouraging the outsourcing, offshoring and exportation of jobs and retention of the profits offshore where they cannot be taxed.
And then there is always the hope for the next new industry that's going to get fired up and start the next boom cycle sort of like TV in the 1940s and the internet in the 2000s. Well, that new industry is nowhere in sight. Green technology might be that industry but private enterprise seems incapable of firing it up enough to create jobs, and government seems incapable of being the midwife. Meanwhile, other countries like China are investing heavily in the green economy, and Germany and Denmark have gotten a huge headstart. So while the US dithers, other countries take the lead.
While I believe the Obama administration would like to do something about the job situation and the subsequent foreclosure situation - home loss following on the coattails of job loss - any new Republican control of either Congress or the Presidency will lead to an era of total indifference to either of these crises. In fact it will lead to an era of acceleration of them. Obama so far has stuck an ineffectual finger in the dike, but Republicans would pull out all the stops and let the waters flood in. In fact the new paradigm would be not concern over 10% unemployment but celebration of rising GDP. How can GDP continue to rise while unemployment remains high, you might ask? Simple. Work has been outsourced. Machines have replaced workers. High tech workers with H1B visas have been insorced and illegals have been insourced to do the menial labor. The US is in the process of transitioning from a middle class society to a corporatocracy - a society by and for the rich. Obama's government has not created the equivalent of FDR's CCC or WPA. That's the Civilian Conservation Corps and Works Progress Administration. We need a NIIC, a Nation Infrastructure Improvement Corps or a GELR, Government as Employer of Last Resort. Instead we have the CCC - Corporate Control of Congress. Whereas FDR could ram the New Deal through, the Democratic Congress has 40,000 lobbyists breathing down their necks who could care less about creating new jobs for high wage Americans. FDR had maybe 400 lobbyists to contend with.
The new paradigm, I might call it the neocon paradigm, is that the economy can hum along very nicely with a high degree of unemployment, poverty and homelessness. A certain percentage of the population say 10%, 20% or even 30% can simply be written off as nonparticipants in the economy much less the work force. The remaining majority of people will keep the wheels of the economy humming. The economy simply does not need a large percentage of potential workers; it can get along without them and huge profits can still be made without their participation. In fact higher profits can be made withouut their participation. And because they will be reduced to penury, they will simply not be a revolutionary force to overturn the existing order, an order that will create great wealth for a few while a fairly large minority eke out a meager existence. Neocons are willing to test the limit of how great that minority can be while still sustaining a profitable existence for the investor class. How great a minority of economically disenfranchised people can an economy sustain without giving rise to a movement whuch would overturn that economy?
As we know from other parts of the world, a small wealthy class can coexist very nicely with a large impoverished class. In fact it is the norm in most parts of the world. Laissez faire capitalism tends to produce societies of large scale economic disenfranchisement. And in societies in which the political process has been taken over by lobbyists who are the handmaidens of wealthy corporate interests, this society is incapable of doing anything that would amerliorate the centralization and concentration of wealth in the hands of a few. Let's face it. FDR did not have to fight an army of lobbyists when he put forth the New Deal. The New Deal strengthened the American middle class. Corporate control of Congress fueled by campaign contributions and the revolving door promise of lucrative post-political jobs only strengthens the investor class while kicking out the jambs which support the middle class.
With the corporate takeover of the government virtually complete, there are no democratizing forces left that would spread the wealth to the middle class and the poor. The economically elite have taken over the world, and while that might seem a good thing to some - that the best and the brightest have gained sway over the riff raff - any society that professes to have a sustainable middle class must tamp down the ambitions of the elite and spread the wealth to the middle class. The elites are capable of creating great wealth with their superior intelligence and gargantuan work ethics, but that wealth creation no longer requires the participation of large numbers of manual and college educated laborers. Therefore, the average person is largely left out of this process. Meanwhile, effectively regressive tax policies accelerate the process of wealth creation for the few. CEOs, who used to make 40 times what the average worker made, now make 400 times that amount. Wealth creation tied to stock options mean that the bottom line becomes even more important, and the resultant created wealth is so huge that it can't possible be spent and is used to control the political process and the minds of the masses through advertising in addition to be passed down to subsequent generations in perpetuity thus creating an effective aristocracy. The sclerotic titled aristocracy of the British empire is being replaced by a hipper untitled aristocracy of inherited and perpetuated investor based wealth. The landed aristocracy which controlled the political process in 18th century Britain is being replaced with the stateless investor class of the 21st century.
The high tax rates of the Eisenhauer administration, which resulted in money being poured back into the business rather than being taken out in salaries, large amounts of which would be confiscated through taxation, have been replaced by low tax rates which give incentives to private equity funds to tear businesses apart and feast off the remains. Growing a business is no longer as important as short term profits because short term profits can make one wealthy without having to spend a lifetime building a business. When a person can make a billion dollars in one year as Bill McGuire of United Health Care did in 2006, it is not necessary to work more than one year in order to obtain immense wealth. That's why the emphasis is on short term profits. That's why Wall Street is focused on making a killing in a short period of time taking huge gambles and to hell with what that does to the rest of the economy. They took huge gambles and lost, the US government rescued them and now they're back to awarding themselves millions of dollars in bonuses which can only be sustained by taking more huge gambles. The casino economy prevails because huge incomes are not redistributed to the middle class. If they were, we would see a lessening of the casino economy and the building of sustainable businesses which, nevertheless, might not require the hiring of large numbers of workers. Instead we see short term large scale wealth creation and the creation of a landless aristocracy which controls the political process through the buying off of politicians. Rather than there being a House of Lords, there is a House of Lackeys who do the bidding of the untitled lords who control the economy.
We might pose the question 'if private enterprise under the best of conditions does not require the hiring of large numbers of workers, how will the US economy ever sustain a middle class which is predicated on middle class jobs?'. It may come down to the fact that the government will have to be the employer of last resort which would require a transfer of wealth from corporations and the wealthy to the government in terms of taxation and from the government to workers in jobs created by the government. If private enterprise cannot or will not create jobs, then jobs will have to be created and wealth redistributed by other means. In the long run this is not all that bad for business in a consumer led economy like the US (70% of US GDP is in consumption) since consumers will pour that redistributed wealth back into consumer items and hence into the businesses from which taxes were taken in the first place. The money will just be recirculated instead of going into the Wall Street casino.
Obama is fighting a rearguard action. Sure, he would like to help the middle class; sure he would like to help the poor. But he is boxed in and hemmed in by the moneyed class which buys off both political parties and upon whom both political parties depend for campaign contributions and revolving door jobs as corporate directors and lobbyists. So Obama is reduced to tinkering around the edges while Republicans salivate at the prospect of making Obama fail so that they can return to power and, with no apologies, accelerate the process of corporate control of the political and economic processes assuring themselves of great personal wealth by so doing. With neocon control of the media as exemplified by Rush Limbaugh, Glen Beck and Fox News, the neocons will continue to propagandize the so-called low information voters and channel their anger towards whatever progressive elements are left thus enlisting the middle class in a process leading to its own destruction and acquiescence in its own political and economic diminution and ineffectiveness.
The only hope for the future comes not from the US itself but from the rest of the world which has disenamored itself from the spell of America penis worship. As the US has discredited itself from its position of being the world's know-it-all, the Emperor has stood naked for the rest of the world (but not Americans themselves) to see. Canada has had not one bank failure during the continuing US led recession. Iceland wakes up and sees the errors of its ways. China, with a much different political and economic model, one which metes out harsh punishments but nevertheless is concerned about its emerging middle class, continues to surge ahead. Europe, which is fundamentally middle class oriented, has not suffered the joblessness of the US due to direct government intervention. The emerging BRIC contries are rejecting World Bank imprecations to privatize every aspect of their economies and are organizing in such a way as to prevent transnational corporations from exploiting their resources and instead are nationalizing and profiting from the sale of their resources in order to directly help their middle and poor classes.
So while America continues to transfer wealth from the middle class to the rich via a transfer of foreclosed middle class homes to the investor class among other means, the rest of the world gets it. Unregulated laissez faire capitalism leads to plutocracy and plutonomy.