SHADES OF GREEN: Economic sustainability

Today I am going to discuss a matter that some of you will think comes out of left field. Today we’re not talking about the end of cheap energy or how to build a solar house, no: Here is a related issue in our mature economic society that is as much a sustainability issue as anything else.

The shortage of jobs and the rising debt is a big deal these days. Politicians are making hay railing about both, and there is real fear in the land. The reason this falls in the category of “sustainability” is that economic well-being is essential to our society, just as much as clean air, availability of energy, a healthy biosphere, any of that “green” stuff.

In this column I will lay out an underlying cause of lack of purchasing power, the increasing concentration of wealth in the hands of a few (read: the Disappearing Middle Class,) and overwhelming private and public debt. In the next column I will lay out a radical-sounding solution to all this.

We depend upon employment for income, hence the concerns about jobs. Obvious, isn’t it? Well, yes. Here’s the thing, though: Many jobs are going away, never to return. One cause of this is the hollowing out of our manufacturing base and the movement of jobs to low-wage places in the world. I’ve mentioned before that we are addicted, not only to oil, but to cheap goods made offshore. Nobody could resist the inexpensive shirts and TVs made in Asia, and now you can hardly buy many categories of consumer items still made in USA.

Yep, that will do it. Jobs going to Mexico, China … we all know the drill here.

However, there is another, more fundamental trend in the loss of jobs going on in much of the world, and it’s a long trend going back to the beginnings of the industrial revolution. It’s just this: With the invention of machinery and automatic processes, less and less is done by hand, or by people, at all. Mass labor for wages is just going away. Jeremy Rifkin wrote a book about this in 1995, “The End of Work.” His title, and the book itself were correct then and both are even more relevant now.

This really comes home to me as I watch “Modern Marvels” on the History Channel. Everything from Hostess Twinkies to car mufflers roar off the lines, and there is hardly a person present in the plants. Then, I make a call to order a prescription drug refill, and I’m talking to an automated system. No people there at all. I’m told even much of the drug dispensing is done automatically. Well, that’s nice. It works pretty well.

People don’t have to go nuts talking to customers on the phone all day. Modern marvels, indeed.

But here’s the thing: We depend upon jobs, work, for money, right? Our buying power depends on employment. All these automated systems, the robots that weld and paint cars, the systems that handle much of our business transactions, don’t buy cars, clothes, food, housing, vacations. Only people do that. But, as jobs, work, disappears, and along with it the power to buy things, where is the market for all the stuff being produced?

Our productivity is phenomenal. Cars, for instance: Just look at traffic or parking lots anywhere in Sheboygan County. Mostly decent, even opulent, new-ish vehicles. We’re drowning in cars! Yet more cars are trucked in here every day, and the industry is worried about the slow market for them. We don’t have a production problem; we have a demand problem.

In the world of disappearing work the response has been to run up debt, both public and personal debt.

Credit card debt has ballooned in the last 10 years. The bait-and-switch mortgage industry put people in homes they could not afford. If there is not enough income in the household to maintain our standard of living, well, “let’s get a home equity loan, honey.”

Another facet of the economic rat race has been to try to grow the economy, frantically. We’ll grow ourselves out of debt. But most growth for the last 10 or 15 years has been in the form of one bubble or another: The Silicon Valley Bubble. The Dotcom bubble. The housing bubble. Bubbles inevitably burst, and people wander around in a daze afterward.

Efforts to prop things up, provide stimulus, are essential in this ongoing crisis. However, because the money to do this is borrowed, and therefore expressed as debt, our debts continue to rise, making it a big political fear issue now.

What is going on here is that there is a gap between what is available to buy and the buying power of ordinary people. There is a problem with the money supply, in other words. What could be done about this? Where would money come from to redress the imbalance?

I will discuss this in my next column. Hint: The solution is fairly obvious and the reasoning behind it is sound, in my opinion, but the answer will also invoke incredulity of the “huh? what?” sort, and fierce opposition, too.