There is insufficient attention to the true human and societal toll of a massive, sustained unemployment wave like the one we have seen in this recession. This has happened twice in my career, the firs time in the manufacturing sector in 1983-84. This time it is broad-based. In both cases, there was a large sector of older, low to moderately skilled workers, who were simply “flushed” out of the ranks of the employed and remain unemployed, underemployed or marginally employed for the rest of their lives.
If you think of what our public policy has been the past 30 years, it has oriented toward free trade, decline of unions and deregulation of the financial system. The decline of unions, combined with the capacity of transnational manufacturing corporations, has led to a steady flow of manufacturing facilities and jobs to Mexico, South America and Asia. The benefit, which is the greater affordability of goods, does not seem to have made up for the “Hollowing Out” of the American manufacturing sector and e loss of millions of high-paying skilled and semi-skilled jobs. The 1983-84 recession saw a large reduction of these jobs which never returned. This trend continued with increasing free trade agreements with countries with little or no environmental, labor or even political rights, so there was never a level playing field on which domestic manufacturers could compete. This trend continues with high tech manufacturing today with examples like FoxComm operating huge facilities in China, Brazil and Eastern Europe for manufacturing of technological devices. The “Giant “Flushing “Sound ” Ross Perot warned of not only occurred – it has continued ongoing like Niagara Falls.
Now the ideology of deregulation has taken hold in the financial markets. The system instituted after the last global disaster in 1929-32 worked so well it provided the basis for the development of the richest, largest economy in human history and the so social, labor, political and civil rights programs insured this wealth benefits were distributed broadly. Now, the investor class has gained such a stranglehold on the political system that it is incapable of simply reinstituting the simple program that worded so well to create the wealth of the nation. As the recent JP Morgan events demonstrate, these institutions will continue to take risks with public markets, privatize the profits, and socialize the losses through taxpayer bailouts.
We are on the verge of creating a plutocracy in our country, like a Latin American “Banana Republic”, except larger, dominated by a wealthy elite, a marginally employed broad working class, an increasing impoverished class, and our educated youth struggling to gain access to the ranks of the professions.
And Mitt Romney, even more than George Bush, with his jingoistic foreign policy, is a poster boy for this vision of America. When I think about this, I can barely believe it is happening in my lifetime.