[BITList] Permanently High Unemployment

[x50type at cox.net]

reiterating what we have already come to terms with – but our politicians must continue to dream the dream.
ct

From: Ronald L Sutton 
Sent: Tuesday, October 11, 2011 4:46 PM
To: Colin 
Subject: Bill Bonner 10/11


     

     
      Bill Bonner 
      Permanently High Unemployment 

     
           
            Bill Bonner 
      Reckoning from London, England...

      Little by little, one step at a time, the mainstream press is beginning to understand. There was no ordinary recession. There will be no ordinary recovery. And something is very wrong.

      A Great Depression? We should be so lucky, writes David Leonhardt in The New York Times:


        UNDERNEATH the misery of the Great Depression, the United States economy was quietly making enormous strides during the 1930s. Television and nylon stockings were invented. Refrigerators and washing machines turned into mass-market products. Railroads became faster and roads smoother and wider. As the economic historian Alexander J. Field has said, the 1930s constituted “the most technologically progressive decade of the century.” 
      The 1930s was a tough time to earn a living. But great things were happening. Much of the technology that would later become ubiquitous...and which would power the post-WWII consumer boom...was developed in the ’30s. But what new technology is coming along now? Do you see anything that will later cause a boom? We don’t. Leonhardt continues:

        ‘Wait a minute, 
        But while some economies emerge...others submerge. Some go up. Some go down. And the working classes are bound to run into each other somewhere in the middle. How long will it be before an unskilled laborer in Tennessee earns about as much as an unskilled laborer in Turkey, Russia or Indonesia? We don’t know. 
        real genius of ‘Keynesian counter-cyclical stimulus spending.’ It created inflation, which lowered real wages...thus putting people back to work.

        It defrauded the innovation was the automated teller machine. 

        The common question with these industries is whether they are using resources that could do more economic good elsewhere. “The health care problem is very similar to the finance problem,” says Lawrence F. Katz, a Harvard economist, “in that incredibly talented people are wasting their talent on something that is essentially a zero-sum game.” 

        In the short term, finance, health care and housing provide jobs, as their lobbyists are quick to point out. But it is hard to see how the jobs of the future will spring from unnecessary back surgery and garden-variety arbitrage. They differ from the growth engines of the past, which delivered fundamental value — faster transportation or new knowledge — and let other industries then build off those advances. Of course, these were themes we were talking about 5 years ago. The finance industry was largely a scam...but so is education and health too. Trillions are invested, with no real payback.

        The same could be said for the US military. It’s the largest single capital consumer in the world. 

        In the 1930s America was developing new technologies and building new industries. Today, she is subsidizing her zombie industries of the past — and getting nothing from it.

        But at least the Pentagon is entertaining. It is like a huge football franchise with 300 million fans, every one of whom is forced to buy season tickets!

        Regards,

        Bill Bonner
        for The Daily Reckoning

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