It is clear that there is a bifurcation in the economy, a dichotomy if you will. On the one hand the Dow has hit 10,000. Whoopee! The economy is back on track. Or is it? There is still high and widespread unemployment. If anything, the Dow has an inverse relationship with employment. That is to say the more workers companies lay off, the more they reduce their expenses and the more Wall St cheers. According to Robert Reich: "Payrolls comprise 70 percent of most companies' costs, which means companies have been slashing jobs." Therefore, it's a good thing, from Wall St's point of view, to eliminate jobs. Just ask Chainsaw Al Dunlap. When he took over a company, the first thing he did was to "chainsaw" jobs. The jobs can be replaced by automation, computerization and robotization or by simply outsourcing the jobs to locales where labor is cheaper. The net result is that highly paid American workers are losing jobs that are never going to come back.
So Americans are being deluded that "jobs are a lagging indicator", that, if they're patient and wait long enough, their job or a job for them will magically reappear. The smart ones will create their own job. In fact this is the only way to guarantee oneself a job - create it yourself. How to do this should be part of everyone's survival kit. So why aren't they teaching it in schools? The whole educational system is set up in such a way that you earn credentials and degrees which are then sniffed over by your superiors (potential employers) and then you are granted access to the system based on your educational achievements. But it doesn't work that way any more. Employees are something to be minimized because they detract from the bottom line. It used to be thought that a good employee actually added to the bottom line, but not any more.
So where does this leave the job situation and how is one supposed to earn a living? The upper crust earns their living off of rents, dividends and interest or in other words off of the return to capital. After you accumulate a certain amount of capital, you can put your capital to work earning money so that you don't have to go to work to earn money. This is also called ownership. This is the fundamental rule of a capitalist society and one not taught in school. If you own things, you can rent them out. For all those who don't have sufficient assets to make money off of the return to capital, they are in the position of having to work for a living. But bad news on this front. There aren't sufficient jobs to go around. It used to be that the US was a nation of small self-sufficient farmers and craftsmen - yeomen, they were called. In other words prtactically everyone was self-employed. This was the kind of nation Thomas Jefferson envisioned. Then somewhere along the line we became a nation of landless job seekers. Not a good trade-off.
The educational system was supposed to be the key to getting a good job. Then the educational system started to ratchet up the requirements for getting a job: first a high school education, then a college education, then a Master's Degree, then a college education with a credential, then a PhD, then a post doc. It never ends! The educational system and the student loan creditors reap the profits while the poor job seeker goes further and further into debt. This is obviously not a winning strategy for the average American! That's why self-employment is the only sure way out of this morass. If you are self-employed, your job is secure. You can't be laid off unless you decide to lay yourself off. Self-employment is the answer to a jobless society. Localization of jobs is a way of returning to a nation of small farmers and craftsmen. That's why Farmers' Markets are gaining in popularity.
It's becoming more obvious that the US can't provide jobs for all its citizens. Government policy under Republican administrations has encouraged offshoring of jobs. Profits can be offshored to create jobs overseas, and those profits remain untaxed until they're repatriated. If they are invested overseas, they are never repatriated. GM is investing in automobile plants in China, and then those cars, in addition to being sold in China, will be imported to the US. Where does that leave US autoworkers? Without a job I'd say. Corporate America has no obligation to provide American workers, no matter how highly educated, with jobs. That part of the social contract (if it ever existed) is broken.
What is the government's role in this? That depends on which government we are talking about. A Bush-Cheney government is radically different from an Obama-Biden government. In Bush-Cheney world, essentially the neocon world, 20% of the American population will effectively be cut out of participation in the economic system. These would be the jobless, the homeless, the unpropertied, the poverty stricken. It's perfectly acceptable to Republicans to have 20% or even more of the population economically disenfranchised. The economy can hum along perfectly nicely without them. They are superfluous. The economy doesn't need their labor. So they are essentially in the position of becoming serfs except serfs actually had jobs. Labor was less machine intensive in those days. They were actually needed to make the economy hum. So this percentage of the American population will join the Third World poor. They will be the post-development poor, the post-advanced-industrial-society poor, the unneeded, the redundant, the jobless, the homeless. Third World societies hum along very nicely (for the rich) without them. Their only choice will be to join the military which is the only choice in the Third World. There will always be money for militarism, the only government program that seems to have universal support. The divide between the rich and the poor will grow to astronomical proportions. The US in a ghastly rapprochement with the rest of the world will harbor a segment of its society exactly identical to the Third World poor who make their living scrounging in garbage dumps.
Under Democratic administrations, the government will actually try to help the poor, the dispossessed and the jobless-homeless. Extended unemployment and welfare benefits and other job creation programs will alleviate the suffering at least for some people at least temporarily. But this will create problems in that the wealthy will not want to subsidize the poor with their tax money. The wealthy will use all tools at their disposal including buying off Congress to insure that the peonage class remains in poverty. They won't want to share their exclusive ownership of the means of production with the jobless and homeless. For the peonage class voting will be long forgotten. They won't have the emotional wherewithal to go out and vote much less to lobby Congress. Politically and economically powerless, they will acquiesce to living on the streets and in tent cities, eating meals provided by homeless shelters and other charities which are literally the scraps from the tables of the rich. With limited access to health care the homeless-jobless peons will live lives that are nasty, brutish and short especially under Republican administrations. This will verify Darwin's Survival of the Fittest dictum.
Inequality will reach new heights in this Brave New World, a two tier world in which the US will achieve a ghastly parity with the Third World in terms of its relative proportions of those living in total luxury beyond anyone's wildest imagination and those living in degradation and immiseration beyond anyone's wildest imagination. There will also be a small middle class consisting of indentured servants with tons of student loan, credit card loan, mortgage loan and auto loan debt.
