Thursday, May 19, 2016

Job Dependency

When did it become the norm for candidates to promise to "create jobs"?

Today a lot of people can't remember a time when government was the public sector and the business was the private sector - and rarely the twain would meet.   For most folks today under 50, the idea that the President or the government should do everything in its power to "create jobs" and act as steward of the economy is the norm.

Why is this and when did it start?

Well, to be sure, the Great Depression did start the whole ball rolling.   Roosevelt started the WPA and a whole host of other programs (many later found to be unconstitutional) with the idea of getting the economy rolling again and putting people back to work.    Of course, government spending, in the form of World War II really put the economy back on its feet, although by that time, the economy had largely recovered organically.

After the war, though, the idea that the government should manage the economy and create employment sort of fell from favor.   After all, that was the snake-oil the Communists were selling, and in that era, you didn't want to be accused of being a "Red".

Things started to go off the rails in the 1970's.   Richard Nixon, when he wasn't being distracted by Watergate, tried to control rampant inflation with "wage and price controls" in phases.   It seems odd today that a Republican President would attempt to use command economy tactics, but then again, what it means to be a Republican then is different than today.   For example, Nixon was the one who opened the door to China.   Today, Trump wants to close it.   Same party, different philosophies.

By the end of the 1970's, stag-flation was in full bloom.   High wages for union employees, coupled with high energy costs, meant that everything cost a fortune, and people started buying less.   You may not recall this, but there were shortages of gasoline, coffee, and peanut butter (!!) at the time.   The latter came about not because of a real shortage, but because we were all so poor we resorted to what was once a cheap staple item to live on, and demand shot up (as did price).

From then on, if you wanted to get elected, you had to promise to "fix the economy" and "create jobs".   Once again, Republicans found themselves in the position of contradicting one of their fundamental tenets - that the government should take a hands-off approach to the economy and business.  Instead, you had to promise "programs" that would create employment and prime the economy.   Since then, it is the fixture of every Presidential campaign.

Why the paranoia about jobs?   Well, at the time, people were losing their jobs.   A lot of manufacturing jobs went overseas and never came back.   Of course, new jobs were created.   There were no "IT guys" back in 1979, but there are millions today.   New industries, such as the wireless business, were created, and new jobs in new technologies emerged.   This was little consolation to the guy who made a living pounding steel in a forge plant - he wasn't about to configure servers for a living.

Recently, Hillary made headlines when she said that she would like to see big coal go out of business - replaced, of course, by the newer and cleaner energy businesses of solar, wind, and other renewable resources.   Despite this comment, she still won the Kentucky primary.   Pundits thought that people would be outraged by this, and indeed some were.   But I thought to myself, "Does anyone really enjoy working in a coal mine?"   I mean, do people say, "Gee, I love working a mile underground in the dark where it is all dusty and nasty and at any time I could die in a cave-in, flood, or explosion, or just slowly linger over black lung in my declining years!" - really?

I doubt it.   I am sure that most coal miners would rather work above-ground in a wind or solar farm - but lack the skills to work there - so they are stuck.  And the mine owners don't want to see their investment go away, even if what is good for them is bad for America and the environment.

In a way, it is like Edison and his DC current.   Edison set up DC generating stations and sold them to local utility companies.  These companies didn't have the capital to pay him, so they gave him stock (where do you think "Consolidated Edison" came from?).   Thus, he owned a lot of stock in a lot of utility companies and was dependent on their success.   If they failed, he would be ruined.

Westinghouse put DC power out of business.   This put a lot of people out of work, but created far more jobs in the long run.

So it is no surprise that he lead a campaign to discredit Westinghouse and AC current - even though the technology was clearly superior and would win the day eventually.   He spread rumors and lies that AC power was "dangerous" compared to DC, which really wasn't the case.   While his tactics did delay the entry of AC power, it did not stop it.
Nothing is as powerful as an idea whose time has come. --Victor Hugo.
Similarly, a dozen years ago, if you told me that electric cars, solar power, and wind farms were the wave of the future, I would have said you were a hippie dreamer.   But in recent years, there has been a pronounced technological shift.  Lithium-Ion batteries solved the "battery problem" with electric cars (and newer versions will go even further).   Cheap solar panels from China are making the payback with solar more effective - putting it on a par with more "traditional" power sources.  And those same Lithium-Ion batteries might solve the problem of "what happens when the sun doesn't shine?"   Elon Musk is the new Edison - or Westinghouse, or Tesla or whatever.   Hence the name of the car.

But people are still afraid of change.   If people go to electric cars, what will Exxon do?   On a local level, what will the guy at the service station do if everyone is plugging in at home or at charging stations on the street?   What about my job?

This gets us back to the point of this post (Once again, I digress!) and that is why people are so paranoid about "jobs" in the last few decades.   In 1979, it was because folks were losing them regularly.   Today, it is about debt.    People buy a lot of crap, because the banks are willing to loan on easy terms.   And many Americans - if not most - live "paycheck to paycheck" with their six-figure salary barely covering the payments on all of their debts.    One of these debt-slaves (Bernie Sanders) is actually running for President - blaming all of his personal problems, as well as those of a nation, on "The Big Banks".

And I have talked about this before,  Specifically, "paycheck-to-paycheck" people who mortgage their lives to the hilt so they can have monster trucks, jet skis and tattoos, but are vulnerable at work.  When the boss says, "dump that toxic waste in some third world country" they can't afford to day "No, I won't that.   I don't need a job that badly.  I quit and I'm blowing the whistle on this!"

Instead, they say, "Yes sir!" because they need that paycheck to "survive" or so they think.

So our debt generation becomes a subservient generation, willing to do anything at all to keep a job and willing to vote for whoever promises to "create jobs."

When people are struggling and there is no work to be found - as was the case in 1929 and 1979, one can understand this subservient attitude.   Oddly enough, one popular hit song in 1979 was "Take this job and shove it!" which was an anthem to these job-subservient people, who could sing along and fantasize about living in a world where they actually would be financially independent.

In 2009 we had another recession.   But people weren't selling apples on the sidewalk or waiting in line to buy gas on even or odd days.   Rather folks took to the streets (and the internet) to decry the loss of their "things" or the cost of the horrendous debts they racked up.   The Joads weren't being forced off the farm, but the Jones' were losing their mini-mansion in Foreclosure Mews Estates.   The dream of granite countertops and stainless steel appliances was being taken away and someone had to be at fault!

Similarly, young people were (and are) offered huge sums of money to go to college, and many took it.   Why struggle and scrimp and save to attend college when you can have a brand-new car?  And I am serious about this.  I know one young man who said he wants to go back to college for a graduate degree, not because he thinks he needs it, or because it will help him pay off his staggering undergraduate debt, but because college was more fun that "real life" and he could live large on more borrowed money and get another new car, because the one he bought as a freshman is already five years old!

This time around, it is different.   We are job-dependent not by necessity but by choice.    In the 1970's it was a struggle to make ends meet.   But if you were older, you had your house paid for so you didn't worry too much.   Today, people are at retirement age with hundreds of thousands of dollars in debt, and yes, Bernie Sanders is poster-boy for this mentality.    A lifetime of work, decades of six-figure salary, and nothing to show for it whatsoever but a mound of debt and an upside-down house.
This is the new norm, and when asked about it, people say, "Well, Bernie is like one of us!  He's just an average American!"

And sadly, the are correct.   A vast majority of people today are helplessly in debt, with no plan or no idea as to how to pay it off.   The idea of getting by with less stuff is alien to them.   They crowd debt sites with pleas for help - "How can I pay off this staggering debt, but of course, without actually changing any any of my habits or lifestyle?"

It is like the fat girl who wants to lose weight and is willing to try anything - anything that is, but eating less, exercising more and going hungry.

It is sad to me that we have created an entire generation of debt-slaves.   Sad enough!   But sadder still is that these folks see no alternative to having debt and believe that their debts were the fault of someone else.

Their lives will never change, so long as they believe this.   Someone else will always be calling the tune, and they will have to dance.