I finally found a logical and truthful explanation about our economy.
After WORLD WAR II we were the only ones left with a huge manufacturing base and we thrived, because we could buy raw materials and sell manufactured products back to the 3rd world. Two things messed this up:
1. As we learned to create higher levels of income, i.e. financial , Media, hi-tech, etc., and we were happy to let other countries take over the more menial jobs, and for the jobs we couldn’t outsource we hired “illegal” immigrants. This goes way back to the 50′s when we called them migrant workers. They followed the harvests. We where quite willing to let them do this–we didn’t want to bend over and pick the vegetables.
2. Increasing productivity means making more stuff with fewer people. Back in the 50′s we called it automation, and a favorite science fiction story was about a jobless society where the machines did all the work. Our businesses had no choice–they had to automate to survive. We’ve all seen videos of modern car plants where robot programmable arms do most of the work.
But we adjusted; we just started living on credit, and it was us, “the consumers,” who kept it going by consuming. This recession is the bill coming due.
This is not just a recession. It is a global economic realignment. We can expect unemployment to last for a long time, and the only way out is massive innovation. Even there we’ll be playing catch-up for a long time.