Failed Micro Perspectives
07 January 2017 | Pago Pago, American Samoa
America has a BLS defined working age population of 203 million and, as the troublesome chart below indicates, we have about 94 million of those people not in the labor force. The relevant questions as to the chart are why so and why did the number fall so and not materially recover from the 2008-09 crash and recession. What is going on?
The response of micro-minded people to this chart vary and include:
1. the chart isn't current; it is a few years behind;
2. the chart can't be true with only 4-5% unemployment;
3. ignore that chart and look at this one or these instead;
4. the chart ignores demographic changes;
5. the economy is doing wonderfully; the chart has to be wrong;
6. the chart is silly--it implies 100% should be in the labor force;
And these are all people who pretend some knowledge of economics.
Then, there is much collateral evidence bearing on this chart. It includes --
1. Labor's share of national income has fallen and capital's has risen in like proportion;
2. Many American jobs have been and remain off-shored;
3. Robotics is beginning to replace labor at a greater rate;
4. The lower class and the bottom 2/3 to 3/4 of the middle class (the vast majority of the US population) are still largely in recession, with stagnant or declining real income and destroyed wealth positions;
5. The key economic problem of the age -- one historically without real precedent except in times of general recession or depression -- is deficient aggregate demand; and
6. We have had growing income inequality so the percentage of national income going to the top 3% has risen and that to the group I identify has stalled or fallen.
The micro-minds also deny or ignore this macro data as well, or quibble with it unsuccessfully, too.
For the macro-minded, all this evidence raises concerns because it points toward an inconvenient macro reality too few see well among the clutter, and none want to face or acknowledge. A reality that has serious implications for us all and portends big changes in social and economic policy ahead or social upheaval beyond Trump's rise.
It is what Silicon Valley TED talkers are now chillingly calling the huge "human surplus."