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Week in Review

Last Sunday we introduced the Big Five: a series of challenges that will make or break America’s in the 21st century. Of those Big Five, the most pressing and urgent issue to today’s economy is the jobs crisis, which we profiled in this week’s essay:

This is more than the problem of recovering from the last economic slump; it is more than the impact of globalization and automation on manufacturing jobs. The American economy is shedding jobs, especially long-term, well-paying jobs with good benefits, and the jobs that replace them are often less secure and less well paid. The relentless transformation of the American labor market is changing the nature of American life, calling into question some of the basic assumptions and building blocks of the last fifty years, and generating a complex mix of political and social pressures that will shake the country to its foundations.

Essentially, the problem is this: automation and IT are moving routine processing, whether what’s being processed is information or matter, out of the realm of human work and into the realm of machines. Factory floors are increasingly automated places where fewer and fewer human beings are needed to transform raw materials into finished products; clerical work and many forms of mass employment in business, government and management are also increasingly performed more economically by computers than by trained human beings.

In Asia this week, China and India finally ended their weeks-long standoff along the border in the Himalayas, Japan decided against whitewashing its WWII record, and North Korea decided to move its long-range missiles off of their launchpads.  In India, Rahul Gandhi’s Congress Party won big in regional elections, while across the border, Pakistan prepared for a general election of its own, in which terrorists and hate-mongers appeared on the ballot. All this despite a campaign of violence and a high-profile kidnapping by terrorist groups like the Pakistani Taliban.

Much of the coverage of the Middle East focused on the ongoing mess in Syria and the US-Russia meeting. Early signs are not good, as Israel and Turkey acted to scuttle the plans, while Russia kicked dirt in America’s face by shipping missiles to the Assad regime.  In addition, much attention has been focused on “BenghaziGate“, which even the NYT admits might be a real scandal. Indeed, the MSM as a whole has been cooling on Obama’s Middle East policy since the beginning of his second term.

Europe was relatively quiet this week. In Russia, Putin made an example of unfriendly polling firms and dissatisfied French people are leaving the country for opportunities elsewhere. Meanwhile, Europeans in both Italy and Germany are beginning to see the EU as a handicap for their countries.

At home we had more bad news on pensions. Denver has just spent nearly a quarter billion after gambling and losing in the Wall Street casino in an attempt to make up a pension shortfall. Meanwhile, cities in New York are courting disaster, underfunding their pension funds now to pay for services, setting themselves up for similar troubles in the future. The SEC has made it harder for struggling cities to raise money in the bond market by charging Harrisburg with fraud. Meanwhile, New York City continued its war on food trucks, US disability rolls surpassed the entire population of Greece, and retirees were warned against blue states.

On education, we saw early signs that college costs may finally be peaking as students become more price sensitive, although this will spell trouble for schools that invested heavily on state-of-the art facilities. Elsewhere, one Florida university is eliminating tenure for its employees, while new college-alternative programs are attempting to bring back the apprenticeship model. And in the background, law schools are continuing their rapid decline.

On the environment, the Department of Energy is preparing to release new guidelines on fracking, US oil production is quickly catching up to imports, and Obama spoke in favor of natural gas exports. It was a good week for Tesla, which has just recorded a profit for the first time, but a bad week for other green programs, which are going belly-up left and right. The situation in solar power was particularly ugly, as one prominent solar panel installer sued the US for more money while disputes about solar subsidies threatened a trade war between Europe and China. Meanwhile, the latest global talks on climate change ended with nothing accomplished, not that anyone was paying attention.

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  • Luke Lea

    Jobs are always a problem in any recession.

    The real problem for the next generation and the one after that is the problem of wages for the bottom four-fifths of the working population. Trade, immigration, and automation are all driving their real wages down, to which I suppose we should add the spiraling costs of healthcare for which they get too little in return. Unless we address all four of these factors the ideal of a middle-class democracy is bound to erode.

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