July 6, 2009
-- by Dave Johnson
There aren't jobs, and they aren't coming back. We need to figure out another business model for the economy. Jobs were about putting parts into a gizmo as it went past you on the line. Machines do that now. Jobs were about adding up the numbers in a column. Computers do that now. Jobs were about pumping gas or checking out items in the supermarket. Self-serve does that now.
The problem with our model was that a few people at the top got the profits from finding ways to disemploy people, but not the disemployed people. They just got thrown overboard. But this economy depends on people having income from jobs.
We became very efficient at disemploying people, but all we did was throw those people away and pass everything to a few at the top. So now the base of "consumers' has shrunk below the point where the economic model works anymore.
So now what?
Posted by Dave Johnson at July 6, 2009 9:24 AM
Let's take the extreme case: everything is made by machines and one super-rich person owns them all. Now, who's going to buy the stuff? Answer: nobody. Mr. Rich isn't rich since nobody has any income to buy his products.
In the less extreme case, you have lots of people in unproductive service jobs that need more income than the lowest wage the market will bear in order to afford the products of the more productive economy. We could subsidize them by taxing the wealthy, or how about an ownership stake in USA Inc.? Give them a piece of the income from "the machine."
Rich people hate welfare, but they don't seem to have any objection to free money when it comes via an inheritance. I propose we form a sovereign wealth fund for all Americans, shares of which can't be sold but are passed to their heirs and which accumulate over the generations. The income can be spent, but not the principal. There should be a ceiling on how much a rich person can inherit, say 100 times the median income, and the rest is taxed at 100% and added to the common fund. Over time, we'd all become owners of the economy's productive capacity and entitled to a slice of the income produced and thus able to afford its products.
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