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GP8Oct: America's Biggest Export: Jobs TVing It. Somewhere back in the last century, the immensely talented black novelist James Baldwin penned some unnoticed, incidental essays that spoke to those bittersweet times. In one, he talked of meeting up with a friend in Harlem and asking what he was doing lately. The friend sadly shrugged, “I’m TVing it!” In short, he was unemployed and so was at home, glued to the tube, just trying to make the time go by. These days you don’t have to come from Harlem to be TVing it. All about the land, people have been tossed aside by global economics, finding themselves flipping burgers at fast food joints or listening to the panaceas of out-of-step national politicians. We catch a lot of guys on the golf course these days, armed with their Callaways and their cell phones, hoping to be called off the fairway onto the highway again. Unemployment is no longer discriminatory, since every large corporation, institution, and government body is trying to bring down headcounts. 6.1%. The unemployment stats for September are just in, and some leaders are prayerful that the jobless numbers have stabilized, with the out-of-work rate having come in at 6.1% for the second month in a row, based on a slight net gain in overall employment. But, for us, the 6.1% has more far-reaching implications. If that number does not drop under 6%, President Bush is probably, as the rude pundits are wont to say, toast. The temperature must register 5.9% and feel like it will drop further, or the long-rumbling volcano of underclass sentiments will finally erupt and send politicians from both parties into exile. Bush would probably be displaced by someone new, although none of the current 10 lackluster Democratic hopefuls will inherit the wind. We’ll surely see a darkhorse. As importantly, 6.1% tells us that this is no ordinary, run-of-the-mill, recession, all our economists to the contrary. As we suggested in our Annual Report on Annual Reports 2003 and our Global Province letter, “Rounding the World Then and Now” (13 August, 2003), the Fed’s rate cuts are not working because we have crossed over to a New Economy where companies and people have to take up abruptly different strategies to survive. Manufacturing and whole industries are disappearing, and the Old Economy is evaporating faster than you can say “Alan Greenspan.” In its publication “Current Issues in Economics and Finance,” the Federal Reserve Bank of New York (or two of its staffers) ask, “Has Structural Change Contributed to a Jobless Recovery” (Vol. 9, Number 8, August 2003). The answer, of course, is yes. There are “permanent shifts in the distribution of workers through the economy.” Lost jobs are not coming back in older industries: New employment is hesitantly arising in new businesses. Something along the same lines appears to have slowed the recovery from recession for Bush the Elder back in 1990-91. The authors of this article think some dust has to settle on all the structural change and more financing has to be forthcoming for riskier ventures in order for employment to rebound. All this must stem from a burst of business confidence that executives with their feet on the ground are not feeling. In other words, the jobs will be coming from whole new areas when greed replaces fear in the business psyche. That takes time. Blame India. Often you can only get a clear view of where you are by going to another mountain peak. In the case of our economy, that means going abroad. On 2 October 2003, Alan Kohler told us in the Sydney Morning Herald to “Blame India for the Jobless Recovery.” (See smh.com.au/articles/2003/10/01/1064988273910.html.) What’s happened to America is that we are not only exporting our manufacturing jobs to China but we are putting our knowledge-worker jobs all over the globe. “American Express has its fraud analytics department based in India…. JP Morgan has a team of research analysts in Mumbai…. McKinsey has a research center of 130 MBAS just outside Delhi…. Ford employs 1000 design engineers in India.” Complacently, we may have thought we were only sending grunt, blue collar work out of the States. But we’re outsourcing a huge volume of our white collar work to the world, which has retarded our recovery. “Employment in the U.S. services sector has remained unchanged over the past 21 months as the economy has recovered. Usually the services industry headcount has grown 5 per cent by this stage of the cycle.” Protectionism, Anyone? That all this will lead to a rise in protectionism against foreign goods and services is almost inevitable. Our policymakers have not figured out the endgame here. That is, they do not know how to keep Americans at work when they send jobs abroad, not only in manufacturing but in the digital occupations that are supposed to take up the slack. With modern broadband communications, it is even easier, if anything, to do knowledge work abroad than manufacturing. In fact, there will be a rethink of our liberal free trade policies anyway. As we view other less doctrinaire countries and the world of real politik, we learn that mercantilist protections for early stage industries may even be very good policy. The trick, of course, is to tear down the barriers once a new industry has really taken root. Protectionism for later stage industries (textiles and the like), however, leads to inefficiency and tremendous national economic weakness. More importantly, we will get jobs long term and become more economically competitive by totally rebuilding our antiquated, patchwork national infrastructure, almost all of which is out of date and structurally very weak. From electricity to air transport to education to healthcare, the systems are broke and are not oriented to the tasks of this century. Once we summon the political will and awareness to deal with the infrastructure dilemma, the question arises of how we pay for what we have to get done and how we architect entirely different systems. This, as we have discussed in our “Courtly Congressman: Amory Houghton, Jr.” (20 August 2003), will depend on the ascendance of middle-of-the-road consensus politics, an event that does not promise to come to pass anytime soon. We need a 180-degree turn in our economy and politics, because our next jobs will come from rebuilding America. Second Careers. Alan Kohler, the prescient Australian journalist, looks over his shoulder even as he talks about America’s loss of jobs in its knowledge economy. “Australia will become a nation of salespeople, waiters and—one sincerely hopes—journalists. The Mumbai Morning Herald, anyone.” Maybe our newspapers will be written overseas as well. In this global economy, anybody can become redundant. This is yet another argument for figuring out your second career. The first is that you may have been in the wrong role right along. (See our letter of 24 September 2003, “Big Beliefs Make Big Men”) Johnny Appleseed. We think both observations apply to R.W. Apple, onetime political correspondent and now sort of a travel foodwriter for The New York Times. To read an amusing account of his career and his transformation, see Calvin Trillin’s “Newshound,” The New Yorker, September 29, 2003, pp. 70-81. You may discover there that he finally lost the thrill of the news chase in official Washington, but that he, a man of girth, has enlarged his taste for food and wine. He’s now said to have the best job at the Times, following his whimsy about the world. We ourselves have not read Apple in recent years for his political insight. But, on “mangosteens,” it’s another matter altogether. See “Forbidden Fruit: Something about a Mangosteen,” September 24, 2003, pp. 1 and 5. Here Apple is in a class by himself. We had never heard of mangosteens, a tropical fruit from Thailand, which Apple and others claim to be a delectable without parallel. His account is definitive. Apple, we think, has found himself, not as a political observer, but as a cosmopolitan explorer of quality tastes around the globe. In this way, he is helping to re-invent the Times, which still has to become something other than the newspaper of record, a job that is much better done by the Internet and C-Span anyway. We all have to play our part in the global economy. At our best we are the most eclectic nation on earth, and this will have something to do with how we remain an economic and cultural force in the world. P.S. Times writer Louis Uchitelle has caught up with “A Missing Statistic: U.S. Jobs that Have Moved Overseas” (October 5, 2003, p.21). Estimates he cites claim that anywhere from 500,000 to 1,000,000 jobs have moved abroad in the last 2 to 3 years. However, he only mentions in passing the even more troubling fact: A small but significant fraction of that loss now arises in the service/knowledge trades. |
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