Some of the major technological marvel of today’s world are not doing much to create new jobs. They’ll bring big gains but without putting too many people back to work, IT specialists of the right kind excluded.
The internet is wonderful, but it’s not saving the revenue-generating sector of the economy.
The forward march of technology has indeed continued, but it’s giving us Twitter and better painkillers and some life extension when we are old and sick. And I love Twitter and I’ll probably value those painkillers, too, once I need them. We’re living the age-old wish of getting away from money, money, money and finding some of our biggest innovative successes in sectors that are good for us but not revenue intensive. We’re getting away from materialism, at least in some critical regards. We may still lust after the fancy car, but I see a lot of people looking inward. They are taking lower-paying but more interesting jobs, which offer a greater sense of challenge and control. I see a lot of well-off people cruising the Web, and cherishing their Twitter feed, rather than shopping for diamonds.
The funny thing is, getting away from materialism on such a large scale- whatever the virtues of that switch- really, really hurts. It is the hurt that we in America are living right now.
I have often wondered what happens when all those people at the malls of America realize that they do not need most of the expensive stuff they have been buying. (Of course MY stuff is another thing altogether.) Our economy is not just about realizing that we built too many houses we do not need; our credit contraction is about realizing we do not need a bunch of other stuff. As Tyler Cowen writes, the core of the financial collapse is that we were not as rich as we thought we were.
As the consumer faces that reality he cuts back and changes his habits. The government would be wise to do the same.
Whether the means is to increase government spending or to cut taxes, if the objective is to stimulate a demand that was false to begin with then it will fail. We are trying to return to a normal that was never normal at all.
An economy and a government that is built on revenue growth is extremely threatened by a reduction in materialism.