Don Peck at the Atlantic has noticed that employment is unlikely to recover to pre-great recession levels (let alone Clintonian levels) for a long, long time. This was totally predictable, and predicted. He also notes that even people like Paul Krugman really have no idea how to fix it.
Yes. Employment as a percentage of the workforce will not recover for a generation. And my bet is that median real income won’t either.
As for how you fix it, first you need to have a model for why it happened in the first place. I’m not going to give that model today (read Wealth and Democracy, by Kevin Phillips, he has a big chunk of it). Instead I’m going to say what needs to be done.
Because any economic growth right now increases the prices of oil, which then strangles the economy, you must reduce dependence on oil, or you can’t fix your problems.
Because banks aren’t lending, and because they are a net drag on the economy having destroyed more wealth than they created, you must break up the major banks or take other similiar actions to the same ends, or you don’t fix your problems.
Because defense spending is essentially un-productive you must end the American empire, cutting “defense” spending by at least half, and “intelligence” spending by three-quarters, or you don’t fix America.
Because education is the backbone of modern economies and good education is what allows democracies to work, as the founders understood, you must fix education, so that everyone who is qualified can get a degree without being burdened by a decade of debt and so that the the lower class is able to get through university again, or you don’t fix your problems.
For the same reasons you must fix education at the primary and secondary levels by removing it from the property tax base, or you don’t fix your problems.
Because oligopolies strangle innovation, produce inferior services and soak up oligopoly profits they haven’t earned break up your major oligopolies outside the banks, starting with the telecom companies, or you don’t fix your problems.
Because government is now a bidding operation in which monied interests buy the policies that are good for them and not for America you must fix campaign finance, or you don’t fix your problems.
Because a lopsided wealth and income distribution leads to deep social pathologies, reduction in real demand, short term risk taking and looting by the financial class and the destruction of functional democracy you must reinstitute steep progressive taxes on the 1950’s level, or you don’t fix your problems.
Because locking up more people per capita than any other nation in the world is massively economically inefficient and causes severe social pathologies you must break up the prison-industrial complex, or you don’t fix your problems.
Because police states are not efficient, and for the sake of your own souls, you must end the drug war and the paramilitarization of US police forces, or you don’t fix your problems.
Because real modern infrastructure is one of the keystones to economic growth and competitiveness you must build out proper transportation (high speed rail) and internet (cheap, un-metered high speed to every home) or you don’t fix your problems.
Because intellectual property laws are strangling rather than aiding innovation and are locking culture beind walls, you must reform reform your intellectual property laws, or you don’t fix your problems.
Because the US can’t afford to be wasting 6% of GDP, not insuring many of its people and getting awful results even for the insured, you must move to a rational form of comprehensive insurance like single payer, or you don’t fix your problems.
Because the US and many other countries in the world cannot flourish in a world trade system which allows massive trade and money flow deficits, the world trade system, and most especially the free movement of money needs to be heavily reformed, starting with a Tobin/Pigou tax which scales the cost of currency changes to carbon output, or you don’t fix your problems.
And, sadly, this is a partial list.
Which is to say, the problem in the US right now is that virtually nothing of any significance works. Not the military, who with 50% of the world military budget is being fought to a draw by ragtag militias, not the political system, and definitely not the economic system.
Fixing this, fixing America, is a literally monumental task, like building pyramids. It will take a generation, perhaps two, of very committed people.
I fear that those people don’t exist in large enough numbers, at least not in any position of power or able to seize power.
I hope Americans prove me wrong.