Whither

You hear talk about a "new normal" and how the world of the future isn't going to look like the world we became used to in the last 40 years or so where rampant consumerism was the rule. This is the world that really started during the period depicted on the AMC series "Mad Men" where the post WW2 dominance by America, the great number of children born and the seemingly endless expansion into the suburbs created a tremendous amount of wealth and prosperity.

This period seems to be over. We found places to build houses that had no reason to have houses, except to house the people building the houses. Further, the tremendous increase in the Western Standard of living led to a worldwide disequilibrium that will ultimately fix itself. Americans have no intrinsic right to be wealthier than anyone else. Yes the country has great resources and has been a bastion to capitalism, leading to some tremendous growth, but really, once we built the suburbs, the highways, the endless malls and saturated the automotive market, where is the next great expansion? Probably not here.

To some extent we are exporting the American way of life to the rest of the world. We see countries that were poor, such as China and India starting to become, if not wealth, less poor. This expansion has come, to some extent at the cost of American jobs, as cheaper labor and less stringent oversight makes it more economical to open factories or enter into partnerships with manufacturers and service providers there.

So what does it mean? Millions of American jobs are gone. Further, trillions of dollars of perceived wealth has vanished in the housing collapse. The people who have suffered the most from this are the factory workers and the construction workers. There is plenty of opportunities for American companies to sell and expand in the new markets. However, without the equity that was tapped so frequently over the last 20 years, Americans have less disposable income. Worse, a lot of the disposable income has become tied to Government payments in the form of unemployment, social security, welfare etc.

We are seeing the birth of a two class society, where those with certain skills will thrive and those without those skills will not. We have seen this before. In this country we saw great prosperity driven by the drive west and the settlement of our virgin farmlands. Then we saw the small family farms give way to a great expansion in industrialization. That period is ending, but of course just like we still have farms, we still have industry, its just not expanding like it once was. Where is the next expansion?

This is still unclear, although we have seen a tremendous shift to service jobs already. Unfortunately, many of the service jobs simply do not provide the level of income we have come to expect.