US Economy: False Diagnoses and False Solutions
by Helke Buchter, translated from the German in Die Zeit, August 2016
Hillary Clinton’s and Donald Trump’s economic plans are too simplistic. Innovations and ideas are lacking. Many people despair. American can only be great when it takes along the weak. Washington did not always ignore the middle. After the Great Depression, a series of rural development projects including the Tennessee Valley Authority built whole cities and not only dams and power supply systems. FDR’s New Deal built 165K public buildings.
The New Economy is suddenly here after a decade of delay. The digital economy has long been marked by its prominent representatives Apple, Google and Facebook that will ultimately replace the Old Economy. This change was announced so often since the Dotcom bubble burst that the actual change was nearly unnoticed. However, the signs are now immense. Online retailers – with Amazon leading the way – are taking down traditional department stores like Macy’s and the Wal-Mart supermarket chain. After 200 years, the past rivals Dupont and Dow Chemical hope to at least ward off the twilight of the former US industry icons. They can hardly prevent their twilight.
The new economy is completely changing the labor market. The discussion about the 1% vs. the 99% gives way to the Digital Divide. The creative technology elite profits from progress and simultaneously creates short-term jobs at low wages at the lower end for which the use of robots or computers would be too expensive or too awkward: cleaning, cooking, and nursing. Jobs in the middle become fewer. Thus an imbalance arises on the labor market that is much more threatening for the economy and society than the crassly unequal distribution of wealth and income.