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Job growth is worth the insecurity

http://www.jewishworldreview.com | (KRT) Phil Nolan felt life was over when the "jobless recovery" claimed his position as a Sears store manager.

The Los Angeles Times featured Nolan in a front-page story about the carnage an emerging global economy had wrought, especially on once-secure middle managers fired as firms sought to be competitive.

It was 1993, a "jobless recovery" had taken hold, and those who thought capitalism should not be left to its own devices were, as today, having a field day with proposals to let government make things better.

But a funny thing happened to Nolan, now 66, who had spent 38 years with Sears.

Nolan, like the economy, reinvented himself. These days both are doing quite nicely.

"I didn't think things would work out as well as they did. I was devastated, but we adjusted," Nolan, who runs his own convenience store in Ashfield, Mass., said recently. "Things have turned out quite well."

Nolan is a metaphor for the times, illustrating how ebbs and flows give Americans high living standards and lesser security than those in more government-controlled, but less-prosperous, economies.

Even after losing 2 million jobs since 2000, the U.S. economy has 18 million more than it did after the 1990s recession.

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Nolan's story teaches us to focus on the big picture these days. In 2004, software jobs "outsourced" to India have replaced laid-off middle managers as proof to some that the economy is going to pot.

But no reporter checked to see how Nolan fared during the historic prosperity of 1994-2000 that occurred precisely because the economy had dealt with the foreign challenge of the early `90s that many had forecast would be catastrophic.

When a major employer lays off 1,000 workers, there are front-page stories, but rarely are there mentions in newspapers when 100 small firms each hire 10 people.

The lesson is that, over time, the U.S. economy goes up and down. Each new cycle, however, brings higher living standards.

When Labor Secretary Robert Reich proclaimed that "jobless recovery" over in December 1993, the unemployment rate had dropped to 6.4 percent. Earlier this month, when record job growth led his successor to make a similar claim, the jobless figure was 5.7 percent. The recessions of the 1970s and 1980s featured even higher jobless rates than in the early `90s.

All that's worth remembering when John Kerry invokes the Great Depression as he tries to stir enough fear to make President Bush jobless.

Kerry's rhetoric reflects a fundamental misunderstanding of 21st-century capitalism.

After recent data showing the strongest job growth in four years, Kerry shifted his attack lines from the general economy to focus on the loss of manufacturing jobs.

If next month's economic numbers continue to improve, he'll certainly find some other statistic to convince those who want to believe the economy stinks.

But, it just ain't so.

Kerry is correct that the economy has lost a boatload of factory jobs.

But the idea that any politician, whether Kerry, Bush or George Washington, can change that situation except at the margins is just plain wrong.

Politicians can't stop the global economy's evolution. Wise ones know how to profit from change.

That's why Kerry's call to penalize companies moving jobs overseas will be ineffective, as was its 1980s feel-good counterpart, a law requiring factories to give advance notice before closing to protect manufacturing jobs.

The economy will be fine if politicians don't mess with it, but it won't be perfect. Some types of jobs are gone.

Capitalism's beauty is that it forces people to respond to change because of self-interest. That gives Americans an advantage over the rest of the world, which as of yet isn't willing to trade greater security for increased prosperity.

Yes, some - for the most part lesser-skilled - positions are going overseas. Many more, better-paying jobs are "insourced" from foreign firms. Reality dictates you can't have one without the other.

Change can't be stopped. It can be profited from if we, like Phil Nolan, accommodate it.

The Wall Street Journal reports that of the 20 occupations the government predicted in 1988 would suffer the greatest job losses by 2000, half actually saw employment growth because the firms saw change coming and dealt with it.

By comparison, the government had tabbed travel agents as a fast-growing field. Yet it could not foresee today's explosion of on-line self-booking, which has decimated the ranks of travel agents.

The economic environment inevitably changes. Those who prosper learn to adapt, rather than futilely trying to protect the jobs of the past.

It's not easy, but the rewards are worth it.

Besides, there really is no choice.<

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