There’s good news and bad news in David J. Lynch’s Bloomberg Businessweek article about the role of new machines in displacing workers from jobs in the American economy.
The good news? Lynch dispels the Luddite notion that we should blame machines for the nation’s current unemployment woes. The bad news?
So if machines aren’t responsible for the dearth of jobs, what is? Simple: lack of demand. Industry is using less of its productive capacity today than it did at the low point of the 1990-91 recession, according to the Federal Reserve. “We need a new source of demand,” says MIT’s Autor. “If people aren’t buying stuff, then no one’s hiring workers.”
Lack of demand? Perhaps Mr. Lynch would benefit from a review of this short clip from Mount Olive College economist Paul Cwik, who’s describing the basic tenets of Say’s Law.
