It tolls for thee

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I'm not done. To further insinuate that it is wise to exprt manufacturing of things that require less of an education than a BS is complete BS. Meredith, you might be interested to know that EVERY manufactured item can be made by someone who does not have a college education. The irony in your last post is that the items listed that we "keep" are all manufactured by people without such degrees.

To insinuate that the service industry is sustainable without the production industry in this climate is absurd. For starters, our service industry was built on, and around the production industry. More to the point, if a nation or any entity can take away anothers manufacturing infrastructure through artificially depressed labor cost, then what is to prohibit that entity from applying the same principle to the industry whos commodity IS the labor?

Your local doctor is next on the list. Digital medical records is all about reducing the COST of healthcare, and that ain't the cost to you or me - that means your $475,000 a year, airplane-buying, radiologist now gets to make $475 a week on unemployment thanks to $20k a year "docs" in Bengaluru. Your database admin is easily replaced in Vietnam, the next frontier for cheap labor as China and India inflate their wages

The assertion that we have gutted our economy is hard to support: manufacturing is simply a fabrication service. I make the point that we are wise to export manufacturing jobs that don''t require higher education, such as, for instance, Daquiri umbrellas (the little paper and stick things that go in drinks). This also applies to shoes, dinnerware, and even washing machines. What we keep are the cars, aircraft, CAT scanners, and other high tech stuff that Neanderthals would never make and never sell even if they tried. The service economy is still doing relatively well, unless you''re in finance. The jobs being lost are cars, appliances, furniture, and home building, which are not traditionally considered ''service''. We''re also losing a lot of retail jobs, often in stores that should have never opened in the first place. Teachers, cops, doctors, pilots, database administrators, truck drivers, and utility linemen (or women) are still fully employed.

Meredith, the previous comment was to Andy, as I don't think all data centers are smoke and mirrors. But there is certainly a lot of "no there there" in the service economy.

P-o-t-e-m-k-i-n.

An interesting pair of time series to look at is the rate of increase of network techs and network administrators in comparison to the rate of increase of servers and networking infrastructure. The total IT workforce has ranged from 3 million+ to 4 million+ people since the early 1990s (Department of Labor, Bureau of Labor Statistics). The number of servers, in comparison, has expanded at least 10 to 1 (from several million to about 50 million at present). As people that manage retail stores and assemble automobiles and build houses notice that the PC techs still have jobs, it will occur to some fraction of them to get in on it, one way or another. Union types hate capital goods (i.e., machines that 'take union jobs') but there is a screaming shortfall of people to set up and maintain computing infrastructure. The gap between supply and demand is likely to get worse fast, due to the rapid adoption of embedded control technologies in areas that either had none at all, mechanical feedback systems, or relatively simple analog electronics. As work involves more abstration (system analysis, project management, etc.) the labor supply problem only gets worse.

So much for the rise of our service economy, set up a few years ago by Greg Mankiw and who said that outsourcing was a good thing for Amerika. We forgot one fundamental thing in our American academic brilliance - for a service ("parasitic" is a better word) economy to exist, you fundamentally service the makers of things, the worker bees, but the bees are dying off. We now have a waiter waiting on a waiter.