Nobody Understand What Creates Jobs And It's Destroying America

".... but because it misunderstands how unemployment works (not a skills mismatch, a problem of regulation and aggregate demand) and how education works (not human capital, signal), it has created an economy?and worse, a society?which is increasingly dislocating."? - Pascal-Emmanuel Gobry

Oregon has ambitious goals to create a knowledge economy by increasing education levels ? such as its aspirational ?40-40-20? graduation goals. I am skeptical of these goals on a number of levels. Pascal-Emmanual Gobry captures some of my concerns in his Forbes article ?Nobody Understand What Creates Jobs And It?s Destroying America.? From that article about the imaginary country of Dilbertia (here):

Because Dilbertia wants to build a knowledge economy and have lots and lots of innovation, what matters to Young Dilbertians is getting a mind-numbing, soul-sucking, eminently-outsourcable-in-the-internet-era-whoops, low-level white-collar job. Meanwhile, the trades, where jobs are stable, lucrative and impossible to outsource, are ignored by talented pupils and scream for competent employees, while Dilbertians with only a high school education keep sliding economically. Because Dilbertia must build a knowledge economy with innovation, politicians come up with ideas like ?50% of people should go to college? and gigantic boondoggle programs to subsidize college for the middle class, leading to an explosion in the cost of college and a bubble, making it harder to go to college for those for whom that would actually be a good idea. Because the economy is about ?knowledge?, the answer to unemployment is ?skills? and across the political spectrum everyone agrees the government should spend zillions on ?training programs? despite overwhelming evidence they don?t work.

And:

Because Dilbertian middle class families have been told that, in a world of the giant sucking sound of jobs to Workshopia, the only way their kid can escape unemployment is getting a college degree, half of the country is engaged in an extremely wasteful arms race to send their children to terrible schools for four years while the other half of the country increasingly accepts its status as a permanent underclass. The college arms race only increases the cost of college which only increases the stakes of the arms race and so on ad infinitum. In a self-fulfilling prophecy, because anyone who?s halfway smart/not poor goes to college, college graduates enjoy a wage premium which seems to ?prove? the case that a college education is the only ticket to the middle class. School pupils spend their time practicing mind-numbing, useless standardized tests and no more time in shop class which is the true gateway to jobs of the 21st century and a broad-based middle class economy.

And:

Dilbertia is a very rich and very prosperous place, but because it misunderstands how unemployment works (not a skills mismatch, a problem of regulation and aggregate demand) and how education works (not human capital, signal), it has created an economy?and worse, a society?which is increasingly dislocating.

Source: http://daveporter.typepad.com/global_strategies/2012/10/nobody-understand-what-creates-jobs-and-its-destroying-america.html

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