Where have all the jobs gone?

One explanation may be that capital investment has become, to put it politely, more “labor saving.” Yes, this process has been going on forever, but robotics and other ways of automating tasks may be accelerating it.

Second, our large and persistent trade deficits have exported too much demand. There’s nothing wrong, and a lot right, with increased global trade. The problem comes when it stays out of balance for so long, as it has in America, with trade deficits averaging 5 percent of G.D.P. in the 2000s, compared with 1 percent in the 1990s. That’s millions of net jobs lost.

Third, a growing number of economists believe that our very high levels of inequality are not just whacking the incomes of the “have-nots” but are slowing job growth as well. Part of this works through the demand channel: with so much spending power in the hands of so few, consumer demand is becoming bifurcated. Walmart will do well on one end, Neiman Marcus on the other, with too little in between. Another part works through misallocation: too much economic activity devoted to “innovative” finance and too little to sectors more germane to middle-class jobs and incomes.

What would it take to reverse these trends? For one thing, in the near term, do no harm. Austerity, including sequestration, is the economic version of medieval leeching.