I have to laugh whenever I see a new news item from the White House trying to convince people that the economy is stronger than ever. How are you supposed to convince and individual that things are great when consumer confidence is in the dumps? Is a press conference supposed to make the single mom working two dead end jobs feel better about her economic situation?

In fact, the White House has it right in many ways ... the economy is doing well, but why are so many people feeling like the economy has left them behind? Personally, I think that politicians' understanding of the economy is pathetic at best. If they truly understood how we could have such a great economy and yet so many more individuals feeling poorly about their future prospects (this is the first generation of Americans that is going to have a worse standard of living than their parents, after all), maybe they would be smarter about what needs to be done in this country.

So how the hell did we get here? The key is risk.

The Age of Corporate Risk

Go back 50 years ago. What was your employment situation? For many, you entered into a social contract with your employer. You would work for them for your career and in turn they would take care of you – a good job, health care, benefits, insurance and a pension when you retired. Your personal risk? Very little.

With companies making fat profits with little competition, both inside the US and ourside the US, there was an excess of wealth to go after employees. Companies could afford to take on these risks in order to attract employees, and if you looked at it, it was a pretty sweet deal in a lot of ways ... sure, you had to conform out the wazoo, but hey, you're being taken care of for life. Not too shabby.

The Quickening of the Business Cycle

Point your finger at globalization, computers, poor business decisions, etc, but the golden industrial era of the 50's and 60's started to die. The business cycle was rapidly becoming compressed as companies had to compete for business from new threats, sometimes threats that hadn't even existed a few years before. Companies also became more beholden to making profits for their shareholders as business information became more available (remember those neato Bloomberg terminals in the library?)

As a consequence, they had to shed costs. Downsizing, the shifting of pensions to 401(k)s, etc. Basically, businesses could no longer afford to subsidize the risk of their employees, so they left it up to the employees to sink or swim.

What does that mean to the individual employee? Health care? Premiums out the wazoo. A pension? Hah! Instead you get a 401(k) ... if you lose money, tough luck. Benefits? Good luck buddy. You might get them ... if you're able to stick around long enough for them to be come available to you. But then again, you might get laid off before then.

Basically, one of the consequences of businesses becoming more competitive was that a massive amount of risk was transferred from companies to the average American citizen. You screw up, well, that's your own damned fault.

The Age of Personal Risk

Not everything about having more risk is bad. It allows you more freedom to make your own choices (more risk more reward). It's what allows two geeks to create a company and, one year later, sell it for $1.65 billion.

However, people are also operating now without a safety net. No health care, no retirement, nothing to take care of them if even one thing goes wrong.

When you add up the net effects of all of these successes and all of these failures, sure, the economy is stronger ... more people are taking bigger risks and reaping bigger rewards but it's also leaving many people hurting, and those without the skillset to survive in this environment are doomed to low paying jobs with no upside.

Just look at the high growth jobs. Many of them are service-type jobs (cook, being one of them). It makes sense, though. As more people are taking these risks and spending more and more of their time on work, the less time they have to take care of the more mundane things and so you have service class rising up to meet those needs, be it a restaurant dinner or you need your dog walked. It's great that a lot of jobs are being created, but there's no upward mobility and to stay competitive these jobs can't offer health care, can't offer benefits. Basically they just barely offer a living wage, if that. You're flying on your own and if one thing screws up, be it a car accident, a sick child, a lost paycheck, you're in deep trouble.

Having more personal risk allows the overall economy to do better, but in this economy it also makes for more losers than winners, losers that have nowhere to turn when things are said and done.

What Are Our Political Solutions

I grew up in a Republican household, was a business major, and honestly, I'm sometimes surprised at just how liberal my ideas have become. But you can't ignore that without the business world to provide a social safety net, the government needs to step in. How?

• National health care - we'd get more bang for the buck if we were taking care of people with a national health care system that focused on preventative care. People in service class jobs with no health care are often one illness away from losing their jobs. That's not acceptable.
• A solvent social security system - there's many ways to do this, but privatization isn't one of them. Raise the retirement age (we're living a helluva lot longer now and many people work far longer), reduce benefits for people that already get other forms of income, etc.
• Assistance for the working class - this comes in all sorts of forms, be it subsidized day care (to prevent having to make the choice between taking care of a child and going to a job), better metropolitan transportation systems, etc. Anything that assists the working class will leave us all better off.
• Focus on developing businesses that can take advantage of the landscape – politicans need to abandon the notion that we're going to get back all of those manufacturing jobs. They're gone. They can be done better and cheaper overseas. Instead, you need to focus on things that you can compete on in the global economy – location, location, location. You're never going to be able to outsource a job that requires proximity to the customer and face to face contact. So increase small business loans, add tax credits for people that want to start up their own businesses. If you take away some of the risk there, you can bet that many more people will try and do well.

In the end, we're going to have to end up taking care of each other in one form or another. If we don't provide a social safety net, we're going to be met which much higher costs down the line, be it in unpaid medical bills, bailing out the uninsured, paying more social security benefits , etc. Asking the individual citizens to bear much of the risk is why there is a widening income gap between rich and poor, why people are having declining living standards. It's cheaper to provide a safety net rather than pay for the consequences (and besides, it's the right thing to do).