In the USA, we believe the consumer is king! Our economic engine. What would happen if fewer folks made less money (as a percent of the population)... I wonder?
From 1963 to 2000, more and more of the US population sought work through a recession and then that trend peaked and declined as did the percent of the population employed. After 2000, did the declines begin to reduce or increase demand (supply side theory aggressively promoted 2000-2008)? Decrease, of course, and what about all those Babyboomers entering retirement. Plus, folks tried to create cash to hold on from home value appreciation and refinancing, drawing out cash to maintain lifestyle, then home prices crashed. Could we correct?
From about 1995, activity based management techniques were widely taught and accepted in the US (optimizing assets employed), which continued to increase productivity per employee, cut excess labor and streamlined processes: methodical, revolutionary, very profitable, even more popular, ruthless. Why? We finally had accurate data, data but perhaps not judgment about what was best for the community. So when demand dropped, to maintain profitability (lean theory), cut, cut, cut ... could we then correct?
Norton and Kaplan were the leading proponents, accountants not community builders, and there is an age old rule of thumb (1300s): Don't let Congressmen, lawyers or accountants dictate how you run your business. Here the lawyers and accountants were not the culprits nor those who squeezed slack out of processes, because these are such elegant, rational approaches and the rage.
Hence, when demand dropped at the beginning of the Great Recession, more folks were let go and there is now substantial slack in the US economy. We cannot trigger new growth from consumer demand, not the process optimizers or accountants fault ... they excel at what they do. Cut, cut, cut ...
It will take a long time until business feels the requirement to hire aggressively. No one can fix that.
My graduate economics professors (from the WWII generation) warned about "sub-optimization," where the use of optimization techniques to maximize profit leads to unexpected results (e.g. decision based on Excel spreadsheet models rather than a comprehensive, mature understanding of the market), so shame on you Norton and Kaplan or did we all make a mistake? We all did. What did we learn from our parents (N&K are my contemporaries) who built the Greatest Nation on Earth?
Apparently, not much. "Where'd you go Joe DiMaggio, ..."