We see in today's news something I believe has been happening for many years, and continues ... under the surface, slowly but surely.  I call it erosion because it is not noticable or a "big bang" emergency but as we look around and ask where all the jobs went while concurrently trying to create bubbles on 5 year cycles to create work, the truth can be seen in countless press releases.

Here is an example of some news today with a technology company we have owned in the past - Blue Cost Systems (BCSI).  As I wrote this morning this increasingly flat world is great for capital, not so fun for labor.  Especially labor in high cost countries...(we can argue its a net positive for labor in low cost countries). Speculators are correctly driving up the stock 14% today as "costs are lowered" - sort of ironic because what is good for this company, if extrapolated over countless examples the past 2 decades and many more in the future - is harmful to the society as a whole.

•  Blue Coat Systems (BCSI) this morning said it will cut about 10% of its staff under a new restructuring plan. The company currently has a little under 1,500 employees.
• The company also said it will acquire S7 Software Solutions, a software R&D firm based in Bangalore, India, for about $5.25 million in cash. Blue Coat said it will shift some engineering positions from Sunnyvale (which is where the company is based and Austin, Texas to Bangalore and other locations. It is closing offices in Riga, Latvia; South Plainfield, New Jersey; and Zoetermeer, the Netherland.  (sorry good people of Latvia - looks like even you are too expensive to pay)

Sunnyvale, Austin, Zoetermeer, Riga: 0
Bangalore: 1

The question that needs to be asked is at what point can the government no longer borrow against future incomes to keep the balls juggled in the air.  As people lose income one by one, government steps into the void, borrowing money we do not have to keep the Ponzi economy going.  I suppose this can go on as long as we can print more money and hand it out in stimuli, and our generous lenders (many of which are taking the jobs) continue to hand us rope.

The gulf between the have and have nots continues to grow by the year, with the government furiously trying to bucket water out of the hull of the boat.  While telling us this is just a cyclical issue...