Paul Krugman’s latest column is Defining Prosperity Down.

And I worry that those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is “structural,” a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.

This is a valuable column as far as it goes.  In future columns I’d like to see him explain why the high unemployment does not have to be a “structural” part of our economy.

As I wrote to my friend ScottC, here is my argument as to why it does not have to be this way.

The media and so called economic pundits are all talking about how our economy is 70% based on consumption.  They are all trying to figure out when the American consumer is going to spend again like they did during the bubble.

Well that resumption ought not to happen if we consumers have any sense.  During the bubble people were treating the rising value of real-estate as a second income.  They kept refinancing and taking the added equity out as cash.

The second income stream died with the crash.  If the values start to rise again, I hope people will not keep turning it into cash via refinancings.  You need a rising level of equity as a cushion against disaster.

So what will power our economy in the future?  It has to be exports.  There are places in the world where this over consumption from a real estate bubble did not happen.  In fact there is under consumption in these places compared to the rising real wealth (standard of living) of the people in those countries.  You probably know from your own experience with coworkers and customers that India, China, Korea, and Viet Nam are growth areas, to name a few.

If we figure out how to regrow our competitiveness in exports, then we will recover.  If we don’t we will sink back to the level that is maintainable by our own consumers at realistic levels of income.  Of course we will lose some even there because of imports replacing locally produced products and services. This replacement causes the loss of good wage jobs in this country.

If we cannot convince the wealthy of this nation to rejoin the compact as described in the article mentioned in my post suggested by ScottC, Are The American People Obsolete?, then there may be no solution but emigration.  By convince, I mean give them a reason.  No amount of attempted coercion will do it.  They will just leave and take their money with them.