Ohio miners forced to attend Romney rally without pay...

[kandrathe]

Why would the future be any different? The purchasing power of an hour of labour is going up not down, and in the scenario you describe, where producing almost anything requires almost no labour, it would go up to almost unfathomable levels. Prices will fall to match, and since real wages are wages/prices, we will get richer and richer.* Why not?

Well, what you say is true on the productivity side. But, it is the good news, cup is half full part of the story.

The other side is that the remaining 99% of the village now has nothing to do, and no way to earn the money to buy the corn of the 1% lucky farmer who owns the combine. And... prices have not fallen to match the increases, far from it. They've been forced by government manipulation to follow a 3-6% increase per year to prop up price supports so that the lucky farmer who owns the combine can afford to pay back the loan on his combine.

Extrapolate this to all the other silliness of government intervention in manipulating the natural ebbs and flows of supply and demand, and you see the roots of the mal-investment resulting in these endless boom and bust cycles. Housing seems to be the favorite culprit, and it amazes me that they never seem to learn from their repeated mistakes in manipulating the demand for housing and removing the controls that prevent banks from taking on too much risk.