10 Million Jobs — Why Did They Disappear?

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January 27, 2012. What killed off the jobs? As the graph shows the housing starts first increased, then crashed to 1/4 of their peak. That put millions of construction workers out of work.

You may blame the rich or the poor for bad loans, but either way this was not the fault of the construction workers, yet they are the ones who suffer. And, when they get laid off, they spend less—they don’t buy that pickup they wanted.

That’s why auto sales fell off (see graph) even though there was no bubble in car sales. And, of course these millions of laid off construction and auto workers spend less in restaurants, on clothes, and on just about everything. That caused more layoffs.