The latest unemployment news (from a Reuters dispatch, in case the Times pulls it later):

American employers barely took on any new workers in December, a disappointing government report on Friday showed, indicating the economic recovery has yet to translate into sustained jobs growth.

However, the unemployment rate fell to 5.7 percent, the lowest level in over a year and down from 5.9 percent in November.

Evidently, the decrease in the unemployment rate is due almost entirely to people leaving the labor force altogether -- and you can bet that most of them aren't living off sustainable investment income. Continuing:

Encouraged by a reasonable holiday shopping season and a drop in filings for jobless benefits in December, economists had been expecting payrolls to rise 130,000. The jobless rate was forecast to hold steady at 5.9 percent.

In other words, a lot of economists had been making the reasonable-sounding assumption that more economic activity in America would lead to American companies creating jobs... in America. Which has been, for example, the free traders' case against restricting trade to preserve American jobs for a while:

...it's job shift--not job loss. "[S]ome Americans who otherwise would have had high paying jobs either have no jobs, or else lower paying jobs," but other Americans who would have had no jobs or else lower paying jobs have higher paying jobs, and Americans who buy what they make pay less and so have higher real incomes. We pay for the stuff that Indians sell us by giving them dollars, and those dollars are useless to them unless they use them to buy U.S. exports (or trade them to people who will use them to buy U.S. exports) or invest them in America--thus providing financing for American businesses to expand their productive capacity.

That's Brad DeLong, who is arguing, in this instance, that outsourcing shouldn't necessarily lead to a decline in the overall well-being of the American workforce. But he doesn't even bother to draw an explicit connection between "American businesses ... expand[ing] their productive capacity" and new jobs for Americans -- it's that obvious. Or it has been.

But something has recently changed -- and what has changed is, in fact, outsourcing. The chic way for American businesses to expand is to hire outside America. And this is the case in just about every industry you can think of -- heck, GM and Ford have set up car design bureaus in India, which is also fast becoming a destination of choice for advanced medical treatment. Which is surely a great thing for India -- and would be a good thing all around if the Americans being displaced had something better to look forward to than low-wage jobs in a retail sector increasingly dominated by the notoriously abusive WalMart. But the current economic expansion has been going on for long enough that if one believes that economic activity in America per se leads to the creation of good American jobs, one ought to be able to point to which good jobs have been created, where. Or else, at least start to worry that the connection has come unstuck.

Now, I'm not saying that trade per se is a problem here, or even that outsourcing in any individual sector is a problem. But a general race to the bottom, cutting across all sectors in the economy, reducing wages across the board to third world levels and polarizing the income distribution, is a problem. It's starting to look like that's what's happening here -- and that outsourcing is one of the ways it is happening. Trade barriers of whatever sort are surely not the best way of dealing with a situation like that, probably not even a very good way. I'd welcome better ideas. But first, you've got to acknowledge the problem...