Jeff Jarvis says the jobs that technology has eliminated are not coming back, and Paul Graham rightfully asks, "Why not this time?" Historically, technology eliminates jobs but also creates new ones. Eliezer Yudkowsky, in the Hacker News thread, posits five possible reasons why "this time it's different" (i.e., this time the jobs won't come back):
1) The amount of regulation and regulatory burden has increased sufficiently between then and now, that new business relationships have a much harder time replacing old destroyed business relationships. I.e., it's now more expensive to hire a new employee.
2) It's a novel change in the financial side of the economy. Like, capital-holders now try to make killings by investing in the right HFT funds instead of trying to go out and invest in new businesses. Implausible? Maybe, but finance has changed a lot recently, so the difference, if there is one, might be there.
3) The amount of re-education required to get a new job has increased enough to be a killer barrier to re-employment, whether because of employers having imposed an arbitrary demand for bachelors' degrees or because the jobs are actually more complex.
4) Ricardo's Law does allow individual regions to lose as a result of tech improvements, because if someone else beats your comparative advantage, people will want to trade with them instead of you. There's nothing ahistorical about the Rust Belt having a persistent recession within the US. This is now happening to the whole US; people no longer want to trade with us, but China is growing plenty.
5) The Thiel hypothesis: Recent technological developments are intrinsically more boring than past technological developments; people are trying to build web apps that will sell to Google for $10 million instead of trying to invent the next "microchip" or "electricity". It's not that the 21st century poses a novel obstacle to forming new business relationships to replace old ones; rather, 21st-century technologies that obsolete jobs are missing a wow factor or wealth-generating factor that previously increased demand or increased total wealth at the same time as obsoleting jobs.
Here's a useful Paul Krugman post about how technology "hollows out" the middle of job market — low-skill (janitors) and high-skill (chemists) people are okay but middle-skill workers suffer. He notes the hollowing out is now creeping into higher and higher skilled professions.
Here's a Boston Globe piece on how manufacturing in America is alive and well — we make way, way more "stuff" than China — it's just that there are fewer manufacturing jobs because of huge productivity gains.
Here's Nick Schulz and Arnold Kling on creating jobs in the New Commanding Heights of the American economy: healthcare and education. They happen to be the two most regulated and government controlled sectors. "To revitalize these sectors and revive the American job market," Nick and Arnold say, "we must open up these industries to competition and entrepreneurial reform."