Every once in a while you come across something that confirms you aren’t the only one whose thoughts travel along a certain pathway.
A Simple Plan would solve the unemployment ‘crisis’ tomorrow and in a stunning admission, Paul Krugman AGREES
That ‘miracle’ aside, he also admits the major obstacle to correcting the unemployment situation is the, er, ‘political will’ to do so.
You see, the capitalists wouldn’t have any problem with cutting the workweek in half nor would it be any skin off of their nose if the workforce doubled as a result.
What would frost the capitalist’s cookies is that this is only ‘half’ of the solution…if we are to cut people’s pay in half we must also reduce how much they are required to lay out by a proportionate amount.
The first half is ‘painless’; it is basically twice the number of workers for the same amount of pay. It is the second half that is going to take some, er, ‘belt tightening’ on the part of the, er, ‘profit compensated’ crowd.
No irony should be lost on the fact that the obvious place to ‘cut’ this expense is already ‘reducing itself’…that is the amount of pay the average worker has to shell out for shelter.
Under A Simple Plan, shelter is a ‘gimme’, you NEVER pay for it…conversely, you can never buy nor sell it either. Which is cool because you don’t need to save for ‘retirement’. That’s a ‘gimme’ to. (Bizarrely, retirement was one of the principle arguments for ‘home ownership’, your ‘ever appreciating’ home WAS your retirement account!)
My how some things change!
Anyway, how did our Nobel Laureate do?
All the facts suggest that high unemployment in America is the result of inadequate demand — full stop.
Saying that there are no easy answers sounds wise, but it’s actually foolish: our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act. [The ‘pittance’ this would ‘cost’ in dollars is but a fraction of what doing nothing will cost in blood!]
In other words, structural unemployment is a fake problem, which mainly serves as an excuse for not pursuing real solutions.
[Were we to ‘address’ our unemployment problem, we would end up ‘shifting’ that problem to ‘exporting nations’, something we must do anyway before the ‘export model’ collapses! (Due to ‘peak energy’.)]
Who are these wise heads I’m talking about? The most widely quoted figure is Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, who has attracted a lot of attention by insisting that dealing with high unemployment isn’t a Fed responsibility: “Firms have jobs, but can’t find appropriate workers. The workers want to work, but can’t find appropriate jobs,” he asserts, concluding that “It is hard to see how the Fed can do much to cure this problem.” [It’s an obvious ‘lie’ to claim that we are suffering from a ‘skills mis-match’ when many of the most qualified workers are actually suffering from ‘over fifty disease!’]
Now, the Minneapolis Fed is known for its conservative outlook, and claims that unemployment is mainly structural do tend to come from the right of the political spectrum. But some people on the other side of the aisle say similar things. For example, former President Bill Clinton recently told an interviewer that unemployment remained high because “people don’t have the job skills for the jobs that are open.”
[Good ol’ Bill Jefferson! Best Republican president we’ve had since Lincoln! Don’t let that D after his name fool you, like his sidekick ‘Barrack’, Billy boy is a dyed in the wool Republican from the word go.
Need proof? Look at who he ‘hangs out with’…]
Well, I’d respectfully suggest that Mr. Clinton talk to researchers at the Roosevelt Institute and the Economic Policy Institute, both of which have recently released important reports completely debunking claims of a surge in structural unemployment.
After all, what should we be seeing if statements like those of Mr. Kocherlakota or Mr. Clinton were true? The answer is, there should be significant labor shortages somewhere in America — major industries that are trying to expand but are having trouble hiring, major classes of workers who find their skills in great demand, major parts of the country with low unemployment even as the rest of the nation suffers.
None of these things exist. Job openings have plunged in every major sector, while the number of workers forced into part-time employment in almost all industries has soared. Unemployment has surged in every major occupational category. Only three states, with a combined population not much larger than that of Brooklyn, have unemployment rates below 5 percent. [It should come as a mystery to no one that those three States are A.) Red and B.) Specialize in Banking!]
Oh, and where are these firms that “can’t find appropriate workers”? The National Federation of Independent Business has been surveying small businesses for many years, asking them to name their most important problem; the percentage citing problems with labor quality is now at an all-time low, reflecting the reality that these days even highly skilled workers are desperate for employment.
So all the evidence contradicts the claim that we’re mainly suffering from structural unemployment. Why, then, has this claim become so popular? [Like he doesn’t know, working as he does for the ‘willful ignorance’ people!]
Part of the answer is that this is what always happens during periods of high unemployment — in part because pundits and analysts believe that declaring the problem deeply rooted, with no easy answers, makes them sound serious.
I’ve been looking at what self-proclaimed experts were saying about unemployment during the Great Depression; it was almost identical to what Very Serious People are saying now. Unemployment cannot be brought down rapidly, declared one 1935 analysis, because the work force is “unadaptable and untrained. It cannot respond to the opportunities which industry may offer.” A few years later, a large defense buildup finally provided a fiscal stimulus adequate to the economy’s needs — and suddenly industry was eager to employ those “unadaptable and untrained” workers.
[Funny how a little thing like the prospects of ‘global subjugation’ changed everything, isn’t it?]
But now, as then, powerful forces are ideologically opposed to the whole idea of government action on a sufficient scale to jump-start the economy. And that, fundamentally, is why claims that we face huge structural problems have been proliferating: they offer a reason to do nothing about the mass unemployment that is crippling our economy and our society. [Worse, doing ‘nothing’ is a ‘non-starter’, you can’t leave millions of people out in the cold with no place to turn because they WILL destroy those who abandoned them!]
So what you need to know is that there is no evidence whatsoever to back these claims. We aren’t suffering from a shortage of needed skills; we’re suffering from a lack of policy resolve. As I said, structural unemployment isn’t a real problem, it’s an excuse — a reason not to act on America’s problems at a time when action is desperately needed.
While I find such articles, er, ‘refreshing’, I am also ‘disappointed’ that Mr. Krugman wasn’t more specific about how to solve the crisis.
This is why I repeat that there is ‘No way out’ of this mess under capitalism. It can’t be done…it can be ‘postponed’ by things like Jubilees (debt forgiveness) but this does nothing to correct the underlying problems that brought us here in the first place.
This brings us full circle to the issue of why they don’t ‘forgive’ everybody’s onerous debts tomorrow.
They COULD do it very easily…but there’s a ‘downside’. Just how diligent would you be paying back future debt knowing they were able to ‘walk away’ from what you owed before?
The, er, ‘incentive’ to pay would go right out the window if they let you off the hook free and repossessing most of what you bought on credit is a non-starter!
Nobody is going to want it after you are done with it nor would they be willing to pay half price for used junk!
So even a Jubilee is, er, ‘problematic’…sets a bad ‘precedent’. Worse, how long would it be before people started ‘demanding’ Jubilees?
Now the whole idea of ‘credit’ goes right out the window and we are faced with the daunting prospects of a ‘gift economy.’ This could very rapidly erode the ‘work ethic’ and result in…you guessed it, another highway that leads directly to ‘economic collapse’!
Naturally, the purpose of these little ‘thought experiments’ is to illuminate rather than to confuse.
A.S.P. provides a concrete method for addressing the ‘population factor’ which has become more ominously labeled the ‘surplus population’ by die-hard capitalists.
Just another reason why capitalism should be abandoned as soon as possible!
Thanks for letting me inside your head,
Gegner
