Bringing Back The Journeymen

Oct 14th, 2012

Responding to a personal charge in Shawn Gude's interesting if overly floral argument on how we might reach "full employment" and what that would actually mean for the American worker's relationship with management, Matt Yglesias writes:

Much as consistently applied full employment policies will achieve many liberatory aims without employing especially radical means, centrist elites ought to consider that matching workers with in-demand job skills really ought to be the kind of thing a market economy can do reasonably well. Rather than skills-mismatch explaining high unemployment, it's the absence of full employment that explains skills-mismatch. If you want workers to learn to do something, you try to teach them to do it and if necessary pay them more money. 

Long story short: Full employment policies are great and we ought to be demanding them from our macroeconomic stabilization policymakers rather than accepting excuses about how it's hard. 

When the U.S. was actually creating jobs in far greater abundance, it was due neither to a massive distribution of diplomas nor to the stimulative effects of public spending alone; it was because job growth was largely a product of on the job training.

Indeed, what has happened to the journeyman path? One of the repeated explanations offered by our elites in explaining the stagnant job numbers is that we just don't have a qualified workforce for as many as three million open positions. What's never discussed is the fact that the managers who cannot fill these positions always blame someone else for the situation.

Everyone knows that the current metrics in our tax code richly reward outsourcing and off-shoring. Recent attempts to reverse these policies were, of course, filibustered by the GOP. In part, this opposition might be because we simply have to sweeten the pot enough for the lobbyists to get other marching orders. If our central policy makers were proposing benefits even a fraction as attractive as those received by, oh say, our petrol giants, a movement towards fuller employment might have more traction.

The again, maybe not. Gude's arguments key off of a radical 2010 essay written by Micael Kalecki the implications of which demand that we ask whether or not America's private power brokers aren't perfectly happy with the way things are?

It's not necessarily that macroeconomic policy isn't addressing this, as Yglesias argues. It's an ugly truth but the general stagnancy in our labor force and the desperation it has spawned are regarded as plainly beneficial to management.

The Mythical "Job Creators"

Dec 26th, 2011

Business Insider's Henry Blodget writes:

"The most important reason the theory that "rich people create the jobs" is absurd, argues Nick Hanauer, the founder of online advertising company aQuantive, which Microsoft bought for $6.4 billion, is that rich people do not create jobs, even if they found and build companies that eventually employ thousands of people.

What creates the jobs, Hanauer astutely observes, is a healthy economic ecosystem surrounding the company, which starts with the company's customers.

The company's customers buy the company's products, which, in turn, creates the need for the employees to produce, sell, and service those products. If those customers go broke, the demand for the company's products will collapse. And the jobs will disappear, regardless of what the entrepreneur does.

Now, of course entrepreneurs are an important part of the company-creation process. And so are investors, who risk capital in the hope of earning returns. But, ultimately, whether a new company continues growing and creates self-sustaining jobs is a function of customers' ability and willingness to pay for the company's products, not the entrepreneur or the investor capital. Suggesting that "rich entrepreneurs and investors" create the jobs, therefore, Hanauer observes, is like suggesting that squirrels create evolution.

(Or, to put it even more simply, it's like saying that a seed creates a tree. The seed does not create the tree. The seed starts the tree. But what creates the tree is the combination of the DNA in the seed and the soil, sunshine, water, atmosphere, nutrients, and other factors that nurture it. Plant the seed in an inhospitable environment, and it won't create anything. It will die.)"

But, like the Fannie and Freddie myth, this is a lie that will not die.

One more time, it's the demand crisis which is killing us.

Getting Back To "Jobs, Jobs, Jobs"

Oct 1st, 2011

Krugman makes an accurate observation in his latestet critique of GOP obstructionism and self-delusion:

"The starting point for many claims that antibusiness policies are hurting the economy is the assertion that the sluggishness of the economy’s recovery from recession is unprecedented. 


But, as a new paper by Lawrence Mishel of the Economic Policy Institute documents at length, this is just not true. Extended periods of “jobless recovery” after recessions have been the rule for the past two decades. Indeed, private-sector job growth since the 2007-2009 recession has been better than it was after the 2001 recession."

I have pointed out, time and again, that job creation ended as we once knew it a decade ago. We are now, in fact, on track to add more jobs to the American economy in a single Obama term than were added under eight years of Bush II.

Quote Of The Day - Here and Now Edition

June 1st, 2011

"As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do." 

-- Paul Krugman yesterday

They're Just Not Hiring

April 3rd, 2011

No matter how much we give away to the corporations, they just aren't that interested in investing in America anymore. From the CBPP:

A Modest Proposal To Restore U.S. Economy

Jan 17th, 2011

by Stephanie Baselice

The once mighty US economy remains in deep and dangerous waters. Although the markets have largely recovered from the “Great Recession” the general public remains wary and depressed, which is potentially bad for business. It is also a political minefield. Unemployment floats around 10 % by official standards, closer to 20% if one includes those who have ceased looking for work. Despite modest job gains in 2010 at current rates employment growth will take 5 or 6 years to reach pre-recession unemployment levels of 5-6%. Indeed, it may be that the problem lies deeper and that many of the workers recently laid off during this difficult time were comparatively unproductive and will not need to be replaced. We may well shoulder a 10% unemployment rate far into the future. In any case, once high hopes for “change” have been dashed against the rocks of a deep and extended downturn. Inflammatory rhetoric from liberal elites and labor groups about the possibility of shifting economic focus to risky and untried ventures in “green jobs” puts the American way of life at risk. Quality of life measures rank America lower and lower, and despite relatively high worker productivity, our creative and technological edge is growing dull. Rising nations such as India and China will soon surpass us in critical areas such as inventing new products. Education and healthcare are thankfully still private enterprises, yet they consume increasingly large shares of the economic pie for most families. National solutions to these problems are out of the question, of course. Any reasonable person understands that such solutions must be too expensive and disruptive to the profits of current business leaders to even be considered. Yet recent pro-business political gains may well evaporate if the recovery does not soon produce sufficient job growth to avoid a broad based re-evaluation of the political and economic system.