The New Normal: A "Managed Decline"? | 73 comments (73 topical, 0 editorial, 0 hidden)

Re: There are two ways of knowing the LTG thesis. (none / 0)

Even the best of the mainstream economists, people like Dean Baker, when faced with an 8% Demand Deficit, can look around the landscape of an economy consuming 1/4 of the world's oil production while only producing 1/10 of it, with roughly 1/6 of the world's oil production to run our transport system alone ~ and not find anything for the US Government to spend a big chunk of 8% of US GDP on.

I was thinking of the problem of the "Government as employer of last resort" or the "job guarantee programme" you yourself have advocated on occasion.

So I look around and I see Spain with over 4 million unemployed (an official rate of more than 20%) and for the life of me I cannot imagine what I would employ 4 million people to do "if I were King"...

Not that I'm the brightest of mainstream economists, but I wouldn't even know where to start in order to manage a "job guarantee" programme on that scale.

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11

by Carrie (migeru at eurotrib dot com) on Wed Mar 2nd, 2011 at 10:56:59 AM EST
[ Parent ]

Re: There are two ways of knowing the LTG thesis. (none / 1)

You mean to say that there are no jobs for construction workers in upgrading your urban light rail net? That your postal service could not improve performance with greater labour input? That all your streets are swept? That your educational system is redlined so hard that you have no room to re-train people? That your shipyards, steel mills, windmill factories and railways have neither vacant unskilled positions nor skilled vacancies and the ability to perform vocational training?

In that case I am left wondering why, precisely, you would want to increase employment rather than simply paying people a basic living stipend?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 2nd, 2011 at 11:11:08 AM EST
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Re: There are two ways of knowing the LTG thesis. (none / 0)

I suppose you're right.

So, in what may be my last act of "advising", I'll advise you to cut the jargon. -- My old PhD advisor, to me, 26/2/11

by Carrie (migeru at eurotrib dot com) on Wed Mar 2nd, 2011 at 11:27:44 AM EST
[ Parent ]

Re: There are two ways of knowing the LTG thesis. (none / 0)

yes Jake, and don't forget composting and tree planting!

as for paying them a basic living stipend, good move.

or put 4 million spaniards on half time, so all can work.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat Mar 5th, 2011 at 03:48:02 AM EST
[ Parent ]

What JakeS said ... (4.00 / 5)

... for employer of last resort programs, the cost of the wage is not charged to the activity, its charged to the general fund, so the question is, what activities are worth their on-costs?

Between environmental remediation, sustainable infrastructure provision and direct provision of increased social services, all budgeted on the basis of on-costs after labor cost and so strongly biased to be done in as labor intensive a way as practicable, employing 10% to 15% of the workforce with Job Guarantee jobs is do-able.

Of course, once a substantial fraction of the unemployed are provided with Job Guarantee jobs, there will be an increase in private employment as well, so its not as if the Job Guarantee has to employ the entire 20%.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Mar 2nd, 2011 at 12:26:38 PM EST
[ Parent ]

Re: What JakeS said ... (4.00 / 5)

Under the assumptions by which Mainstream Econmics and the conventional wisdom currently operate, a US mobilization to meet the challenges posed by Germany and Japan in the late 1930s would not have been possible, nor could the Pharaohs have built the pyramids. Political power to organize the productive capabilites of society is at the heart of how societies actually operate, but is totally excluded from consideration in mainstream economic thought, which enforces a strict seperation between economics and the state, while, in the USA, being, de facto, in violation of the establishment of religion prohibition, as their economic orthodoxy has become the established state religion.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 2nd, 2011 at 06:23:20 PM EST
[ Parent ]

Nor could the US have fought in WWII ... (4.00 / 2)

... definitely a declaration of war after the bombing of Pearl Harbor would have had to be delayed in order to first work out if the bond markets would finance an all out war.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Mar 3rd, 2011 at 10:13:58 AM EST
[ Parent ]

Re: What JakeS said ... (4.00 / 2)

Your point is well taken, as is Bruces'.
The most useful comments for me.
However, I'm convinced this is only one of the operant processes modulating the "now" we find ourselves in. There's more going on - a lot more.
What passed for mainstream economic thought remains the superficially dominant model. But on a more fundamental level the humiliating collapse of vast sections of it's foundational doctrine has not gone unnoticed. We all know "Mainstream" is staggering.

I did my little tongue-in-cheek briefing to pose a dilemma- one I think is common today and growing more and more common. The dilemma of someone who has at least some of the levers to hand, and who gets it, but who is faced with the vast inertia of vested interests, denialists, predators, and a congress populated largely by manipulative, self-congratulatory dickheads, after a half-century of filtering out the last of the true old-style public servants.
Think Russ Feingold.
Don't know who would be comparable in Europe, but I'm sure they're there.
Whether you credit Obama with the wit to see the elephant isn't the point.

That dilemma occurs everywhere, at a time of paradigm shift, unless you see the "other" as just fools.

Who gets it?
How long ago did the light dawn?
What would be (has been) their possible courses of action?
Once the number of players who have made the transition grows beyond some critical mass, what happens? What's the range of likely outcomes?
Some of this is knowable.

My question was embodied in the title.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Mar 4th, 2011 at 02:02:42 AM EST
[ Parent ]

The New Normal: A "Managed Decline"? | 73 comments (73 topical, 0 editorial, 0 hidden)

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