Posts Tagged ‘unemployment’

The big news yesterday seems to be that the Dow Jones Industrial Average hit an all time high! Hooray!

Unemployment remains at 7.9% and half the damn country is crumbling under our feet, so what do you say we put the champagne away and do something about those things?

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This is your semi-regular reminder that we continue to ignore an actual, immediate problem in order to Get Very Serious about a hypothetical, future problem.

That is all.

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You know what would be awesome? 

If we could borrow a lot of money for free, and then give it to people. I’m sure we could find some stuff for them to fix in exchange.

But we won’t do that, because austerity. 

No one was using those bridges anyway, except the 16,284 people who travel across them on an average week day. I’m sure we can fit thousands more cars on the highway during peak commute time, so it’ll be OK. 

Less sarcastically, King of Prussia is the biggest suburban employment center in the Philly metro area, and the only way to get there via train is the Norristown line, which will be the first to lose its bridge this summer. Traffic on the only major route into KoP from the city is notoriously bad, so the plan to bus passengers around the failed bridge will be subject to unpredictable delay. Unpredictability will effectively eliminate the rail line as an option for folks commuting to work, so this really is a big deal.

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Jon Stewart on the paranoia that the government is going to take all the guns:

“Now I see what’s happening,” Stewart said. “So this is what it is. Their paranoid fear of a possible dystopic future prevents us from addressing our actual dystopic present.”

Funny, sounds exactly like the deficit scolds without the window dressing of reasonableness.

Or, you know, sanity.

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Chait gets this exactly right:

The two parties are currently at loggerheads over the manufactured crises of budget sequestration and the debt ceiling. President Obama’s position is that the two parties should enact a mix of cuts to retirement programs and revenue increases through tax reform. The Republican position is that no more revenue can be considered, and further deficit reduction must consist entirely of domestic spending cuts.
The merits of the two positions can of course be debated. What is beyond dispute is that Obama’s negotiating position is exactly the same as the centrists. If they believed that the $600 billion in revenue Obama secured, on top of the $1.5 trillion in spending cuts agreed to in 2011, was enough revenue, and Obama was demanding an excessively revenue-heavy solution to the deficit issue, then obviously they should argue as much. But they do not believe that. In fact, the Bowles-Simpson plan would raise far more revenuethan Obama is asking for. One party stands completely in accord with their position, and it has not happened entirely because the other party stands against it.
Why, then, don’t they say this? Part of the answer is careerist. The elite centrist drone is emitted by people who deem non-partisanship an essential part of their job description. If they concede that one party is advocating their agenda, then you could flip the sentiment around and correctly conclude that they are advocating the agenda of a party; therefore, they would be partisan and have thus forfeited the entire basis of their claim to respectability.

Yep. No one is actually interested in a balanced approach to deficit reduction. They aren’t noting that we’ve already enacted $2.4 Trillion worth of it, only a quarter of which was revenue. 
They just want to pat themselves on the back at how bipartisan and responsible they are. It’s all just status signaling.

Meanwhile, a whole hell of a lot of people are suffering in unemployment. We continue to ignore a very real, very immediate problem to make room for a “serious conversation” about a hypothetical future problem.

That’s pretty fucking insane. 

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In my previous post, it seems I misunderstood Jastonite’s post as an attack on Keynesian economics, when he meant simply to make the point that a job is a cost to be avoided rather than a benefit to be realized. I disagree, and I think this goes a long way to explaining why so I’ll outsource (irony duly noted) my rebuttal and instead address some other points.

Jastonite provides an example of a hypothetical factory that can choose to locate itself in either Mexico or Texas. In his example, all things are considered equal except that the Mexico sit would be cheaper. He argues that it is thus the superior choice because costs can be reduced and thus the Texans that buy the product will have more money left at the end of the day, and there are other employment opportunities in Texas anyways, they didn’t need the jobs. He goes on:

If it still feels wrong, replace the work Mexico with Arizona. Does it feel better now? How about replacing the word Mexico with Houston and the word Texas with Dallas? I understand there is an emotional attachment to jobs.

There is, of course, an emotional attachment to jobs, and for very good reason. But, the changing of Mexico to Arizona is important for plenty of non-emotional reasons as well. One of those is mobility. Our unemployed Texan friend will face a lot of very high barriers if she wants to work at the plant in Mexico. She will probably have to stop being a US citizen, and maybe she doesn’t speak Spanish, for example. But if the plant is located in Arizona, these are not problems. It is far simpler to move from one US state to another US state than from the US to Mexico (As an aside, this phenomenon was largely responsible for the comparatively impressive economic situation in Texas that Rick Perry never shut up about).

Next, Jastonite asks:

Does zero percent unemployment sound good? Maybe at first glance, but how does one start a business in that world? Presuming that everybody is doing something productive, the entrepreneur would have to convince people with existing jobs to quit and join him. That would mean the other business that lost its employees would have to cut back on production, potentially closing down. Wouldn’t it be hard to take a risk bringing something new to market?

Well, I agree. Zero percent unemployment is absolutely not a good thing, and for the very reason that Jastonite mentions. But high unemployment, as we are currently experiencing, is not a good thing either. We should do something about it.

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After I wrote this last night, I came across Chait making basically the same point, but a bit more coherently:

Pete Peterson, an investor and longtime fiscal hawk, has devoted more than a half-billion dollars to lobby for a bipartisan debt-reduction agreement, funding a vast network of centrist anti-deficit activists, like the Concord Coalition, the Committee for a Responsible Federal Budget, and an organization called “the Campaign to Fix the Debt,” all of which have pounded a national drumbeat warning against the perils of the fiscal cliff. “Rhetoric won’t fix the debt, action will,” warns a statement by Fix the Debt. A “solution to the nation’s fiscal crisis,” scolded the Washington Post editorial page, which closely echoes the views of the Peterson network, “can be implemented only if Republicans and Democrats hold hands and jump together.” This is all utterly wrong. Bipartisan agreement is not necessary to fix the debt. Nothing is necessary to fix the debt. It is as if the network of activists, wonks, business leaders, and Beltway elder statesmen who have devoted themselves to building cross-party support for a deficit deal have grown more attached to the means of bipartisanship than to the ends for which it was intended. The budget deficit is a legislatively solved problem. It is, indeed, an oversolved problem.

Exactly. People are far more interested in seeming responsible and bipartisany than in actually doing anything. It should also be noted that the last time we had a balanced budget, conservatives screamed bloody murder that we were being grossly overtaxed and blew massive holes in the federal budget via huge tax cuts. Obsessing over the deficit ignores past experience, present reality, and future needs. It’s an entirely manufactured crisis and it has paralyzed us for years. It would all be kinda funny in its absurdity, if it weren’t so tragic.

edit: added link

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