Thursday, October 1, 2009

Shovel Off to Buffalo

by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Sandwichman

Former Clinton Secretary of Labor, Robert Reich, thinks deficit spending on infrastructure is a panacea for unemployment:
Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 state level, and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n some. This is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 only way to put Americans back to work. We did it during cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Depression. It was called cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 WPA.
The Sandwichman sympathizes with Reich's sentiment. But why can't a university professor and ex-Secretary of Labor rise above cracker-barrel wisdom and deal with real facts on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ground. The fact is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 unemployment rate among 16-24 year olds is already nearly 20 percent and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 underemployment rate, including discouraged job-seekers and economic part-timers is over 30 percent. That's three-zero -- thirty percent.

Not all cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 unemployed are qualified construction workers.

In fact, it's likely a relatively small proportion are. Even if cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y were, it's not likely that building all cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 roads, bridges, schools and parks WE NEED would require enough labor to employ cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365m all... unless you're going to opt for those eight-person crews with one shovel. And anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r catch is that those infrastructure projects will also require cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 services of people whose skills and credentials are already in short supply -- thus creating bottlenecks.

No, spending even more on all those public works projects is not such a brand-new, fabulous, fool-proof panacea. Ahem. Did you know cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 patron saint of fiscal stimulus, John Maynard Keynes, didn't exactly have cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 house of pancakes bottomless coffee pot of government spending in mind?

Don't take my word for it. Read Lord Robert Skidelsky's "Keynes: The Return of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Master." Everybody else is. Even at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 OECD. But even Skidelsky is being a bit coy in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latest book. He says, "Over time... cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 high-investment policy should yield to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 encouragement of consumption through redistributing income from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 higher to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 lower-saving section of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 population. This should be coupled with a reduction in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 hours of work." That's a lot vaguer than what Keynes actually wrote and also much vaguer than what Skidelsky wrote about Keynes a decade ago.

The bottom line is that Keynes's ultimate solution for unemployment now is WORKING LESS and not "spending more". Maybe Keynes was wrong, eh? But in that case cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 burden of proof is on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 advocates of more stimulus to show why Keynes was wrong or at least to honestly acknowledge that what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y propose is NOT what Keynes advocated.

9 comments:

Anonymous said...

While he is at it, Reich should also consider cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 effect on employment of an adventure in Iran, or an expanded adventure in Afghanistan.

In 1950, while examining cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economic impact of a military containment of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Soviet Union, President Truman's Council of Economic Advisers came to this conclusion:

"With a high level of economic activity, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 United States could soon attain a gross national product of $300 billion per year, as was pointed out in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 President’s Economic Report (January 1950). Progress in this direction would permit, and might itself be aided by, a build-up of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economic and military strength of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 United States and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 free world; furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365rmore, if a dynamic expansion of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economy were achieved, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 necessary build-up could be accomplished without a decrease in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 national standard of living because cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 required resources could be obtained by siphoning off a part of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 annual increment in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 gross national product."

(http://www.fas.org/irp/offdocs/nsc-hst/nsc-68-6.htm)

The linkage between US military operations and GDP is thus firmly demonstrated by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 so-called American Keynesians.

It should also be noted that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 current "bounce" in GDP has, in large part, been fueled by military spending:

"Real federal government consumption expenditures and gross investment increased 10.9 percent in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 second quarter, in contrast to a decrease of 4.3 percent in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 first. National defense increased 13.3 percent, in contrast to a decrease of 5.1 percent. Nondefense increased 6.0 percent, in contrast to a decrease of 2.5 percent. Real state and local government consumption expenditures and gross investment increased 2.4 percent, in contrast to a decrease of 1.5 percent."

(http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm)

The fact is working time must be reduced or we will continue to be subjected to hare-brained Keynesian schemes aimed at generating make-work.

Mitchell J. Freedman said...

Sandwichman, what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 heck is wrong with you in attacking Reich like you did?

Unskilled blue collar work means you can be relatively easily trained. It's not impossible by any means whatsoever.

The young men in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 CCCs in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 1930s and WPAs had very little skill, and yet cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y were put to work and built marvelous structures and cleaned out forests and replanted ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365rs. I'd racá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r see that than extreme idleness where people don't have anything to do--and you should too.

And please, Reich's point has nothing to do with maintaining long daily and weekly work hours in America. A good union movement can push with Congress for a shorter work week and ensure cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same pay prevails. But we can't even pass cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 EFCA with a supermajority of Democrats in Congress. Sigh.

Finally, to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 first commenter, let's not call building a library or a road "make work." "Make work" is when a private developer builds a building on spec. And even cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n, if he's paying a decent to prevailing wage, bully for him.

No wonder Obama can't see straight when he listens to economists. Instead, Obama should listen to sociologists, who at least understand how cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 world really works. And no I'm not a sociologist. Just a trial lawyer who majored in History and Poli.Sci.

Sandwichman said...

Mitchell,

It turns out that "spending money" isn't quite as easy as it sounds. A few days ago, Biden announced a set of nine goals to accomplish by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 end of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 year. They consisted of commitments to actually spend portions of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 money already appropriated by Congress.

Sure people can be trained and put to work on projects but cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re has to be people who know what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y're doing to train cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365m and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re has to be people -- architects, engineers, etc. -- to draw up cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 plans. And cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re's a lot of technical stuff that you need specialists for and accountants and payroll people and so on...

Yes, and somebody, somewhere has to make cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 determination that a project is a. really needed b. feasible and c. not environmentally destructive.

So what I'm saying is that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re is an inherent ratio between qualified people and unskilled. I don't know what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ratio is but if you exceed that ratio you're hiring people to pretend to work.

Since you bring up cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 New Deal programs as models, I'll just mention that 1. cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 WPA and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 CCC didn't employ everyone that was unemployed; 2. cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 hours of work for relief jobs were shorter than cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 standard hours; 3. hours of work were reduced during cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 New Deal and that reduction held after cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 war.

What Reich is talking about (albeit in vague, general terms) amounts to a much larger public works program than existed in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 1930s and no systematic reduction of hours.

Hey, I'm not antagonistic to public works projects -- as long as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y are well conceived and well implemented. But this willy-nilly "spend, spend, spend" mantra is bat-shit crazy. First, it won't happen and second, it is so packed with emergent snafus that if it did happen you'll wish it hadn't.

Mitchell J. Freedman said...

Sandwichman,

Look around. There's lots of work to do in rebuilding infrastructure in this nation. I know architects, solid guys, too, who are essentially unemployed if cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y were not "self-employed" in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 first place.

Your argument is an argument known as paralysis by analysis.

I would definitely not be upset if we at least tried to help put people to work rebuilding cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 infrastructure of this nation. You'd also be amazed at how fast cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 deficits turn into surpluses on a year over year basis if we followed what Reich has proposed.

I am also not upset if people only worked say 30 hours a week. It might herald a trend away from increased hours for workers, anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r salutary effect.

Overall, Reich's proposal is better than anything Obama, Inc. has proposed so far...

Sandwichman said...

Mitchell,

I think you misunderstand my objection to Reich's proposal. I'm not against rebuilding infrastructure or employing underemployed architects. What I'm saying is that Reich's panacea doesn't scale as conveniently as you might imagine.

I also object strenuously to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 systematic exclusion of what should be a key aspect of any reasonable recovery plan -- cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 reduction of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 hours of work. Reich, Krugman, Delong and all cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 usual suspect liberal Keynesians won't touch work time reduction with a ten-foot pole. That's because it's a shibboleth in mainstream economics. But, hey, Keynes himself called working less cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ultimate solution to full employment. I call "bullshit" on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 faux Keynesianism that refuses to engage Keynes's own arguments.

Mitchell J. Freedman said...

I agree that a work hour reduction strikes at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 heart of a corporatized America and that is why Reich is probably indeed afraid to touch that ultimate third rail.

Still, I think our nation is in such need of infrastructure rebuilding, and getting entire towns and cities back to work that I am saying let's move forward with that now, and start cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 argument for a 35 hour week or even 30 hour week (for 40 hours pay) now as well. One is a program that has support of most Americans outside of corporate media, and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r is an argument that will soon have more support.

Anonymous said...

This is just a fantastic statement, and should replace your current mascá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ad:

"I agree that a work hour reduction strikes at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 heart of a corporatized America and that is why Reich is probably indeed afraid to touch that ultimate third rail."

Yes, as men and women of principles, it is your responsibility to coddle those who speak less than cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 truth because it might alienate cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir corporate sponsors.

Keep up cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 good work!

If people insisted on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 whole truth, who know where it might end.

PS: We could get 40 thousand pairs of boots on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ground by December - how is that for public works!!!

Anonymous said...

At what point will people realize that fiscal stimulus is to economics what bleeding was to medicine!!!!

Ralph Musgrave said...

Sandwichman: I fully agree with your attack on mass “road and bridge building”. I’ve set out what I think are cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 weaknesses in WPA type schemes at http://employerlastresort.blogspot.com/2009/03/employer-of-last-resort.html . And I try to set out a better alternative.

You say “Maybe Keynes was wrong, eh? But in that case cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 burden of proof is on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 advocates of more stimulus to show why Keynes was wrong or at least to honestly acknowledge that what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y propose is NOT what Keynes advocated.” Good point. Well as an advocate cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus to date, and possibly some more stimulus, here goes.

WHY KEYNES WAS WRONG. I agree with what is probably cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 most common criticism of Keynsian “borrow and spend” (and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re are plenty of well qualified economists who agree with this) namely that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulatory effect of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 spending (and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 increase in private sector net financial assets) is likely to be neutered by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 deflationary effect of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 borrowing and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 increase in interest rates.

THIS IS WHAT I ADVOCATE “WHICH IS NOT WHAT KEYNES ADVOCATED”. It’s simple: just spend without borrowing or taxing. This is actually what has happened in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 US and UK in 2009. That is, “borrow and spend” plus “quantitative easing” equals plain simple “print money and spend” I enlarge on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se latter points at http://ralphanomics.blogspot.com/
See posts entitled “Let’s ditch Keynes and monetarism”, 2nd Oct, and: post entitled “No one understands quantitative easing” 1st Oct.

In cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 UK, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 increase in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 national debt (about £200bn) is roughly equal to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 amount that has been “quantitatively eased”.