The Stigmatization of the Unemployed

One thing I have never understood in America is the way that people who lose their jobs become pariahs in the job market. We’ve now had a spate of commentary on the fact that official unemployment figures are looking a tad less dreadful by dint of the fact that increasing numbers of the long term unemployed have dropped out of the job market entirely. Even the conservative Washington Post woke up last week, Rip Van Winkle like, to take note of the growing number of long-term unemployed. Bizarrely, or perhaps as a fit illustration of the spirit of the day, the article was titled: “Hidden workforce challenges domestic economic recovery.” In other words, they are Bad People because if the economy ever picks up, they might come out of the woodwork and start looking for jobs!

Many pundits, such as Paul Krugman in his latest New York Times op-ed, have decried the lack of anything remotely resembling adequate responses to the unemployment problem, particularly that of the long-term unemployed. Ronald Reagan, hero of the right, was concerned when unemployment rose over 8% and took a series of corrective measures, including the Plaza Accord, which was a G-5 currency intervention to drive up the value of the yen. So why do we have a nominally Democratic president sitting on his hands in the face of much worse unemployment?

I’d argue that the roots lie in a fundamental change in policy that took place around 1980. The lesson that economists drew from the stagflation of the 1970s was that labor had too much bargaining power. The excessive fiscal stimulus of the later 1960s and the oil price shocks of the 1970s had been amplified by the fact that workers had enough clout to demand and get wage increases when they faces sustained price increases. That of course led to more price increases since higher wages led to higher production costs which led business owners to increase prices of their goods and servicer, thus accelerating the inflation already under way.

The solution, per neoclassical economists, was to use unemployment to keep wage demands in check. Thus having a lower level of employment even in good times and taking other measures, like weakening unions, was key to keeping those pesky workers from ever serving to create a reinforcing inflationary dynamic.

As an aside, there were other convenient (to the capital-owning classes) side effects of this policy. Before, there had been an explicit agreement between unions and employers embodied in the so-called Treaty of Detroit, which was that workers were to share in productivity gains. President Kennedy even warned major corporations that if they did not adhere to this understanding, he’d push through legislation to make sure they did. Since wage growth and productivity growth marched in near lockstep from 1950 to just after 1980, it appears white collar worker benefitted from blue collar bargaining successes.

Mike Konczal points to a recent paperby Daniel J.B. Mitchell and Christopher L. Erickson that goes through twenty years of Fed transcripts. The Fed was clearly obsessed with unions; it sawn them as actively bargaining for higher wages, which in a central bank that kept fighting the last war of runaway inflation, was to be discouraged. And let us not forget that that viewpoint turned traditional growth models on their head: rising worked incomes had been seen as the driver of prosperity.

Yet as much as I’d love to take a few more notches out of Greenspan’s reputation, I’m not a believer that the non-existant growth in real worker wages can be laid at this feet. Both the wage stagnation and the cessation of workers sharing in productivity gains dates started before Greenspan took the helm. As much as he has been sanctified for breaking the back of inflation (and putting banks through a lot of pain to do so), he was also explicit about seeing weaker worker wages as a sign of success (he carried a card in his pocket in which he was logging construction worker wages; he wanted to see them fall before he was prepared to declare victory). The Volcker Fed was no friend to the ordinary worker; Volcker was simply willing to put the banks through a lot of short term pain for their own long-term benefit.

Konczal asks for falsifiable hypotheses on this idea that the Fed was a big culprit in the fallen standing of labor. I don’t think they can be constructed, since monetary policy is a blunt instrument, and even though Greenspan began to break with the Fed’s traditional stance re independence, he was not an active player in the Administration’s policy setting. Moreover, the Greenspan put, which took hold in the 1990s (starting with the derivatives wipeout of 1994-5) meant if anything that Fed policy was overly loose.

The reason that that didn’t lead to firmer employment, as former Fed economist Richard Alford argues, was inattention to persistent trade deficits, and that was due to policy measures outside the Fed’s purview. The Fed failed to factor that in fully due to its reliance on macro models that assumed any trade deficits were transitory and hence could be ignored. But older-school economists would have recognized that sustained trade deficits meant that US stimulus, including monetary policy measures, would leak into foreign demand. As we quoted Alford in ECONNED:

If you look at the difference between gross domestic purchases and potential output, by US consumers, businesses, and government—all are above potential output. The only time in recent memory when the difference between these two measures started to narrow was in 2001 when we were in a recession. . . .

The policy goal has been to generate sufficient levels of demand to support full employment. . . . That would be fine if we did not have a net trade sector or at least had a stable net trade sector. But . . . we’ve had a flood of imports which have depressed prices in tradable goods. Fed Governor Don Kohn . . . said imported deflation knocked 50–100 basis points off measured per annum inflation. At the same time, rising imports have hurt American workers. . . . the underlying problem is not deficient US demand, but a structural external increase in supply (globalization). Given the inability of the dollar to serve as an adjustment mechanism, we are consuming too many imports, but instead of US policymakers addressing this global development, we created a number of unsustainable domestic imbalances to keep employment at politically acceptable levels. Higher levels of debt and asset bubbles have been the result of policy responses to external imbalances.

It isn’t as satisfying as pointing fingers at the Fed, but having lived through the 1970s and 1980s, it is hard to understate the shift in policies and values that started in the Reagan/Thatcher era, even if some of the foundations were laid earlier. And with that came the ascendance of neoclassical economists. The obsession in the FOMC transcripts with the now-discredited NAIRU (Non-Accelerating Inflation Rate of Unemployment) is one sign of the intellectual lock that neoclassical economics had established over policy thinking.

Another boost to the power of neclassical economists was the widespread depiction of the Volcker success in breaking inflation as a monetarist experiment. In fact, as William Greider’s Secrets of the Temple shows, Volcker simply used monetarism as an excuse to cover the fact that he did not want to be bound by a target interest rate. And efforts at his Fed and Bank of England showed that monetarism did not work; there was no consistent relationship between money supply growth and any macroeconomic variables. But the popular perception that Volcker had whipped inflation using monetarism gave a huge boost to Milton Friedman and the Chicago School of Economics, which allowed them to extent their influence over policymaking.

I think there have been significant second-order effects as a result of a restructuring of the American workplace by employer who like to claim that “employees are our most important asset”: but really treat them as expenses to be minimized, ruthlessly. One is the way unemployment quickly becomes a barrier to getting a job again. There has always been bit of a stigma surrounding unemployment, since the concern is that the individual lost his job for performance reasons, as opposed to bad luck (his company being acquired, say).

But I’ve seen the bias become far more ingrained over time, reinforced and rationalized by the bizarre way that companies now spec jobs. Whereas in the stone ages they’d hire a competent-seeming individual with some relevant experience, they now look for people who have done exactly the same job at a similar company. This overly narrow hiring spec then leads to absurd, widespread complaint that companies can’t find people with the right skills. That’s bunk. As Dean Baker has pointed out repeatedly, it means they need to pay more, or as I’d suggest, they need to broaden their horizon a tad. The idea that people need a lot of costly training is in most cases grossly exaggerated, a convenient “whocoulddanode” for manager who are quick to fire people and then discover when they want to gear back up that there are costs of brining new workers on, no matter how hard they try to minimize them.

This bias against those out of work is long-standing, although it has gotten worse over time. Talented people over 40 who have lost a corporate perch are pretty much unemployable; I cannot tell you over the last 15 years how many people I’ve seen retire early (and at a modest standard of living) who’d much rather be working. They are the high class version of this problem. And from what I can tell, a significant portion of new business formation is out of necessity: people who cannot find a job setting up their own single instead.

So this “skills” meme is basically an excuse for bad policy and lazy management. It allows for the rationalization of outcomes that would have been seen as unacceptable in the Reagan era. And it’s hard to pin this development on the Fed. This weakening of the position of workers is the result of both deliberate action and misguided economics frameworks. It’s time to take aim at the ideology, not just some of its key followers.

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129 comments

  1. Spencer Thomas

    Very good post. Thank you.

    Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of “dog eat dog”, “every man for himself”, “society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy”, and “everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery.”

    The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren’t steeped in this culture and ideology, we’d still be left with the culture in the population at large, and things like the “unemployed stigma” are likely to die very, very hard. Acceptance of the “just-world phenomenon” here in the US runs deep.

    1. Rex

      Spencer Thomas: “Many of us have internalized, without even realizing it, the ideas of “dog eat dog”, “every man for himself”, “society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy”, and “everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery.” ”

      Wow. Really? I never let something like that creep into my internals. If others have, it may help to explain why lots of voting results and other behaviors seem so insane to me. What might have motivated this internalization of anti-Christian values?

      Seriously. I see the symptoms but I don’t get it.

      1. Rex

        Perhaps I should clarify that I am not really looking at his from a Christian point of view. Any decent religion should abhor those values. I stuck in the Christian part as a sort of irony because religion keeps creeping into our politics, but only on the edges for twisting discussion about things like terrorists, abortion and gays.

          1. perfect stranger

            “Religion is just as vulnerable to corporate capture as is the government or the academy.”

            This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.

            Religion, as is structured, is complicit: in empoverishment, obedience, people’s preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.

          2. DownSouth

            perfect stranger,

            Religion, just like human nature, is not that easy to put in a box.

            For every example you can cite where religion “is complicit: in empoverishment, obedience, people’s preconditioning, and legislative enabler in the institution,” I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.

            Examples:

            •Early Christianity
            •Nominalism
            •Early Protestantism
            •Gandhi
            •Martin Luther King

            Now granted, there don’t seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I’m not sure we can do. Would it be appropriate to consider Hedges a religionist?

          3. perfect stranger

            Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.

            You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.

        1. Matt

          This link may provide some context:

          http://en.wikipedia.org/wiki/Prosperity_theology

          In particular, there seems to be an extremely popular variant of the above where the starting proposition “God makes moral people rich” is improperly converted to “Rich people are more moral” which is then readily negated to “Poor people are immoral” and then expanded to “Poor people are immoral, thus they DESERVE to suffer for it”. It’s essentially the theological equivalent of dividing by zero…

          1. Procopius

            Yes, that seems to be what happened to Calvinism, which devolved into the Puritans, who brought it with them to Plymouth Colony, an early experiment in pure theocracy. People who hold that view never seem to see examples of immorality in the rich which are apparent to the rest of us. I think they also believe Calvin’s reasoning that there are only 4,400 places in Heaven, and God has already decided who is going there (“the Elect”), so it doesn’t matter what you do if you’ve been selected because God never changes his mind.

      2. DownSouth

        Rex,

        I agree.

        Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call “neoclassical economics.”

        That said, the ranks of the neoclassicists are not small. They constitute what Jonathan Schell calls a “mass minority.” I suspect the neoclassicists have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.

        The ranks of the neoclassicists are made to appear far greater than they really are because they have all but exclusive access to the nation’s megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.

        The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: “See what a huge upwelling of popular support I am responding to.”

        1. JTFaraday

          Well, if that’s true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.

          This is as much to the benefit of those who would like to pick up “damaged goods” on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.

          That’s where I see this blame the unemployed finger pointing really getting traction these days.

    2. Your Daddy

      How do you explain the rich willingly paying 40% or more in personal income taxes (when combining federal/state income taxes) year in and year out, the implementation and continual funding of the medicaid, medicare and social security program[s]?

      And what about the fact that all illegal immigrants (assuming they are law abiding people outside of not following our immigration laws) can freely live, work, drive and can even use hospital services and can have children that can use our school systems unbated?? What other first world country lets undocumented (illegal) immigrants conduct these activities and use these sort of governmental/societal services without huge penalties?

      How do you explain all this when America is supposed to be this heartless, cold country that doesnt care about anyone, including its own citizens?

      Face it. We do have social safety nets, and further we are comprised of people that care about and for each other. This country was founded on and still continues to abide by the principle of togetherness, unity and the duty to ensure for the safety and wellness of others.

      Oh. And last I checked, humans are still part of the animal kingdom. That means Darwinism theories and the laws of nature also apply to us, no matter how more enlightened and wiser you think we are than other animals. The fact that you decry darwinish in our society as if it shouldnt apply to us or shouldnt exist in our society speaks volumes of your inability to understand nature and the merits of its evolutionary processes, however cold you find them to be.

      1. bob

        Daddy, thank you.

        “How do you explain the rich willingly paying 40% or more in personal income taxes”

        But your daddy, Warren Buffet, says that he pays less in income taxes (percentage) than his assistant.

        It just doesn’t make sense daddy, make it go away.

      2. /L

        Social Darwinism, survival of the fittest, is political ideology invented by a dude named Herbert Spencer in the late 1800s, Darwin didn’t say that. Darwinism is about natural selection that is the organism that is best able to adapt to a changing environment is likely to be around. That don’t specify dog eat dog competition as a “natural law”. That is only nonsensical wing nut propaganda.

      3. Your Daddy

        Buffet pays capital gains taxes because of his long-term investments and not personal income taxes. Our society has chosen to treat in the tax code long-term investment holdings differently than wages for personal services.

  2. attempter

    I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.

    I just can no longer abide the notion that “labor” can ever be seen by human beings as a “cost” at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.

    The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn’t do that, we’re better off without it.

  3. psychohistorian

    I am one of those long term unemployed.

    I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.

    I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the “there is no problem here, move on now” approach.

    Hell, I was a junior woodchuck program administrator back in the early 70’s working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn’t have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy…but I digress.

    I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.

    So, of course there is some sort of character flaw that is keeping me and all those others from employment…..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available…..taking work away from other who may need it more….why set up a society where we have to compete as such for mere existence???????

    One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors…there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus….IMO.

    1. Ishmael

      Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.

      First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.

      Second, most CEO’s any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the “client said I seemed very assured of myself.”

      Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don’t get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me “not very charming.” He said he asked what that meant, and the person who said that said, “Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about.” CEO do not want any challenges in their organization.

      Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.

      Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, “If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more.” Another well known recruiter in S. Cal. one time commented to me, “Your average consulting gig runs longer than our average placement.”

      With all of that said, I have a hard time understanding such statements as “@attempter “Workers create all wealth. Parasites have no right to exist.” What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.

      Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.

      I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.

      1. Tao Jonesing

        You need to take those analytical skills that scored you your high hourly rate and apply them to comprehending what attempter actually said. You’re missing his point completely.

      2. Lidia

        Ishmael, you’re quite right.
        When I showed my Italian husband’s resume to try and “network” in the US, my IT friends assumed he was lying about his skills and work history.

        Contemporaneously, in Italy it is impossible to get a job because of incentives to hire “youth”. Age discrimination is not illegal, so it’s quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).

        1. Ἄλκηστις Fan


          Lidia says:
          March 20, 2011 at 2:30 pm

          Ishmael, you’re quite

          But don’t you just love the name *Lidia*? I sounds sooooo T. S. Eliot.

          Has this blog missed the mark for economic goals? Should our goal be less of philosophical purism and more of *national competitiveness*? Could we function hell of a lot better with everyone more productive, everyone going aboard==already aboard, nobody missing the bus, everyone employed? Should labor unions be reserved only for the unemployed and heavily supported by those already employed? Have de facto unions degenerated into more gravy for the fortunate who already own employment positions? More gravy for underworld connections of unions? More votes for incumbent politicians who feed the underworld-gravy-train that trains politicians?

          Should well positioned workers stop featherbedding, start working, and start working towards more company profit to fuel the rehiring process? Do you see what I am talking? One guy sitting in the White House cannot make it happen. The actually happen part of the equation will now fall to the workers themselves.

          Now, you got to get back to work. Now, you got to improve your attitude towards the unemployed. Now, you got to be charitable towards the unemployed. Now, you got to find activities for them.

          You are my people, Populous.

          Start thinking, My People
          !

      3. JTFaraday

        “Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.”

        Agree. They want them young and dumb not just because management is threatened but because they want people who are too inexperienced to have a clearly developed sense of ethical business practice. By the time they figure it out, either they’re sucked in or they need to “move on” (in order to “move up,” of course. It must be better somewhere else, right?).

        1. Ishmael

          JT — Agree with the comment. When I was working with this international consulting firm we were having training on what happens if we uncovered illegal actions. The proper response was to bring it to attention at the higher levels and if not responded to then resign. The group was asked if anyone had a problem with this. I indicated that this was a nice rule, but attempting to hide behind it was BS. I pointed out that saying you were just following orders did not prevent many German officers from being found guilty of war crimes and hung even though disobeying would have led to being shot. The instructor just about went nuts, even though a few years later that rule was changed to more correspond to my thinking.

          As I indicated above, I have walked on several clients and this was mainly due to ethics issues. Just recently I walked on a client over unethical and illegal matters. I brought the issues to their attention and the CEO started yelling, “You s*&^ty consultant.”

          Most young people do not have this grounding.

      4. Hosswire

        Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves.
        I used to be a recruiter myself, including at Korn Ferry in Southern California.
        I described the recruiting industry as “yet more proof that God hates poor people” because my job was to ignore resumes from people seeking jobs and instead “source” aka “poach” people who already had good jobs by dangling a higher salary in front of them. I didn’t do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening. I did it because the client, as Yves said, wanted people who were literally in the same job description already.
        My theory is that the client wanted to have their ass covered in case the hire didn’t work out, by being able to say that they looked perfect “on paper.”
        The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.

        1. Ishmael

          Hosswire — I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.

          I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.

        2. Mannwich

          As a former recruiter and HR “professional” (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar “talent” will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What’s almost comical is that companies almost always want to see the most linear resume possible because they want to see “job stability” (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn’t?

          1. Ishmael

            Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.

            The average tenure for a CFO anymore is somthing around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).

      5. Birch

        uh, Ishmael, attempter never suggested that you were not a worker, or that you are a parasite. That idea came from your own psyche, not anyone else’s. Nor does ‘worker’ refer only to physical labourers.

        If you work and produce something of value for your employer (or client), you inherently own the improvement you produced. You forfeit that improvement to your employer/client in exchange for pay, or compensation of some sort, because that improvement is more valuable (useful) to your employer than to you. If your compensation is equal to the value of what your work resulted in, that is fair. Unfortunately, the worker is rarely compensated fairly – there is almost always a premium of some proportion gleaned by the rentiers, or the ‘parasites’. Nobody accused you of belonging to that group, and indeed it sounds like you conduct genuine work; but you may have some reservations about that yourself.

        Regardless, haphazardly calling someone ‘communist’ for ideas that trash ‘communism’ and ‘capitalism’ equally shows you haven’t yet outgrown your McCarthy indoctrination. Grow up.

        1. Ishmael

          That idea came from your own psyche
          ———————————-
          Yeah Birch, what ever. Thanks for the psychoanalysist arts and science school babble. The sense of entitlement from a few of the posters is a little over whelming.

          1. Birch

            Ish,

            I appreciate your illumination of the employment culture of big corporations. This is a world rather separated from my own (which has nothing to do with arts and science school or psychoanalysis BTW) and your stories help to explain what’s going on.

            I was speaking to your other point:
            ““@attempter “Workers create all wealth. Parasites have no right to exist.” What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me.”

            Yes, every worker creates wealth. No, there are lots of differences between workers. Workers should be paid according to the work they contribute to society, just as the capital owners should be paid according to the contribution they make to society. Capitalists and labourers are equals in the production equation. Capitalists can’t do anything without workers. Workers can do lots without capitalists, but they can do way, way more with their support. The real enemy to both groups are what I will call the rentiers – traditionally the aristocratic land owners, today I guess they’re the ephemeral financial elites we hear about but never see. The tactic of this group (what attempter called the parasites, I believe) is to make labour and capital each believe it is the other that is limiting their ability to receive a just return for their efforts. High wages limit return on investment, so the investors push for lower wages, when what is really limiting both is interest on loans of money that didn’t exist when the money was lent, rents on land (not the improvements of that land, but the Earth itself) and the like. Think if all the money borrowed from banks by companies so they can exist didn’t carry the burden of interest (remember that charging interest on something that didn’t exist before you lent it is normally counterfeiting) how much more money there would be for workers and investors? Or if the rents for the land under the factory didn’t go to some landowner whose grandfather bought it cheap because he had connections way back when.

            The big lie is to conceal that workers and capitalists are allies against the parasites. The rentiers have perfected a divide and conquer that was identified over a century ago, (one that was overlooked by Marx BTW), yet we still fall prey to it.

            Does this answer your question at all? This is as far from communism as anything. It’s populism, perhaps, but it stands to benefit all of us that are people who, at some point during our life cycle, make any real contribution to our community and to society.

          2. Ishmael

            Birch:

            The real problem has become and maybe this is what you are referring to is the “Crony Capitalism.” We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.

            This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.

            On the other hand, govt is not the answer. Govt is too large and accomplishes too little.

  4. /L

    Economists central bankers and so on doesn’t rule the world. The rich and mighty in any society have always surrounded them self with a class of pettifoggers or so called intellectuals and academics. Usually have the utmost power emanated from economically dominant interests, even if the power in formal and also here and there in some meaning have been exercised by head of states that have inherited or been elected to this position.

    The class of pettifoggers or so called intellectuals and academics have always been the mouthpieces of power, the exceptions are very rare. Of course it’s also like that now.

    Of course many intellectuals and academics is honorable teachers, official and experts in many fields that isn’t in the direct interest to exercise power. Those who are is their maters voices. Despite this they are quite successful in claiming moral high ground. But is in fact just a simple boot licking riff-raff and vermin.

    The rare truth seeker there have been is usually made noble heroes of truth seeking after they are dead, long after. Present true truth seekers have a hard time to be popular among the ruling class.

    Some of the intellectual progressive economist in the 70s noted that already in the late 60s there started to show up odd figures on the economic seminar and lecturing circuit.

    Before the 1930s the top ten % got a significant share of the growth and income, from the 30s to the beginning of the 70s the bottom 90 gained a much larger share and the top ten a much smaller. The great crash 1929, the depression and the first large scale industrial war between nations did suppress the power of the top, not insignificant was a real commie threat from a fast tracked industrialized Soviet that lifted old Russia to a real super power. I did take the top % a couple of decade to recover and to launch a serious class war with a vengeance.

    It’s in no way an issue of economic ”scientific” ideas and theories, it’s a class war.

    Already Keynes described the economic policies in Britain during the 1920s as a campaign against the working class living standard by deliberate creating unemployment, ie class war.

    Bill O’Reilly on 60 minutes to Charlie Rose
    “It’s a war Charlie. You do understand it’s a war?

    Rising unemployment was a very desirable way of reducing the strength of the working classes . . . What was engineered – in Marxist terms was a crisis in capitalism which recreated a reserve army of labor, and has allowed the capitalists to make high profits ever since.
    Alan Budd, chief economic advisor to Margaret Thatcher

    And the stupid leftists like Marxist and so on did really believe the capitalist propaganda of a decaying capitalist class, sort of just to sit on the grandstand and watch the capitalist class self destruct as Marx had predicted. This when the capitalist class launched the major class war that probably have succeeded beyond expectations. And the idiot leftists believe when ever there is an crisis that it’s the time for the capitalists to implode, they seems to never learn anything.

    1. DownSouth

      /L said: “It’s in no way an issue of economic ‘scientific’ ideas and theories, it’s a class war.”

      Truer words have never been spoken.

      Science has proven to be the perennial enemy of the oligarchic class. That’s why, at the end of the day, the oligarchs have always ended up erecting the walls of their fortresses by using the building blocks of rationality, irrationality or pseudo-science. You can always find a Plato, Cicero, Pythagoras, Xenophon, Cicero, Descartes or Friedman to, for whatever reason, do battle against science.

  5. Rex

    “And the stupid leftists like Marxist and so on did really believe the capitalist propaganda of a decaying capitalist class, sort of just to sit on the grandstand and watch the capitalist class self destruct as Marx had predicted.”

    Just because Marx or his biggest practitioners didn’t live to see capitalism’s demise, doesn’t exactly ensure it won’t happen. Is there any major social organization in history that hasn’t collapsed after a period of time?

    Evolution and entropy seem to apply to everything except, possibly, the faith that allows us to expect that we, or our descendants, can safely store nuclear waste longer than our species has existed on the planet.

    1. /L

      Of course everything have an end, so does our civilization, so humanity in this planet and later on our solar system. Maybe the universe is some sort of circulation cycle, who knows, otherwise the partial existences seems to be quite linear with a beginning and a end even if the material is recycled.

      The stupid thing with the mentioned leftists is that when the working class really need help to fend of the real class war those fellows engaged in futile nonsense and have done so during the entire onslaught during the decades since then. Those leftists also have a sort of commie asceticism vein, and the spoilt and pandered workers that have gotten it better needed some capitalist imposed asceticism. But without a working class to be interested in they turned to loony identity politics. If the working class want to retake lost ground they can expect no help from the professional left/liberals. On can understand if tea party nonsense grows or that xenophobic homeland fascists take ground among working class in Europe. The left have gone green and despise cheap working class “consumerism”, something that has to be curbed.

      The Moral Collapse of the Moral Left
      the first problem of this value oriented left is that, for all its talk about democracy and human rights, it has effectively emptied democracy of its content and made practically illegal the economic policies of the old left that had created, by the end of the seventies, a relatively peaceful, well educated and tolerant Europe.

      1. Rex

        “The left have gone green and despise cheap working class “consumerism”, something that has to be curbed.”

        Yeah, those working class stooges are the heart of consumerism. Did you ever see that TV show “Lifestyles of the Rich and Famous”?

        It’s a long tradition where the working classes aspire to, and would like, all the perks of consumerism that the wealthy swim in. Go figger.

        Truth be told, a whole large portion of the population has had the benefits of cheap energy for a long time, but somehow, as that expires, I fail to see why the upper crust gets the right to go all Louis XIV on us.

      2. DownSouth

        /L,

        I am generally in agreement with your critique of the Left, and especially the New Left, even though I would not be so quick to throw identity politics overboard. Identity politics has an important role to play, but like everything else, is vulnerable to capture by corporate interests. I wrote a comment dealing with this subject the other day, which I will take the liberty to repost here.

        Re: “A Microcosm of the Market Manipulation in the US and the Repeated Failure of Ideology” Jesse
        http://jessescrossroadscafe.blogspot.com/2011/02/microcosm-of-widespread-market.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Café+Américain%29

        Jesse said:

        And when the next financial crisis comes along, perhaps the people will not be so complacent and gullible, and see the real culprits behind the ideological scapegoats and fog of talk show hosts. But I’m not betting on it.

        This raises an important question, for it’s always seemed to me like the “ideological scapegoats and fog” emanate from both ends of the political spectrum.

        I’ve often said that the New Left and neoliberals are partners in crime.

        Nancy Fraser, in an article that JT Faraday cited from the New Left Review the other day, which can be found here, certainly does nothing to disabuse me of this notion. On the contrary, Fraser only serves to reinforce this view.

        Anyone who would make the following statement as late as March 2009, as Fraser did, after Obama’s performance on TARP and his appointment of Geithner and Summers to the top economic slots in his regime, is not terribly perceptive:

        Certainly, the global financial crisis and the decidedly post-neoliberal response to it by leading states…mark the beginning of neoliberalism’s end as an economic regime. The election of Barak Obama may signal the decisive repudiation, even in the belly of the beast, of neoliberalism as a political project.

        But that’s just a start, because it gets worse. Much worse

        The intent of Fraser’s piece seems to be two-fold:

        1) To make sure that feminists play no active role in ending neoliberalism, in the belief that neoliberaism will somehow just go away by itself, and

        2) To discredit the feminist consensus that emerged out of 1960s activism.

        Fraser accurately sums up the later as follows:

        All told, second-wave feminism espoused a transformative political project, premised on an expanded understanding of injustice and a systemic critique of capitalistic society. The movement’s most advanced currents saw their struggles as multi-dimensional aimed simultaneously against economic exploitation, status hierarchy and political subjection. To them, moreover, feminism appeared as part of a broader emancipatory project, in which struggles against gender injustices were necessarily linked to struggles against racism, imperialism, homophobia and class domination, all of which required transformation of the deep structures of capitalist society.

        To which Fraser immediately goes on to say:

        As it turned out, that project remained largely stillborn, a casualty of deeper historical forces, which were not well understood at the time.

        Of course this last statement is not true at all. The reason the project was “largely stillborn” was not because of “deeper historical forces,” but because it was subverted and co-opted by the New Left and denizens of the ivory tower like Fraser.

        Here’s Robert Hughes’ scathing critique of the New Left in Culture of Complaint:

        Hence, in the universities, what matters is the politics of culture, not the politics of the distribution of wealth and of real events in the social sphere, like poverty, drug addiction and the rise of crime. The academic left is much more interested in race and gender than in class. And it is very much more interested in theorizing about gender and race than actually reporting on them. This enables its savants to feel they are on the cutting edge of social change, without doing legwork outside of academe; the “traditional left” has been left far behind, stuck with all that unglamorous and twice-told stuff about the workers. It is better to rummage around in pop culture, showing how oppressive structures are “inscribed” in some of its forms and “questioned” by others—-a process inseparable, of course, from the protean energies of capitalism, seeking to re-invent its oppressive self every day through popular culture in order to find new and better ways of turning us into docile consumers.

        Two problems with Fraser’s framing of the issues jump out at us. One, New Left feminism, despite what Fraser would lead one to believe, does not constitute the depth and breadth of feminism. While I’m no student of feminism, I’m quite sure that lurking around out there somewhere are still some who cling to traditional feminism, even though Fraser may choose to ignore them. After all, some feminists, unlike Fraser and her New Left cohorts, have to live in the real world and do not enjoy the luxury of being walled off in their academic cocoons. And two, Hughes published Culture of Complaint back in 1993, and it has taken Fraser until 2009 to wake up to the fact that the New Left was off on some mindless bunny trail. It has taken the New Left almost two decades to become aware of, as she puts it, “a capitalism so indiscriminate that it would instrumentalize any perspective whatever,” something that Hughes was fully cognizant of and warned of 16 years before.

        Fraser’s lack of perspicacity is certainly bad enough, but her mindless repetition of neoliberal shibboleths, coming this late in the game, places her way beyond the pale. Instead of critiquing what neoliberals do, she uncritically accepts what they say. And by doing this, and by mindlessly repeating neoliberal myths, she further propagandizes and perpetuates neoliberalism’s “capitalism and freedom” canard. Thus Fraser’s role seems to be that of a neoliberal Trojan horse deep within the feminist fortress. Take this from Fraser, for instance:

        In place of dirigisme, they [neoliberals] promoted privatization and deregulation; in place of public provision and social citizenship, ‘trickle-down’ and ‘personal responsibility’; in place of the welfare and developmental states, the lean, mean ‘competition state’.

        Where has Fraser been for the last 34 years? She has swallowed the libertarian fiction of “capitalism and freedom” hook, line and sinker. Didn’t neoliberalism’s true agenda become brilliantly clear in 1975 when Milton Friedman and Frederick von Hayek traipsed down to Chile to throw their unbridled and enthusiastic support behind the murdering military dictator Augusto Pinochet?

        Neoliberalism’s agenda has never been “capitalism and freedom,” but the imposition of a grotesque double standard. Neoliberals never “promoted” the things Fraser says they did, but instead promoted “deregulation” for the neoliberal over-class, and an authoritarian police state for everyone else; “personal responsibility” for the poor, working- and middle-class and abrogation of any and all accountability for the neoliberal overlords; “welfare” for well-connected corporations and austerity for the masses; a “lean, mean, ‘competition state’” for the hoi polloi and a nanny state for the corporate wards of the government.

        Fraser further reaffirms neoliberalsim’s Big Lie in her conclusion when she ruminates:

        To that end, let us return to the question: what, if anything, explains our ‘dangerous liaison’ with neoliberalism?….[I]s there, as I suggested earlier, some subterranean elective affinity between feminism and neoliberalism? If any such affinity does exist, it lies in the critique of traditional authority…. In the current moment, these two critiques of traditional authority, the one feminist, the other neoliberal, appear to converge.

        But Fraser gets it all wrong. New Left feminism is not mistaken in its “critique of traditional authority,” but in it’s unbelievable naïveté. Neoliberalism was never a legitimate “critique of traditional authority,” but an orgy of what Orwell called “Newspeak,” “doublethink” and “reality control.” New Left feminism failed to see through this ruse and the emergence of a new authority that was even more authoritarian and oppressive than the one it replaced. And perhaps this is so because the New Left is not so innocent. It’s never easy to tell the difference between incompetence and malice, but maybe the New Left is complicit in neoliberalism’s bait and switch because its own motives are not so pure.

        Martin Luther King, wedged between democracy and Black Nationalism, warned of this eloquently when he wrote in “Facing the Challenge of a New Age”:

        There is the danger that those of us who have lived so long under the yoke of oppression, those of us who have been exploited and trampled over, those of us who have had to stand amid the tragic midnight of injustice and indignities will enter the new age with hate and bitterness. But if we retaliate with hate and bitterness, the new age will be nothing but a duplication of the old age. We must blot out the hate and injustice of the old age with the love and justice of the new.

        King reiterated this warning years later in a commencement address he delivered to Lincoln University in Pennsylvania:

        As I have said on so many instances, it is not enough to struggle for the new society. We must make sure that we make the psychological adjustment required to live in that new society. This is true of white people, and it is true of Negro people. Psychological adjustment will save white people from going into the new age with old vestiges of prejudice and attitudes of white supremacy. It will save the Negro from seeking to substitute one tyranny for another.

        I know sometimes we get discouraged and sometimes disappointed with the slow pace of things. At times we begin to talk about racial separation instead of racial integration, feeling that there is no other way out. My only answer is that the problem never will be solved by substituting one tyranny for another. Black supremacy is as dangerous as white supremacy, and God is not interested merely in the freedom of black men and brown men and yellow men. God is interested in the freedom of the whole human race and in the creation of a society where all men can live together as brothers, where every man will respect the dignity and the worth of human personality.

        There will be no economic justice in the world until, as King put it, we “rise above the narrow confines of our individualistic concerns to the broader concerns for all humanity.” This philosophy stands at the heart of the feminist consensus that emerged out of the 1960s, the same consensus that Fraser and the New Left now find so woefully inadequate.

        Fraser does conclude her piece with some good advice:

        I am suggesting, then, that this is a moment in which feminists should think big.

        I agree. Feminists should “think big” by giving Fraser and her New Left cohort, which in practice is little more than a rearguard for neoliberalism, a swift kick in the ass. They need to be told, in no uncertain terms, to go sow their moral and intellectual confusion somewhere else. The feminist consensus that emerged during the 1960s is still valid. What are lacking are the moral conviction and the clarity and nimbleness of thought to see it through.

        1. G Miller

          Besides being impressed with Yves’ critique and the consistency in which it’s set forth, what brings me here every day for the last several years is the company that this blog attracts. Many, if not most, conversations on blogs dealing with political economy are either mindless retorts full of ad hominem attacks, invective, and/or talking points from one of the two parties. The free exchange of ideas that can and does arise here–with I realize very rare intercession by the moderator–is wonderful. Even if this post is a cross post from another wonderful blog, it still proves my point.

        2. JTFaraday

          No, you haven’t changed my mind. She’s right that liberal feminism and identity politics, as practiced in the US, have dovetailed nicely with a neo-liberal corporatist agenda. They are perfectly compatible and there is absolutely no friction there.

          Consequently, Americans have to learn to take the beast directly and stop pretending that other agenda can serve as adequate *substitutes.* Full stop.

          My complaint with her is that she’s still pandering to the delusions of the Obamabots, at least publicly, even after he picked his economic team– which was a pretty clear indication that there was zero regime change with the last election.

          But, perhaps this is attributable to the politesse required of leftist professors working with young people (and others) possessed of near-religious political beliefs. This is a failure that stems from her continued *allegiance* to the feminism and identity politics she’s looking to critique, not of her failure to scrutinize neo-liberalism to *your* satisfaction, which is not the purpose of the essay.

          I also think that she isn’t acknowledging the roles that states can play in protecting their own citizen populations, in a continued preference for a likely utopian post-nationalist framework in which the large multi-national corporations are going to be way out in front of the hypothesized global peasantry for quite some time to come. I don’t see why anyone should have to wait around for the hypothesized global nirvana.

          But, there again, she *is* a de facto pawn of the oppressor, as you eagerly point out. Coming out for a “statist” agenda on the left–as an American– is going to be hard to do without some liberal opportunistically reconstructing her still further into an unreconstructed right wing nationalist who should just be ignored like the bigots out in Arizona.

          While it would be nice if all leftist tenured professors were willing to fall on their swords all the time, they do have to show up to the liberal church in “appropriate” clerical garb, lest they find themselves the designated campus witch.

          You talk about the usurpation of religion to other ends all the time, but you seem to a bit blinkered about this one.

          If you want to add the larger “New Left” to the list of current traditional neo-liberal puppets, alongside liberal feminism and identity politics, I have no objection.

          1. DownSouth

            JTFaraday,

            Well you certainly paint with a broad brush. But like I said, Fraser and her New Left cohort do not constitute the depth and breadth of feminism and identity politics in the US. So I must disagree with your assertion. Fraser is not “right that liberal feminism and identity politics, as practiced in the US, have dovetailed nicely with a neo-liberal corporatist agenda.” And they are not “perfectly compatible,” there being “absolutely no friction there.”

            Perhaps no one expressed it better than Martin Luther King:

            This unity of purpose is not an historical coincidence. Negroes are almost entirely a working people. There are pitifully few Negro millionaires and few Negro employers. Our needs are identical with labor’s needs: decent wage, fair working conditions, livable housing, old age security, health and welfare measure, conditions in which families can grow, have education for their children and respect in the community. That is why Negroes support labor’s demands and fight laws which curb labor. That is why the labor-hater and labor-baiter is virtually always a twin-headed creature spewing anti-Negro epithets from one mouth and anti-labor propaganda from the other mouth.
            ▬Martin Luther King, Jr., “If the Negro Wins, Labor Wins”

            Let me make an unequivocal statement here: There will be no advancement for labor in the US as long as the neoliberals can balkanize labor by driving a wedge between different identity groups within labor.

            Perhaps a history lesson is in order here:

            The old Jacksonian resonances of Whig-Democratic conflict containing as they did still older rhythms of the Jeffersonian-Federalist struggle, were all but obliterated by the massive realignment of party constituencies that had accompanied the [Civil] war and its aftermath. The memories and even some of the slogans of ancestral debates still persisted in the postwar American ethos, but they no longer possessed a secure political home. Sectional, religious, and racial loyalties and prejudices were used to organize the nation’s two major parties into vast coalitions that ignored the economic interests of millions.
            ▬Lawrence Goodwyn, The Populist Moment

            But many of the battles surrounding identity politics have already been fought over the last 60 or 70 years. Just compare the comportment of labor unions today with how David Montejano described it a century ago:

            The position of most Anglo workers, if one judges from the statements and actions of organized labor, was completely unsympathetic to Mexicans. Not only were more Mexicans coming every year, reported one worried labor official to the AFL Executive Council in 1919, but they also were now moving out of agriculture and accepting employment in “different lines of efforts” to the detriment of labor standards and the best interests of the country. In Texas, the state chapter of the AFL refused to recognize the existence of a wage-earning class in agriculture, and its various affiliates made it clear that they would not work alongside Mexicans and that they opposed the hiring of unskilled Mexican workers. Texas oil workers, many of them ex-cowboys and ex-tenants, were likewise quite upset about the “immigrant increase” in the industry. At the convention of the International Oil Workers in 1920, the oil unions passed a resolution asking for “an investigation of the situation, the sending back to Mexico of immigrants illegally in the United States, and the return to agricultural work of those remaining.” In some oil fields, the tense situation exploded into riots against Mexicans. In 1921, oil workers in the Ranger and Island Oil fields in Mexia (North Central Texas) clubbed and threatened Mexican workers and their families with death unless they left within twelve hours. Governor Neff imposed martial law in Mexia and sent eighty state troopers to end the brutalities. The Rangers arrived too late, however, to save sever women and children from dying of exposure. This was no isolated incident; similar episodes occurred in mines and manufacturing plants through the 1940s.

            The overwhelming sentiment among nonfarm workers, organized and unorganized, was for the expulsion or regulation of Mexican workers. Already in the early 1920s, many unions in the Southwest had formulated “gentlemen’s agreements” to blackball all Mexican workers. Texas unions handled Mexican workers in much the same way that they dealt with blacks: through outright exclusion, through segregated locals, and through racial quotas in employment. As the decade wore on, these exclusionary proposals became more strident as organized labor joined eugenicist associations in decrying the “alien” danger that Mexicans posed for the nation. The political direction provided by the American labor movement pointed clearly toward maintaining skilled work as a preserve for Anglo workers. Especially in Texas, Anglo workers saw the “color bar” as an important concession to be won from employers.

            ▬David Montejano, Anglos and Mexicans in the Making of Texas, 1836-1986

            The new realities have forced the neoliberals to retool their rhetoric. No longer can they so easily drive a wedge between Whites and Blacks and Hispanics. They’ve had to find new wedge issues, for instance, between public sector workers and private sector workers, or between the employed and the unemployed. But the methods have not changed. Demonization and stigmatization, and everything that goes along with those, are still the preferred tactics.

          2. JTFaraday

            “Let me make an unequivocal statement here: There will be no advancement for labor in the US as long as the neoliberals can balkanize labor by driving a wedge between different identity groups within labor.”

            You can quote from the civil rights and 19th century populists bibles all afternoon. It doesn’t alter the strategic fact that in the contemporary US, liberal identity politics is primarily used to discipline leftists, labor unions, and critics of capitalism.

            It also systematically derails mass popular politics into mere issues of representation–like, say, a battle between D-Party members over whether Hillary or Obama (or McCain/Palin) get to front the neo-liberal regime:

            http://newleftreview.org/?view=2248

            Maybe you spend too much time eyeing up the libertarians and the Tea Partiers to know how this stuff works to discipline the so-called liberal left, transforming it into the handmaiden of the neo-liberalism that you claim to despise.

            I paint with a broad brush because the brush *is* broad. Down the road I may change my mind, when and if circumstances change, but a few more rounds of quotes of ancient sources from you is not going to change my mind today.

            The boldface type isn’t going to do the trick either. (I’ve been called a witch before).

          3. DownSouth

            JTFaraday said: “…the strategic fact that in the contemporary US, liberal identity politics is primarily used to discipline leftists, labor unions, and critics of capitalism.”

            There’s a great deal of truth in that statement. One has to look no further than who funds so many of the rock stars of identity politics—-e.g. the Rockefeller Foundation, the MacArthur Foundation, the Ford Foundation—-to get a gist of what’s going on here.

            Perhaps one of the best exposes of this was written by Peter Skerry in his book Mexican Americans: The Ambivalent Minority. The chapter is called “Protest Politics: Symbolism and Symbiosis.” In California, where Skerry conducted his study, the Chicano activists mostly operate from their sinecures in the state university system, putting together their “largely paper organizations.” They have almost no constituency and little popular support from the broader Hispanic community, because their pet issues and opinions are not those of that community. (Skerry marshals considerable polling data in another chapter, ”The State of Mexican-American Opinion”, to make this case.) But the protest groups do work hand in glove with their ideological soul mates, the Hispanic elite-network politicians, whose principle goal in life is to carry water for their wealthy benefactors. A well-timed protest with generous media coverage can give those politicians the appearance of popular support for their initiatives. In this way, the Chicano protest groups are not too terribly different from the Tea Party.

            But when you paint all Hispanics or all Blacks or all women or all Gays who speak out against discrimination with the same brush that you paint the professional protest politicians, I think you commit a grave injustice.

            In “Suffering and Faith” Martin Luther King wrote:

            Due to my involvement in the struggle for the freedom of my people, I have known very few quiet days in the last few years. I have been arrested five times and put in Alabama jails. My home has been bombed twice. A day seldom passes that my family and I are not the recipients of threats of death. I have been the victim of a near fatal stabbing…

            As my sufferings mounted I soon realized that there were two ways that I could respond to my situation: either to react with bitterness or seek to transform the suffering into a creative force. I decided to follow the latter course. Recognizing the necessity for suffering I have tried to make of it a virtue. If only to save myself from bitterness, I have attempted to see my personal ordeals as an opportunity to transform myself and heal the people involved in the tragic situation which now obtains.

            Needless to say, when the oligarchs choose someone from the Black community to bestow celebrity status upon, I hardly think they choose someone like King. Opportunistic or loaded down with emotional baggage are probably more in tune with what they’re looking for.

          4. /L

            DownSouth says:
            You identify the problem—-

            I read Bricmont as a analyis of how things have changed not a lost Shangri-La or that those times or Sartre was something to recreate today.

            The closest he come to advocate something is as I see it passages like this:
            There is very good work being done around Le Monde Diplomatique and the “global justice” movement Attac, as well as among successors of Pierre Bourdieu, but almost no progressive thought elsewhere , …

            There [europe] are no intellectual equivalents of Chomky, Herman, Zinn, Blum, Parenti, Petras, etc. There is very little alternative press of quality, and no websites comparable to CounterPunch, Znet or Antiwar.com.

            I have no wish to recreate injustices of the past, not because I believe what did go for progressives then was advocates of deferent blacks, that woman should stay at home, handicapped should be in the back room or gays in the closet.

            History is an complex issue to describe it 100% correct it have to be done 1:1 and that is not possible, by necessity history will be described by how we pick and choose.

            The advances of the mentioned groups do accentuates that the unemployment problem is a class issue and not an identity issue even I some groups are under and over represented.

        3. JTFaraday

          “Neoliberalism’s agenda has never been “capitalism and freedom,” but the imposition of a grotesque double standard. Neoliberals never “promoted” the things Fraser says they did”

          Nowhere does she say neo-liberals sought to promote freedom. What she does say is that leftist anti-statists, (including feminists, critical of state condoned patriarchy), had the goal of undermining the state toward the end of promoting freedom.

          She concedes that the primary outcome of anti-statism (or, anti-nationalism) on the left was to help facilitate the objectives of the neo-liberals who actually managed to gain real power in the US.

          This is why I disagree with her continued pandering to the post-nationalist global fantasy. I like my government. I just want to take it back.

        4. /L

          The problem is gross imbalance on the labor market there is no trick in the world that would remedy the situation if the overall situation is that employers can pick and choose. That’s the core issue and not least for those who are weak on the labor market not least minority groups. That is what’s wrong with the left, they are so engaged in the symptoms and ignore the core issue. Why one can ask, the obvious is that challenge the mighty money interests is a very dangerous journey the price can be very high. To chatter on about identity politics is 100% risk free. Capitalism isn’t racist, homophobic, misogynist or xenophobic. Capitalism doesn’t give a dammed what color, sex etc it exploit as long as the money is green.

          The neoliberals say they despise the state and hate Keynes but use the state fiscal and monetary politics to keep labor in check and as Keynes learned the world demand is what rules the economy. Keep the demand a bit below potential capacity and there will be unemployment.

          To spread equality and welfare a little bit to all of the citizens is only possible to do in one way, to have an overall slight lack of labor. We should have learned that during the postwar boom years when the equality and welfare did rise among the broad layers around in OECD. That is what give minorities and so on an intrinsic value, their services and labor will be in demand, not because someone is magnanimous and think its righteous and nice but because they have an economic value.

          1. DownSouth

            /L,

            You identify the problem—-gross imbalance on the labor market—-but what is your political program for resolving it? The underlying problem, after all, is political. Is your proposed solution a more militant, more violent labor movement, purged of all ideological impurities, so that class war is the unitary objective?

            That is what Jean Bricmont advocates in the article you linked, The Moral Collapse of the Moral Left.

            Brichmont longs for a past when “the two wings [the communists and Gaulists] were helping each other.” “Even the communists and Gaulists, for all their rhetorical differences,” he tells us, “were in practice quite close to each other: both were in favor of decolonization, a strong social state and an independent foreign policy.”

            Brichmont reminisces of the halcyon days of a pre-1981 world:

            Thus, the first problem of this value oriented left is that, for all its talk about democracy and human rights, it has effectively emptied democracy of its content and made practically illegal the economic policies of the old left that had created, by the end of the seventies, a relatively peaceful, well educated and tolerant Europe.

            He bemoans other “problems” with the direction the left has taken:

            In particular, one may hope that racism will regress if people are better educated, mix with each other and feel secure. The role of government is to make these things possible, not to tell the populace how evil racism is…

            [O]nce the Left went into the “value” game, the Right did so too and much more effectively. Most people prefer to hear discourse about restoring authority, family value and patriotism to being told that their private thoughts about women, foreigners or gays, which may very well not be politically correct, are responsible for all sorts of horrors.

            Bricmont concludes by lamenting the marginalization of the modernist brand of left-wing politics he prefers:

            A further problem is that, partly as a result of this shift towards values, the intellectual left is in a terrible state in France. Those who remember Sartre, or even Foucault, as the dominant French intellectuals, may not always realize how much things have changed… [T]here are very few rationalist philosophers—-the right wing ones being the human rights crusaders and the “left-wing ones” being postmodern in one sense or another.

            /L, I have to question why you and JTFaraday engage in the dissemination and defense of articles like these by Bricmont and Nancy Fraser. Their only purpose, after all, is to sow moral and intellectual confusion.

            To begin with, the pre-1981 Shangri La described by Bricmont wasn’t a Shangri La for everybody. Many people were excluded from his imaginary bliss. Carrying us back to an era when blacks stayed deferent, women stayed at home, the handicapped stayed in the back room and homosexuals stayed in the closet is a political initiative that is bound to meet with overwhelming opposition. In my opinion, it is a nonstarter.

            Secondly, while many of the goals of the Gaulists and the communists were the same, as Bricmont duly trumpets, the difference was not so much in the ends they strove for, but in the means advocated to achieve those ends. Martin Luther King explains in “Love, Law and Civil Disobedience”:

            I would say that the first point or the first principle in the movement is the idea that means must be as pure as the end. This movement is based on the philosophy that ends and means must cohere. Now this has been one of the long struggles in history, the whole idea of means and ends. Great philosophers have grappled with it, and sometimes they have emerged with the idea, from Machiavelli on down, that the end justifies the means. There is a great system of thought in our world today, known as communism. And I think that with all of the weakness and tragedies of communism, we find its greatest tragedy right here, that it goes under the philosophy that the end justifies the means that are used in the process. So we can read or we can hear the Lenins say that lying, deceit, or violence, that many of these things justify the ends of the classless society.

            Bricmont bewails the fact that “those who remember Sartre…may not always realize how much things have changed.” Sartre! Imagine that! Of all people, Bricmont wants to resurrect Sartre! “Sartre, who in his preface to Fanon’s The Wretched of the Earth goes much farther in his glorification of violence…than Fanon himself, whose argument he wishes to bring to its conclusion,” as Hannah Arendt describes him in Crises of the Republic.

            The fact that Sartre’s advocacy of violence had no precedent in either Hegelian or Marxian thinking was of no import to Sartre or the New Left. “To shoot down a European is to kill two birds with one stone,” Sartre wrote, “there remains a dead man and a free man.” “This is a sentence Marx could never have written,” Arendt observes.

            Sartre’s celebration of violence did not resonate with the masses, but it did resonate with the New Left, as Arendt goes on to explain:

            The pathos and the élan of the New Left, their credibility, as it were, are closely connected with the weird suicidal development of modern weapons; this is the first generation to grow up under the shadow of the atom bomb. They inherited from their parents’ generation the experience of a massive intrusion of criminal violence into politics: they learned in high school and in college about concentration and extermination camps, about genocide and torture, about the wholesale slaughter of civilians in war without which modern military operations are no longer possible even if restricted to “conventional” weapons. Their first reaction was a revulsion against every form of violence, an almost matter-of-course espousal of a politics of nonviolence. The very great success of this movement, especially in the field of civil rights, were followed by the resistance movement against the war in Vietnam, which has remained an important factor in determining the climate of opinion in this country. But it is no secret that things have changed since then, that the adherents of nonviolence are on the defensive, and it would be futile to say that only the “extremists” are yielding to a glorification of violence and have discovered—-like Fanon’s Algerian peasants—-that “only violence pays.”

            The saving grace was that in the West, much to Bricmont’s regret evidently, the New Left became marginalized. Other than in small holdouts to be found on college campuses or in professional protest groups, the masses rejected Sartre’s and the New Left’s use of violence.

            Where Sartre and Fanon were to have much greater influence, however, was in the Muslim world. Islamic fundamentalists were quick to embrace Sartre and Fanon’s political philosophies. Here’s how John Gray puts it in Al Qaeda and What It Means to Be Modern:

            The idea of a revolutionary vanguard dedicated to bringing into being a world without rulers or ruled has no precedents in Islamic thought. It is a clear borrowing from European radical ideology… As Malise Ruthven has written: “[T]he revolutionary vanguard Qutb advocates does not have an Islamic pedigree… The vanguard is a concept imported from Europe.”

            Much more on Sartre’s and Fanon’s influence on Islamic militants can be found in Adam Curtis’ documentary film The Power of Nightmares: The Politics of Fear which can be viewed on the internet here. As Curtis explains, Sartre’s and Fanon’s philosophy of violence never gained popular support on the Arab street, but it did sweep through radical Islamic circles like wildfire. As Curtis goes on to document, the world, and especially the Islamic world, paid an extremely heavy price for this philosophy of violence that was imported from the West.

            The recent uprisings in northern Africa and the Middle East, and the fact that it was the philosophy of nonviolence and not of violence that triumphed to inspire and galvanize the masses, highlights just how marginalized the philosophies of Sartre, Fanon and the New Left have become. This was the only remaining region of the world where any possibility of a violent revolutionary vanguard had been kept alive. For Bricmont and the New Left, the weeping and wailing and tearing out hair can now commence in earnest.

    2. DownSouth

      Rex said:

      Just because Marx or his biggest practitioners didn’t live to see capitalism’s demise, doesn’t exactly ensure it won’t happen. Is there any major social organization in history that hasn’t collapsed after a period of time?

      I’m not sure the cure you invoke isn’t worse than the disease. As Carroll Quigley wrote in The Evolution of Civilizations:

      Thus individualism, the natural equality of all men, the conventional and unnatural character of slavery, and the belief that social distinctions rested on force rather than on real differences because generally accepted in the Stage of Universal Empire [of Classical Civilization], but without in any way destroying the continued existence as institutions of slavery, social inequality, law, or public authority. Of course, in the very long run, with the disappearance of these institutions it might be argued that the ideas that challenged them won out, but this occurred only with the death of Classical society as a whole.

      1. DownSouth

        Oops!

        because generally accepted in the Stage of Universal Empire” should read “became generally accepted in the Stage of Universal Empire”

        1. paul tioxon

          The new left made the critical and revolutionary contribution to the political discussion, that the real choices were once again 3 fold. Up until 1968, there was one dominant position, liberalism, which recognized the need for change, and managed whatever measure of it there was under the banner of progress. There was one other discredited position, conservatism, which saw every need for the enforcible obstacles to political and economic power sharing, with any un American trend in the social order. Exploding onto the scene, were radicals whose motto is we want the world and we want it now!!!

          If not now, WHEN? If not here, WHERE? If not us, THEN WHO WILL MAKE THE WORLD THE ONE THAT WE CHOOSE??? There are no kings or popes in America to bow down to, no amount of wealth that the state can not raise in greater amounts than all of the billionaires together, no ideology to stop a pragmatically enlightened and well educated middle class in waves of 10s of millions of baby boomers, who out number everyone in our democratically controlled, vote with yr feet and paycheck republic.

          If the only legitimacy granted to the rulers was their right by merit, how smart they were, as evidenced in their Ivy League bona fides, then they were no better qualified than me and everyone else I know with dean’s list letters and diplomas to set public policy. Furthermore, rationally guided progress was lead by the world changing product of the university system, empirical inquiry and valid knowledge: SCIENCE. And science turned its eye upon every aspect of human behavior, and every tribe and society. It found all social orders were familiar to us upon examination, and NOT irrational sets of alien, incomprehensible actions. Our social order can change, dramatically, and not fall apart at the seems, but merely be a new learned set of behaviors.

          The hallmark of liberalism, a rationally led science of human progress, did not have to be managed at a glacial
          pace when it came to justice in the political economy, because JUSTICE DELAYED… IS JUSTICE DENIED. And with this historic phrase, liberalism was unmasked as a distinction from conservatism without a difference. Just be patient, there is light at the end of the tunnel. Unfortunately, as New Yorkers have sadly learned, that light is only New Jersey, not real change at all.

          1. DownSouth

            Paul,

            I’m pretty much in agreement with what you have to say. However, I’m a little bit more optimistic. I hope we can do better than present-day New Jersey. (I say “present-day,” because I have hopes for New Jersey too.)

            And yes, conservatism is probably with us to stay, but I think it’s about time we read liberalism its last rites. In a postmodern world, I just don’t see how the conformity that liberalism demands is sustainable.

            Here’s how Stephen Toulmin put it in Cosmopolis:
            Before Kennedy’s time, politicians thought of their issues as resting on matters of technique. They took for granted the goals of national politics, and argued about the best means of fulfilling them… After 1965, this changed: aside from the Vietnam debates, the 1960s saw a move away from a politics of national goals—-which aimed at consensus—-toward a politics aimed at redressing traditional injustices, driven by a confrontation of sectional interests. In the 18th and 19th centuries, the upper (“respectable”) classes had assumed that the varied and numerous lower (“unfortunate”) classes “knew their places,” and could, if necessary, be kept in those places by social pressure of some kind.

            Now, all these classes began to speak up for themselves, in distinct but concerted tones. In theory, the interests of NAACP, La Raza, the Grey Panthers, and the Gay and Lesbian Alliance, were anything but identical: in practice, they united in opposition to those structural rigidities that “respectable” people had viewed as inevitable preconditions for a stable social order. There followed a sequence of assaults on the inequalities entrenched in European society around 1700, and legitimated by the new cosmopolis. Institutionalized racism, a flagrant injustice left long unaddressed, was the first to become a target of the civil rights movement. This was followed by others. Throughout the 1970s, all the inequalities built into modern society came under attack in turn: women, the elderly, the handicapped, lesbians and gays, all spoke up, one group after the other. Those who never questioned the rights and wrongs of modern nationhood found it a terrible shock. Jesus said, “The poor ye have always with you”—-i.e., deserving objects of charity are always near at hand. Now, many believers in “traditional values” understood Him to mean, rather, that it is the business of the poor to stay poor, of blacks to stay deferent, of women to stay home, of the handicapped to stay in the back room, and of homosexuals to stay in the closet.

  6. financial matters

    Nice post, I esp thought these comments were interesting..

    “””But older-school economists would have recognized that sustained trade deficits meant that US stimulus, including monetary policy measures, would leak into foreign demand.”””

    ”’Given the inability of the dollar to serve as an adjustment mechanism, we are consuming too many imports, but instead of US policymakers addressing this global development, we created a number of unsustainable domestic imbalances'””

    They seem to support Michael Pettis’s views of the burdens of having the USD as the primary world reserve curreny..

    http://mpettis.com/2011/03/the-dollar-versur-the-rmb-and-the-euro/

    “””The US would also borrow less because a lower trade deficit would require less fiscal or household borrowing to maintain any given level of growth and employment.”””

    “””But very few other countries can absorb the US trade deficit. In that case countries that rely on large current account surpluses to absorb their excess capacity would be forced into reducing their surpluses and reducing their capacity. Their growth, in other words, would be lower.”””

    “””The US, on the other hand, would be “forced” into either higher growth or lower debt levels. This does not seem either like a good thing for surplus countries or a bad thing for the US.”””

  7. kevin de bruxelles

    The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company’s rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.

    On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.

    1. rd

      This assumes that an organization going through a rational process.

      In many cases, layoffs are mass events where entire groups and divisions are whacked. Some companies sift through that and pull out their best performers for re-allocation, but many good people are released anyway. also, many people are told that they must move to keep a job. They may not want to do that, so they are terminated even if they are a very good worker.

      Layoffs also often indicate that labor was misallocated in the first place. Many of the laid off people may heve been forced into jobs for which they were poorly suited in the first place simply because that was the owrk available. As new jobs arise out of the ashes, they are often different from the previous boom. Their skill sets may be better suited to the next boom. I suspect that a decade from now, many people in the financial sector are going to be able to experience this effect first-hand.

    2. rd

      BTW, recessions and layoffs are one of nature’s ways of managing the Peter Principle and Parkinson’s Law.

      1. F. Beard

        No. According to Karl Denninger, recessions are necessary with usury since it requires unsustainable exponential growth.

  8. Doc at the Radar Station

    Yves, an excellent overview of our problems, and you hit the nail on the head multiple times throughout your essay-especially the emphasis on the problems of consuming more than we produce and the importation of deflation through the trade deficit.

    You mention here: “…Whereas in the stone ages they’d hire a competent-seeming individual with some relevant experience, they now look for people who have done exactly the same job at a similar company. This overly narrow hiring spec then leads to absurd, widespread complaint that companies can’t find people with the right skills. That’s bunk…” I’m noticing the same phenomena. Is it because employers are chronically understaffed and overworked, and they are too lazy and tight with money to train? …or has the entire society become overspecialized to the point where it is a net negative? I’m thinking about all the expenses of ‘formal’ training at school, outside of employment and the opportunity costs that are adding up in aggregate. If we hired people with more generalized skills, with less formal education outside of employment, and then nurtured them after hiring, wouldn’t this be a big net boost?

    1. Rex

      “If we hired people with more generalized skills, with less formal education outside of employment, and then nurtured them after hiring, wouldn’t this be a big net boost?”

      That pretty much describes my career, which was rather successful. As I grew, I was happy to share my knowledge with new people and watch them evolve. But most of that was back when most companies had goals regarding what they might accomplish over several years or more, rather than just keeping wall street happy on a 90-day cycle.

    2. Timo

      This is not a US-only phenomenon (unless you count the UK as the 51st State) but something I”ve been seeing in my field (Financial Services IT) both all over the place and as a growing trend. Employers are speccing out jobs so only people who’ve done the same exact job at another place with exactly the same tools would qualify and then hand the spec to recruiters who have no technical expertise to judge a candidate’s skills and who were probably selling double glazing the week before[1].

      As someone who tends to get involved in hiring from a technical perspective, I do believe that this is a worrying trend not only from the perspective of giving people who are unemployed a chance to get back into the job market, but also does long-term damage to the employee’s skill set (and thus the long-term viability of both their career and the employer’s business). I tend to see this as actively inhibiting the viability of continued (self-)education as a means to improving one’s career chances and potentially getting a better job in the long run. In fact, there are a lot of jobs out there where additional knowledge over and above the exact requirements gets you the ‘overqualified’ stamp on you resume, which then ends up in the round filing cabinet.

      That said, smaller companies are probably a bit more willing to compromise on this – my current employer certainly is when it comes to software developers – but overall this is a very bleak picture we’re looking at.

      [1] For those unfamiliar with UK terms, that would be a profession slightly less reputable than used car sales people.

    3. JTFaraday

      “they now look for people who have done exactly the same job at a similar company.”

      Whenever I see something too specific, I assume the hiring manager has an internal person they want to hire but is running an external search to satisfy HR.

      I also think this tendency to assume they’re going to hire someone with x-y number of years already doing the same/ a very similar job is a testament to stagnation, that people in certain kinds of occupations simply *are not* going to move up the food chain. They’ll be making the lateral move of their lives for the rest of their lives.

      Thus, *hordes* of midlife career changers, another new trend of the past 20 years or so. This is one reason why I do not believe the unemployed are *literally* unemployable, despite the fact that many want them to believe they are for their purposes.

      Thus, while you do need a good story about what it is you’re up to, I think it was much more stigmatizing to be unemployed 20 years ago, despite the current loudmouthed political opposition to doing anything that addresses the collective bad job market.

      And certainly, so-called “career advisors” in the business press are fully part of that political opposition. So, I take them with a big grain of salt.

      1. JTFaraday

        “people in certain kinds of occupations simply *are not* going to move up the food chain. They’ll be making the lateral move of their lives for the rest of their lives.”

        If these *paid* better, they could just stay put, but they don’t and conventional wisdom has it that to make more you need “to move.” There isn’t necessarily any place to “move” to.

  9. Jim the Skeptic

    “Whereas in the stone ages they’d hire a competent-seeming individual with some relevant experience, they now look for people who have done exactly the same job at a similar company. This overly narrow hiring spec then leads to absurd, widespread complaint that companies can’t find people with the right skills. ”

    This is a terrible problem. Just more evidence of absolutely incompetent American management.

    The military recruits people without any training or experience in the Military Occupational Specialty which they will work. They select recruits into MOSs by their aptitude test results. Then they provide formal training, and continue training as the recruits reach their permanent units. They have people working in very broad range of very technical fields and the job gets done.

    Contrast that with the post’s paragraph above and the constant whining by American civilian management.

    My employer could not compete on salary. They hired people straight out of school or working in a somewhat related field, and gave them On the Job Training (OJT) to get them up to speed.

    If you don’t want to train, then expect to pay more for that employee who you want to quit his current job.

    1. Rex

      That kind of thinking is great, on principle, but it comes from the old days where companies were focused on creating stuff and making things. That is old school. Nice short-term profits were to be gained from dismantling most of that and walking away proud from the easy money that could be had.

      Most of the US economy has become a shell game and we have been in a Wiley Coyote cartoon, where he walks off the cliff but until he looks down, he doesn’t start to fall. I think the popping of the last bubble has us starting to realize there has been nothing much under us for a number of years.

      Instead of a social structure, we have a big card game. Little new money comes in, but nobody can leave the table, and a few big chip holders get to change the rules as we are playing.

  10. Stock Holmey

    Wow – some of us are giving Corporations far too much credit.
    “We only hire someone who has the right skills and training” This is neo-liberal bullshit that deflects away from the primary overiding mission, which is profit. Companies will only hire if they see getting a warm ass in a seat will support this prime directive. Companies like to hire for any other reason. The folks that work in the companies continue with their role as cheerleading the fact that “only the best, only the brightest” and so forth are to be employed.
    The problem I continue to have with this blog is that their is some supposed seperation of authority – “The Fed” as if the same folks are a “separate entity” from corporate power. As if the tame punditry from the likes of Paul Krugman is the only useful critical information we can use to evaluate this dreadful condition. I insist that these pundits are part of the problem, they will never attack deliberate, well planned assaults on workers. They will continue to word-process while cities burn, reminding us of the differences between political parties.
    They will casually call out some public officials and will never question their authority. You are at-will and you will love it. (The Washington Post, brought to you in part by Raytheon, let our missles rain down on our enemies.)

  11. Ignim Brites

    Employment was very high during most of the 90s and the 00s. This includes the large number of women who were absorbed into the labor force during the time. Not sure how this squares with the preceding discussion.

  12. Nimrod

    Congressman Raul Grijalva recently introduced a bill to ban discrimination on the basis of employment status. Not that it will do any good even if it passes…

    1. Jojo

      Agreed. It is the same with age discrimination.

      Companies advertise for “recent college graduates”, “someone early in their career”, someone with 1-3 years experience preferred”, etc.

      This is blatant age discrimination but the EEOC does nothing about it.

      it would be better to remove all age discrimination laws in hiring (but NOT for firing). That way, at least you would know not to waste you time putting together the paperwork and bidding on the job!

  13. craazyman

    After a While You Just Get Sarcastic

    But you’ve got to watch it or else you just fall into your own pool. I know I have. About 10 years ago I was in a rough transition and looking for a job. I’d get interviews and would show up and there’d be this corporate sheep or neurotic bimbo on the other side of the desk, asking about my background.

    It became clear the job was about as hard as shining shoes. and it also became clear that experience shining brown shoes wouldn’t cut it. You needed to have shined black shoes, and you needed experience with certain shoe styles. You also needed to be able to suppress any intelligence or imagination that might produce true insight and lead to enhanced quality of work. That might embarrass other people, especially your supervisor.

    Thank God I’m not there anymore. But I remember the searing bewilderment and cynical conclusions that nothing really mattered except the possession of a narrow experience, and that ability, quality, intelligence, dedication to task, craftsman pride in your work, integrity, ethics, flexibility, potential — none of it.

    Granted, these weren’t upscale 7 figure I was going for. But those aren’t the jobs most unemployed people go for. And what was also clear was that the farther up the management scale, the less anything important really mattered. And then eventually, at the top, nothing really mattered except the possession of a facile ability to loot and plunder and navigate meetings and back stab and glad hand. I suppose that’s a talent of sorts. ha hahah.

    If you get too cynical then you lose your way completely. Somehow I didn’t go over the edge, even though it might seem like it. I was close, I admit. So I can see why people do go over the edge, especially when they have to read the driviling shit in the news about corporations not finding the right “talent” for their shit shoveling. :)

  14. Middle Seaman

    Fortunately, I worked, employed and self employed, all my working life (about 45 years). My experience in seeking work is limited to periodic contracts as an expert witness and even then, I did not initiate the process. The contacting person almost without exception was looking for a perfect match between the person’s understanding of the task and the person understanding of my skills. (Both understandings in the last sentence have very little to do, in many cases, with reality.) The fact that my record was stellar and unblemished and my skills a good match to their real needs was of no interest to the person.

    My explanation was that the market place has a very narrow view of skills. The market, at least in the US, tends to require a perfect fit between the needs for skills and the skills offered by a person. If the person’s skills are wider than the needs, it’s not a match. If the skill is closely related, it’s not a match at all.

    I thought, we have a cultural deformity involving skills.

  15. F. Beard

    Before, there had been an explicit agreement between unions and employers embodied in the so-called Treaty of Detroit, which was that workers were to share in productivity gains. Yves

    Imagine for a moment that we had NOT had a government enforced and backed counterfeiting cartel, the fictional [sic] reserve banking system. How would corporations have financed themselves? Might they not have been forced to issue new common stock to buy assets including labor? And if so, would not workers have automatically shared in productivity growth? Would they not have had a say in job outsourcing?

    Conventional money is an unnecessary and expensive medium of exchange that serves to transfer and concentrate wealth rather than justly share it. It probably cannot exist for long without government privilege. (The free market would not tolerate the high interest rates for one thing).

    Get government out of the private money business and many social problems should wither away automatically.

  16. San

    The Bush tax cuts are still in place. Where are the jobs? We could haul every CEO in front of Congress or the President to state how many jobs they’ve sent offshore. Last time i looked at a W-2 form, the corporate name was stamped in the lower left hand corner. It takes Uncle Sam about 3-5 days to calculate the withholding tax, and that, folks, is as long as it takes to calculate the unemployment rate in the US.

    Given that Alan Greenspan, puppet for the Rothschild family, chirped “health sciences” as the only jobs left in the US, I propose that a registered nurse license be a mandatory part of a high school diploma. That would dampen the Fed power to have banks be feudal overlords. Make every high school student graduate with an RN license; they’d be instantly employable, it would put the student loan programs out of business, along with textbooks and college scams. High chools that wanted to expand on the RN license and offer x-ray tech, physical and respiratory therapy, and other skills could do so.

  17. NoniMausa

    @attempter “Workers create all wealth. Parasites have no right to exist.”

    I agree heartily with the first part of this, only somewhat with the second part.

    There will always be non-workers in human communities because, in groups, we can create FAR more value than we can individually use. Half our population does not work, or not much — the young and the elderly and the disabled make up roughly half in most modern societies.

    As we progress in technological and organizational ways, this number could be even less. In the 50s, only 50 odd percent of the working age population were employed and all the work seemed to get done then.

    As long as “parasites” are seen to be people who can’t find paid employment and must be supported by the charity of others, I will politely disagree. These people are comparatively cheap to support and will always be with us. Their support costs about 1/4 to 1/2 of the median income, M.

    The real parasites suck up many times M, in some cases hundreds or thousands of M. Then they have the gall to turn around and claim they are the source of all our Ms, and we’d better be nice to them or we won’t get any. THOSE are the parasites I’d like to target.

    Noni

    1. attempter

      I would’ve thought it was obvious that the parasites I refer to are those who extract without performing any work: corporate executives, politicians, most government officials, media scum, many academics, all the flunkeys and thugs of the corporate system.

      Clearly I didn’t mean children or the unemployed.

      As for the surplus, there’s no reason for it to exist beyond reasonable grain stores in case of a bad harvest, and similar safety caches. Beyond that, we should take the extra time freed up by labor-saving techniques and devices and use it to live as human beings.

      That’s the fundamental Big Lie of capitalism. The fundamental evil of it. Labor-saving became an assault on humanity instead of our liberation. Those responsible for this infinite crime should be dealt with accordingly.

  18. Dave

    “Before, there had been an explicit agreement between unions and employers embodied in the so called treaty of Detroit, which was that workers were to share in productivity gains.” Yves

    Since productivity gains are largely realized by investment in new technology or equipment by the company which is financed by profits, the stockholders, or loans, why should the workers share the benefits? If the productivity gain was due to the increase in skills of the worker, then they would be paid more. There is more demand for highly skilled workers who are usually in short supply.

    Perhaps this may be a root cause of our economic problems? Rather than improving themselves, workers are using unions and government to force steadily increasing wages and benefits upon the employers. This in turn forces businesses to increase their investment in new equipment or technology in order to reduce their labor expenses. A vicious cycle in action?

    1. F. Beard

      Since productivity gains are largely realized by investment in new technology or equipment by the company which is financed by profits, the stockholders, or loans, why should the workers share the benefits? Dave [bold added]

      Those “loans” are actually new money (credit) created by the fractional (fictional?) reserve banking system. The purchasing power for that new money comes from all money holders including the workers. The workers are literally put out of work with their own stolen purchasing power!

    2. F. Beard

      Rather than improving themselves, workers are using unions and government to force steadily increasing wages and benefits upon the employers. Dave

      First of all, workers do improve themselves, it is called experience. But as far as using government to force higher wages, why not? The bankers and corporations use government to enforce the counterfeiting cartel so why shouldn’t the workers use government to enforce higher wages?

      This in turn forces businesses to increase their investment in new equipment or technology in order to reduce their labor expenses. A vicious cycle in action?
      Dave

      It is a vicious cycle, but it started with the government backed usury and counterfieting cartel, the root of all sorts of evil.

    3. davver

      Let’s say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I’ve simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?

      Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don’t feel like they were cut down in any way, they are just happy to have a job. Before they couldn’t get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won’t I go out of business?

      1. F. Beard

        You ignore the fact that you may have automated with the worker’s own stolen purchasing power via the government backed money cartel. Will you now cut their wages so they can keep their jobs?!

        It all goes back to our money system which originated in fraud (“Your deposit is available on demand even though we lent it out”) and whose very business model is to steal purchasing power.

        Why is it so hard to understand that a system based on theft would lead to social problems? The workers were replaced with their own stolen purchasing. How is that just? It isn’t.

        We will either learn to do capitalism ethically or continue to suffer serious consequences.

        1. davver

          Alright, fix the monetary system. People can still make capital improvements with a different monetary system.

          1. F. Beard

            People can still make capital improvements with a different monetary system. davver.

            Hopefully they would, but without counterfeit money under the guise of “loans”.

            Then the options for finance would be genuine loans at genuine interest rates, the company’s own savings, or equity sharing.

    4. DownSouth

      Ah yes, the long promised, but perpetually elusive, merit system. So how do you propose that your utopian distribution of resources be achieved? Let me guess: by “the invisible hand.”

      As Michael Allen Gillespie explains in The Theological Origins of Modernity, such a view is only possible with the transference of what hitherto were considered divine attributes to nature:

      Nature is an embodied rational will; the social world is governed by an “invisible hand” that almost miraculously produces a rational distribution of goods and services.

      [….]

      Moreover, while this transference does serve to moderate and ultimately eliminate the expressly theological debate that had been so contentious and violent, it also conceals the theological nature of the claims made by the contending parties. They thus cease to be disputable theological assertions and become unquestionable scientific or moral givens.

      So what was the ultimate goal of all this pseudoscience?:

      • The greatest significance of Adam Smith to the economic history of the world was not in any power of economic explanation but in offering a “scientific” doctrine by which the many losers from all this radical change could be persuaded to accept their fate without active revolt—-an act of rebellion against the market that in many cases might have been to their individual advantage.
      ▬Robert H. Nelson, Economics as Religion

      • Historically, rhetorical analogies between nature and society have too often been used to legitimate inequality and domination. The function of cosmopolitical arguments is to show members of the lower orders that their dreams of democracy are against nature; or conversely to reassure the upper class that they are superior citizens by nature.
      ▬Stephen Toulmin, Cosmopolis

      The critics and enemies of democracy and of the whole Athenian way of life with its emphasis on change, commerce, and social equality formed a motley bloc made up of the philosophic realists, the conservatives and rationalists, especially the Pythagoreans, the defenders of nobility, of oligarchy, and of the state’s authority, the admirers of Sparta, and the enemies of science… The greatest figure in this group was Plato…

      [….]

      There were three basic ideas of this oligarchic group: (1) that change was evil, superficial, illusory, and fundamentally impossible; (2) that all material things were misleading, illusory, distracting, and not worth seeking; and (3) that all rationally demonstrable distinctions, including those in social position (especially slavery), were based on real unchanging differences and not upon accidental or conventional distinctions. These three ideas together would serve to stop all efforts at social change, economic reform, or political equality.

      These ideas, which we might sum up under some such comprehensive term as Pythagorean rationalism, were, of course, not irrational, yet they led, ultimately, to mysticism and served the same purpose of providing an ideology for the vested-interest groups that irrational thinking usually does in the Age of Conflict of any civilization. In the Age of Conflict of Classical antiquity these ideas generally triumphed, although they were challenged, generally with little effect, by the later Aristotle (after 343 B.C.), by Epicurus and Lucretius, and by numerous minor thinkers in the late Hellenistic and Roman periods.
      ▬Carroll Quigley, The Evolution of Civilization

  19. Siggy

    The stigmata of unemployment is real just as the stigmata of being homeless is real.

    Skill requirements are, more often than not, an excuse or cover for a denial of employment for what are entirely irrational criteria. Discrimination, for all the equal opportunity propaganda is alive and thriving. Even so there is this undiscussed problem. We have a surfeit of available labor. What we truly lack is the creativity to provide employment to all who seek it. Employment that is productive and contributory to the society as well being as well as the welfare of the individual.

    Full employment is not happening because there is a standard of living differential between the US and the rest of the world. Look at the trade statistics, relative to Germany and France we have a near equilibrium of trade. Relative to the developing world and Asia we have an imbalance that is entirely attributable to labor cost arbitrage.

    The unemployment problem begins with an excess supply of labor, a distorted worth of the currency and the canard that the Fed, the Congress and the Treasury can manipulate the economy and set things right.

    1. F. Beard

      The unemployment problem begins with an excess supply of labor Siggy

      There is plenty of work to be done or have we reached Utopia? The proximate cause of our problems is extreme wealth disparity. The ultimate cause is an unjust money system.

  20. Escariot

    FWIW I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields. We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers.

    It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.

    Strangely I don’t sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way.

    Health insurance? Retirement accounts? not so much.

  21. Mickey Marzick in Akron, Ohio

    Yves and I have disagreed on how extensive the postwar “pact” between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this “pact” may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production. Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South “unions” were the exception not the rule.
    The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too…

    In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It’s a constant reminder for those still working that you could be next – cast out into the darkness – because you “failed” or worse yet, SINNED. This internalization of the “inner cop” reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren’t, both of which work against the formation of any significant class consciousness amongst working people. The “oppressed” very often internalize the value system of the oppressor.

    As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.

    It’s the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA – no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employemnt blunted the formation of class consciousness among white ethnic industrial workers.

    Wherever the postwar “pact of domination” between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the “rustbelt” now it’s a nationwide phenomenon. Needless to say, the “pact” between labor and management has been consigned to the dustbin of history.

    White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it’s unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.

    Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This “quiet violence” is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It’s the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept “unemployment” as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!

    FULL and GAINFUL EMPLOYMENT are the ultimate labor power.

    1. Eric

      The part of this analysis about the geography of production in the first 2/3 of the last century is spot on. Once the national transportation was more evenly developed and once a wide variety of production tasks were automated to the point of a diminished need for certain particular individual skills, Tennessee, South Carolina etc became just as good a place for factory location as NE Ohio…better in fact for profitability.

      1. Mickey Marzick in Akron, Ohio

        Down

        Thanks! I actually sat down and took the time to watch watch it! I would recommend it…

        When/how reason and science were coopted/perverted on behalf of ruling elites – capitalist and/or socialist – is the question? SYNDICALISM may be the only hope…

        Vaya con Dios y tenga suerte, mi hermano!

      2. Skippy

        In a nut shell eh DS, eugenics + mysticism + ethnic quasi racism = dearth for us and any other living thing on this planet.

        Skippy…thank you and I will be going viral with it.

  22. Eric

    It’s delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn’t hard to steer around the more experienced. And nobody gets younger, so when you don’t get job A and go for job B 2 weeks later you, you’re older still!

  23. James

    Yves said- “This overly narrow hiring spec then leads to absurd, widespread complaint that companies can’t find people with the right skills”

    In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.

    Most people aren’t aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.

    http://www.economist.com/node/17723223

    This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.

    The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.

    The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs(most of which will deem you overqualified.)

    http://pipeline.corante.com/archives/2011/03/03/a_postdocs_lament.php

  24. Abe, NYC

    I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It’s easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can’t find one, shouldn’t that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren’t changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does.

    1. NotTimothyGeithner

      I think its related to a survival mechanism in our minds. People are going to go to the market the day after we bomb the markets in Tripoli because most of us are suffer from a combination of optimism and delusion. The people who are still employed are suffering from the same affliction and to rationalize the rampant unemployment and even their teetering existence they have to demonize the suffering.

  25. damien

    It’s more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice. You really can’t maintain corporate culture without existential fear – not just, “Uh oh, I’m gonna get fired,” fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who’s survived outside a while is bound to be suspect. That’s a sign of economic security, and security of any sort undermines social control.

      1. Ishmael

        Damien — Agree totally. As I noted below, feed back a couple of recruiters received was “He seems very confident.” This is just another way of saying he is not afraid of being fired so we are not interested in hiring him. He does not want to kiss ass to keep his job.

    1. youniquelikeme

      You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser)to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.

      This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Governemtn one) globalization and off shore hiring are not sustainable for much longer.

      Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.

    2. Yves Smith Post author

      I’ve come to describe myself as feral, but even when I was a wage slave, I was never sufficiently domesticated.

      1. Chris

        Yves wrote: “I’ve come to describe myself as feral, but even when I was a wage slave, I was never sufficiently domesticated.”

        Oh Yves, so well said… I see myself in that comment so clearly.

  26. davver

    “Another boost to the power of neclassical economists was the widespread depiction of the Volcker success in breaking inflation as a monetarist experiment. In fact, as William Greider’s Secrets of the Temple shows, Volcker simply used monetarism as an excuse to cover the fact that he did not want to be bound by a target interest rate. And efforts at his Fed and Bank of England showed that monetarism did not work; there was no consistent relationship between money supply growth and any macroeconomic variables. But the popular perception that Volcker had whipped inflation using monetarism gave a huge boost to Milton Friedman and the Chicago School of Economics, which allowed them to extent their influence over policymaking.”

    Can you elaborate? I’ve seen data on money supply growth in the 70s and early 80s, and it certainly seems like Volcker slammed down on money growth and that there was a correlation between money growth and inflation.

    1. Cedric Regula

      I think the thing that does hold to a certain extent is that the “cost of money” has an impact on “economic growth”. These measures are not the same thing as M2 or inflation. But they all are interconnected in loose ways, with long time lags. But I think that’s what Milt was telling us at the time.

  27. perfect stranger

    Anyone who has a modicum of history in his or her background must not be surprised with this. While the regime/warfare state keep this as public secret, for the individuals this is a cognitive dissonance, to use that euphemism. One professor of university from my old country once said: “People must learn how to think!”. I was young and this wasn’t big deal at that time, now after new-colonialist had arrived in that country and my experience from this one, I know what he wanted to say.

    Disdain toward (modern) unemployees is going back for centuries and has origin, and was legislated, in medieval England; it was taken over by fictions market economy, too. In medieval times those laws against poor was tool to force peasant to work for few pennies, the marketers intention was to force them to work for as less as possible and if they refuse, they prosecuted them.

    Karl Polanyi

    “It is no exaggeration to say that the social history of the nineteenth century was determined by the logic of the market system proper after it was released by the Poor Law Reform Act of 1834. The starting point of this dynamic was the Speenhamland Law.

    If we suggest that the study of Speenhamland is the study of the birth of nineteenth-century civilization, it is not its economic and social effect that we have exclusively in mind, nor even the determining influence of these effects upon modern political history, but the fact that, mostly unknown to the present generation, our social consciousness was cast in its mold.”

    So what expect from people like Thatcher, or for that matter Reagan, when she said “There is no such thing as society”?

    Only one thing…oppression. Oppression of highest degree across societal spectrum.

    Since neo-liberalization, domestically, has been accomplished long ago, disdain for domestic population as long as keep quiet otherwise…,and hatres for the others with flavors of racism and all kind of phobias accompanied with Smart ammunitions and “humanitarian interventions” for those who refused enslavement.

    It is time for New Modest Proposal.
    http://art-bin.com/art/omodest.html

  28. down and out in Slicon Valley

    This is the response I got from a recruiter:


    I’m going to be overly honest with you. My firm doesn’t allow me to submit any candidate who hasn’t worked in 6-12 months or more.
    Recruiting brokers are probably all similar in that way….
    You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job….that’s my advice for you.
    Best of luck

    I’m 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent.

    Where do I sign up to gain skills required to find a job now?

    1. perfect stranger

      Maybe, congress men/women.

      I can see frequently that advise or answer on question “whom to complain” or “how to change the things”.

      In “functional democracy” (if there is one) that maybe works. In holographic one, I’m discouraged workers or marginally attached workers. I have no idea what either means, nor care. I know both are named by sick mind, and that mind must be employed by Government.

      Since I am stranger, I look for job overseas.

    2. Litton Graft

      “Best of the Best?” I know you’re down now, but looking back at these Gov’mint contractors you’ve enjoyed the best socialism money can by. Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.
      I’ve worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I’ve never understood the mindset of some folks who work in the Wermacht Inc: “Well, someone has to do this work” or worse “What we do, no one else can do”
      The reason no one else “can do it” is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.

    3. Hosswire

      I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn’t want to have to talk to someone else next.

      So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history.

      That should not be that hard to make happen.

  29. Francois T

    The “bizarre way that companies now spec jobs” is essentially a coded way for mediocre managers to say without saying so explicitly that “we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!”

    Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I’m barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those “overly narrow hiring spec then leads to absurd, widespread complaint that companies can’t find people with the right skills” are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as “if demand is better, so will our business”, they can’t see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.

    And guess what: qualified workers cost money, qualified workers urgently needed cost much more.

    This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.

  30. Kit

    If you are 55-60, worked as a professional (ie, engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.

    I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.

    At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.

    Today, someone looking at us would think we were the typical corporate retiree. We surely don’t let on any differently but the experience (to get to this point) almost killed us.

    I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don’t. We were very lucky to survive intact.

  31. Ming

    Thank you Yves for your excellent post, and for bringing to light this crucial issue.

    Thank you to all the bloggers, who add to the richness of the this discussion.

    I wonder if you could comment on this Yves, and correct me
    if I am wrong…I believe that the power of labour was sapped by the massive available suppply of global labour. The favourable economic policies enacted by China (both official and unofficial), and trade negotiations between the US governemnt and the Chinese goverenment were critical to creating the massive supply of labour.

    Thank you. No rush of course.

    1. mike

      Most of these kids are stoned out on Prozac and adderal. This gives them a sociopathic sense of entitlement. This biochemical state is further influenced by the Hollywood dispensed notion that all businesses are founded by 20 somethings who become millionaires by 30.

      They have no idea how much hard work it takes to run a business or to see ‘the big picture’.

  32. PQS

    Excellent comments here, and as per usual Yves’ analysis is cogent, intricate, and full of background economics information that a peon like myself would not otherwise be privy to.

    Personally, I think the backlash against the unemployed is just another expression of the politics of Resentment. Add in a bit of generational warfare, and there you have the attitudes: the unemployed are sucking off the rest of us not unlike other “useless eaters”….And most 20 or 30 something MoTUs believe they will NEVER have these problems: they are too smart, too connected, too wired, etc. etc.

    I work with young people who simply have no idea how ridiculous it is for them to tell me how to run work, or “assist” me with a difficult client by taking over a project. I suppose my 15 years and hundreds of millions of dollars of projects across the entire West Coast and Canada hasn’t, in their minds, provided me with enough “experience” or something. It used to annoy me, now I just find it hilarious.

  33. skippy

    All this pain for the want of a few penal colony’s.

    Skippy…the romantic visages waft over me.

  34. absentsignifier

    The unemployed are stigmatized, while billionaires are idolized and worshiped…..

    “True, we have got into the habit of admiring colossal bandits, whose opulence is revered by the entire world, yet whose existence, once we stop to examine it, proves to be one long crime repeated ad infinitum, but those same bandits are heaped with glory, honors, and power, their crimes are hallowed by the law of the land, whereas, as far back in history as the eye can see — and history, as you know is my business — everything conspires to show that a venial theft… such as bread crusts, ham, or cheese, unfailingly subjects its perpetrator to irreparable opprobrium, major punishment, automatic dishonor, and inexpiable shame….

    “…But when you are weak the best way to fortify yourself is to strip the people you fear of the last bit of prestige you’re still inclined to give them. Learn to consider them as they are, worse than they are in fact and from every point of view. That will release you, set you free, protect you more than you can possibly imagine. It will give you another self. There will be two of you.

    That will strip their words and deeds of the obscene mystical fascination that weakens you and makes you waste your time. From then on you’ll find their acts no more amusing, no more relevant to your inner progress than that of the lowliest pig.” — Louis-Ferdinand Céline (Journey to the End of the Night)

  35. Rick Moss

    That’s because we’ve turned into country of snobs that talk a great deal and produce very little. You know, like the democrats and republicans. We have to be smarter. Nothing is what it seems.

    Democrats and Republicans can’t help us. So why don’t you help yourself. Wake up. If you want a better life take charge of it… Join with the rest of your countrymen and women.

    JOIN THE REVOLUTION
    Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )

    We don’t have to live like this anymore. “Spread the News”
    FIGHT THE CAUSE – NOT THE SYMPTOM

  36. Nexus

    There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.

    In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of ‘supply and demand’, which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.

    It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).

    The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.

    For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the ‘elites’ that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.

    The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970’s while at the same time debt has steadily increased to underpin the illusion of wealth – the ‘borrow today and pay tomorrow’ mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.

    It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created ‘Project Socrates’ that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don’t care as they make money either way and this way you get other people overseas to work cheap for you.

  37. S P

    Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight “inflation.” If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.

    It also treats the printing press as a necessary means to fight “deflation.”

    So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you’d expect.

    The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.

    There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren’t willing to accept that we have the reached the end of growth and we need radical redistribution measures.

    The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.

    Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.

    So this whole experiment called America will fail.

    1. F. Beard

      The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. S P

      Many Austrians are not libertarians. Many believe in a government enforced gold standard. Does that sound libertarian to you?

      PMs (precious metals) are merely the fall back position for the usury class. We need liberty in private money creation, not shiny metals.

      As for deflation, it is no more morally valid than the inflation the fictional [sic] reserve bankers cause.

  38. ep3

    excellent Yves, very good post. I have often heard the stories of before unions in the teens and 20s of the 20th century, the supervisor would line people up in front of the door and pick and choose who he would let work that day. But the unfortunate thing was that he wasn’t picking the best/hardest/smartest worker, the supervisor was receiving kickbacks to pick certain workers, either friends or family or persons that were family of the super’s boss so that that helped him. This form of corruption was significantly reduced by worker/labor rights on the job. No longer did you have to kiss up to the boss to keep your job. There were concrete rules on the shop floor that said “u did this, u were employed/paid”. This brought the worker up to the same level as the boss. No longer did an employee with a mortgage and family have to live in fear of losing his job everyday due to the boss waking up on the wrong side of the bed.
    People think this isn’t possible. But it did happen and now that we are facing 22% unemployment, with weaker labor power, we are returning to this. Where the boss can say “if you don’t like the way I am doing something, there’s McDonald’s across the street”.

  39. AnITperspective

    I can’t speak for other industries, but I do have a useful IT perspective regarding an actual “skills” issue that does exist.

    I used to work for IBM, which has been around long enough to experience the transition from a tech sector where you bought an entire proprietary technology stack from a big vendor, to one that is increasingly driven by open standards. Unfortunately, the proprietary technology stacks are very profitable so they get retired and people get transitioned off of them as SLOWLY as the customers will allow.

    The net of this for the employee is that there are two kinds of jobs at IBM: working on highly proprietary(dying) products, and working on products based on open standards. I was lucky enough to fall into the latter category, which allowed me to build a great set of skills, and I was able to exit the company on my own terms, and to my benefit.

    I now work for an organization that would LOVE to hire the highly experienced people that IBM is shedding. We recently interviewed people with 10-30 years of experience for a position that is really meant for recent college graduates. We completely expected to hire one of these people for said position, but we experienced something completely eye opening.

    I never appreciated the implications on working on the “proprietary” products until now. Essentially, IBM takes you out of school, puts you on a highly specialized piece of a highly proprietary product, and lets you sit there for 10+ years. The work isn’t relevant to anything current, you don’t really deal with customers, and they give you about 60+ hours of it per week to do, so it’s really hard to find the time to build skills outside your job. Then when your product finally succumbs to the market forces, they lay you off because they’re actively shedding US workforce anyway.

    The problem with this is that it leaves you no better equipped for many current IT jobs than a college new-hire. On top of that, recent graduates are typically more prepared for the interview process since many colleges focus on this as part of their instruction.

    I guess the moral of the story is that employees need to realize that most big corporations have a completely one sided view of the employee/employer relationship. You need to have the same view, or they will use you up and spit you out in the name of “good business”.

  40. sgt_doom

    “One thing I have never understood in America is the way that people who lose their jobs become pariahs in the job market.”

    Comprehension comes from knowledge, not accepting false beliefs.

    The common mythology pushed by the Corporate Non-Media is that Amerika is a “meritocracy” — meaning that if you a one of those typical ethics-challenged grads from Harvard, Yale or Princeton, you are somehow “superior.”

    Negative — the closest I’ve ever come to a meritocratic organization in America was the US military (and that was during the draft era).

    I’ve seen the hiring process from the inside and out, and never fathomed why I was hired when I was hired, and couldn’t at first understand why they wouldn’t hire me for jobs I was extraordinarily qualified for.

    Nepotism rules; self-interest rules; and idiocy rules in the American hiring process.

  41. Dave

    If you have spent any time around your local state jobs center, you’ll understand why so many of them aren’t employed. I’ll leave it at that. Most of the jobs these people could do have been out-sourced. Like the Chinese who make your electronic toys. Or replaced by illegal immigrants. I know many in the food service industry who have been replaced by lower paid workers. The industry pays lip service to checking illegal immigrants. So lets put a tax on corps for outsourcing their jobs and lets round-up the illegals, and send them home. Voila, job peoblem solved.

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