Marshall Auerback: Obama Needs to Get Serious About Jobs

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Yves here. I have no doubt that some readers will give a knee jerk negative response to the idea of aggressive measures to create more jobs, seeing it as undue government intervention in the economy.

But that horse has left the barn and is now in the next county. Like it or not, the economic damage done by the financial crisis was too severe for governments to sit on their hands. So the question is not intervention versus no intervention, but what sort of intervention is most likely to be salutary? That means the benchmark is not doing nothing, but the measures taken thus far, which consist heavily of overt and hidden subsidies to the financial sector.

By Marshall Auerback, a portfolio strategist and hedge fund manager. Cross posted from New Deal 2.0

A universal Jobs Guarantee Program could free us from the predations of politicians and foster a strong economy.

On the anniversary of the inauguration of the Works Progress Administration (WPA), it is striking to compare the unemployment record of Franklin Delano Roosevelt, and that of his modern day successor, Barack Obama. FDR’s achievements in putting Americans back to work are among the most impressive of his tenure; he took the rate from 25% to 9.6% by 1936. But so far, Obama’s policies have failed to “jump-start” unemployment in a significant way, even as Wall Street has continued a recovery utterly and totally divorced from Main Street.

It’s easy to see why: The debt loads remain too high while income and employment continue to fall. Meanwhile, delinquencies and foreclosures continue to rise. Even at current depressed prices, assets are overvalued. Many financial institutions (probably including most of the big ones) are hopelessly insolvent, holding mountains of toxic waste that will never be worth anything. By the same token, almost 14 million active job seekers remain unemployed. Another 6.4 million people who are not actively looking for work (and therefore are not counted as unemployed) say they want jobs. Among workers who are lucky enough to have jobs, 8.3 million are employed part-time but want full-time jobs. Taken together, there are well over 28 million people in the United States for whom the economy has not performed its most important function — providing enough jobs to go around.

The pace of recovery from the recession has been distressingly slow. It took only 18 months for the nation’s unemployment rate to climb from 5.0 percent to its peak of 10.1 percent in October 2009. In the 16 months since then, the rate has made up less than a quarter of that loss. True, we did dodge another Great Depression. That fact is attributable to the federal government’s forceful macroeconomic intervention in late 2008 and early 2009. Economists Alan Blinder and Mark Zandi (one a former Clinton appointee to the Federal Reserve Board of Governors, and the other a former economic adviser to Senator John McCain) have estimated that the nation’s unemployment rate would have reached 16 percent rather than its actual 10.1 percent in the absence of this intervention.

And yet, in spite of the historic successes of programs such as the WPA, the current government cannot seem to even begin to replicate it. The very fiscal stimulus that helped to avert an even greater economic calamity is now viewed as an excuse against further action to mitigate the scourge of unemployment. We continue to be plagued by misguided notions that our government faces imminent insolvency (imagine the fate of the US had the Roosevelt Administration embraced this idea!).

Part of the aversion toward embracing WPA-style programs today is the false idea that they did little to reduce unemployment, which some claim was only “solved” by the war. Most statistical studies understate the effect of the New Deal job creation measures because they don’t show how much of the decline in official employment was attributable to the multiplier effect of spending on direct job creation. Additionally, the “work relief” category does not include employment on public works funded by the Public Works Administration (PWA), nor the multiplier effect of PWA spending. The figures tell the story indirectly, however, in the path official unemployment followed — steeply declining in periods when work relief spending was high and either declining more slowly or increasing in periods when work relief spending was cut back*.

Estimates for the years prior to 1940 are intended to measure the number of persons who are totally unemployed, having no work at all. For the 1930s this concept, however, does include one large group of persons who had both work and income from work — those on emergency work. In the United States we are concerned with measuring lack of regular work and do not minimize the total by excluding persons with made work or emergency jobs. This contrasts sharply, for example, with the German practice during the 1930s when persons in the labor-force camps were classed as employed, and Soviet practice which includes employment in labor camps, if it includes it at all, as employment. Counting the WPA programs, FDR’s record on unemployment, notably in his first time of office, was formidable, as he took the rate down from 25% to 9.6% by 1936.

True, an economy can boom for a time, with what may appear to be inadequate levels of net government spending without rising unemployment. In these situations, as is evidenced in countries like the US during the Clinton Administration, GDP growth can be driven by an expansion in private debt. The problem with this strategy is that when the debt service levels reach some threshold percentage of income, the private sector will “run out of borrowing capacity” as incomes limit debt service. This tends to restructure their balance sheets to make them less precarious and as a consequence the aggregate demand from debt expansion slows and the economy falters. In this case, any fiscal drag (inadequate levels of net spending) begins to manifest as unemployment.

The Obama Administration remains fixated by deficit reduction at the expense of reducing unemployment. This is not helpful to recovery: In addition to inflicting lasting damage on an individual’s labor market prospects, unemployment is associated with increased rates of physical and mental illness, alcohol and drug abuse, child and spouse abuse, failed relationships and family dissolution, suicide and attempted suicide, and a host of other personal and social ills. All sectors of the unemployed suffer an increased risk of experiencing these problems, but since unemployment itself is distributed unequally among population groups, with disadvantaged workers bearing more than their fair share of its immediate burdens, so too are they destined to bear more than their fair share of its painful, longer-term consequences.

The existence of our current job shortage also makes it harder for us to dig our way out of the recession. Long term unemployment prevents the housing market from rebounding and the housing industry from recovering. It forces the consumer sector to wait anxiously for customers. It keeps capital goods producers waiting for a plausible customer.

A more effective way to restart the economic process on solid ground is to deal with the underlying cause of the problem: We have a credit-based economy, rather than an incomes-based economy. The whole boom of the 2000s (and more broadly the growth process that emerged at the in the early 1980s) was based on household borrowing and the continuation of negative saving trends (that is, household deficit spending). A good place to start recovery efforts, therefore, would be to change this method of economic growth by fostering more, not fewer WPA-type programs.

In my view, a universal Job Guarantee program would be the best way forward and truest to the spirit of the WPA. The jobs would pay basic wages and benefits with a goal to provide a living wage. The program would take all comers — anyone ready and willing to work, regardless of education, training, or experience. We could adapt the jobs to the workers. As the late Hyman Minsky put it, we could “take the workers as they are”, work them up to their ability, and then enhance their skills through on- the-job-training. Additionally, the guaranteed public service job would be a counter- cyclical influence, automatically increasing government employment and spending as jobs were lost in the private sector, and decreasing government jobs and spending as the private sector expanded. Such a program would remain a permanent feature of our economy, acting as a buffer stock to put a floor under unemployment, while maintaining price stability whereby government offers a fixed wage which does not “outbid” the private sector, but simply creates a stabilizing floor and thereby prevents deflation.

Given the nature of today’s “predator state” (to use Jamie Galbraith’s apt phrase), politicians have a proclivity to reward those who “pay to play”. They tend toward wasteful spending and give goodies to campaign contributors. But we could take this power away from sock puppet politicians through a mechanism that automatically adjusts to insure the private sector can actually realize its desired net nominal savings position. This would help to free the system from political parasites while increasing the freedom of the private sector to achieve its savings goals. What better way to celebrate the anniversary of the WPA’s inauguration?

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  1. F. Beard

    So the question is not intervention versus no intervention, but what sort of intervention is most likely to be salutary? Yves Smith

    From an ethical point of view the solution is obvious – a bailout of the entire population followed by fundamental reform.

    Not only is the debt excessive; it is unjust too since it is the result of the government backed counterfeiting cartel, the banking system. That cartel has cheated savers of honest interest rates and driven borrowers into non-serviceable debt.

    As for the source of the bailout money, the US Treasury should simply “print” some debt-free United States Notes.

    1. Fed Up

      “Yves here. I have no doubt that some readers will give a knee jerk negative response to the idea of aggressive measures to create more jobs, seeing it as undue government intervention in the economy. Yves here. I have no doubt that some readers will give a knee jerk negative response to the idea of aggressive measures to create more jobs, seeing it as undue government intervention in the economy.”

      And, F. Beard: “From an ethical point of view the solution is obvious – a bailout of the entire population followed by fundamental reform.”

      How about a bailout of the lower and middle class? Since there does not seem to be any goods/services shortage (other than cheap oil and/or cheap food/food), why not create more retirees (employment problem solved)?

      1. F. Beard

        How about a bailout of the lower and middle class? Fed Up

        An equal bailout would add little to the wealth of the rich but would vastly reduce wealth disparity.

        Suppose I have $10,000 and you have $1,000,000. You are 100 times wealthier. Now suppose both of us are given $250,000. You know have $1,250,000 and I have $260,000 but the new ratio is now only 4.81 to 1.

        The rich can hardly object to an equal bailout, can they? Without revealing a sadistic streak?

        1. Fed Up

          The problem with a bailout of the lower and middle class is that the rich will stop saving in bonds. They will either sell them or refuse to roll them over and start saving/force up prices so the lower and middle class have a lower standard of living. Some higher taxes would help here.

          The other problem is the CEO’s. They would probably think I mostly have pricing power and quantity(ies) where I want them. If I could just pay the workers less in real terms (or even nominal terms), I could really jack up the stock price. Since the lower and middle class (with the gov’t now helping them) want their fair share of productivity gains, I refuse to expand capacity. Some good old fashioned firings would help here.

          1. F. Beard

            The problem with a bailout of the lower and middle class is that the rich will stop saving in bonds. Fed Up

            Good. Sovereign governments should not borrow in the first place. Government should simply create, spend and tax its own fiat. Nothing else. No borrowing, no lending, nothing else.

            Some good old fashioned firings would help here. Fed Up

            When the US starts allowing genuine capitalism instead of banker fascism then we should have no shortage of genuine capitalists.

          2. Fed Up

            I don’t believe any entity should be borrowing.

            I believe this accounting identity is correct: It should be:

            savings of the rich plus savings of the lower and middle class = dissavings of the currency printing entity with currency and no bond attached plus the balanced budgets of the various gov’t entities (as in zero for the gov’t entities).

    2. Fed Up

      “A more effective way to restart the economic process on solid ground is to deal with the underlying cause of the problem: We have a credit-based economy, rather than an incomes-based economy. The whole boom of the 2000s (and more broadly the growth process that emerged at the in the early 1980s) was based on household borrowing and the continuation of negative saving trends (that is, household deficit spending). A good place to start recovery efforts, therefore, would be to change this method of economic growth by fostering more, not fewer WPA-type programs.”

      If you want an income based economy, then you need to get your medium of exchange correct. That would be currency with no bond attached. It DOES NOT MATTER if it is household debt or gov’t debt. They are both debt. They have an interest rate attached, repayment terms attached, and bring something forward from the future.

      If you don’t tighten up the labor market, it becomes:

      savings of the rich = dissavings of the gov’t plus dissavings of the lower and middle class.

      It should be:

      savings of the rich plus savings of the lower and middle class = dissavings of the currency printing entity with currency and no bond attached plus the balanced budgets of the various gov’t entities.

  2. Foppe

    Question: to what extent has this already been tried in the UK, given that they are now laying off 25-30% of the government labor force? I’ve seen it suggested by various people, not all of them neoliberal, that the UK govt has bloated. Anyone have a clue whether there’s any substance to that?
    Or, alternatively, how much healthier would the US/UK budgets look if corporations were actually being taxed? And shouldn’t that be used as a baseline, along with, say, government employment figures from the early ’70s or so, to figure out what percentage of the population can be gainfully employed by the government without the economy becoming unbalanced? (GDP would be a terrible figure to use here because it includes debt-funded consumption etc., so it would seem better to look at the size of the labor force.) And is there anyone who has a clue which government agencies (let’s take the UK as an example here, as the US has been downsizing government for two decades now, and horribly so ever since 9/11 gave Bush a chance) have grown substantially since the early ’80s and why?

    1. DownSouth

      Foppe asked: “And is there anyone who has a clue which government agencies (let’s take the UK as an example here, as the US has been downsizing government for two decades now, and horribly so ever since 9/11 gave Bush a chance) have grown substantially since the early ’80s and why?”

      I think all that data can be found here.

      Scroll down and click on:

      Section 4 — Federal Government Outlays by Agency
      Table 4.1 — Outlays by Agency: 1962–2015
      Table 4.2 — Percentage Distribution of Outlays by Agency: 1962–2015

  3. attempter

    1. Quite right – as long as the central government exists, it will be aggressively intereventionist. That’s by definition.

    So in theory it can be either interventionist the way conservatives, corporate liberals, and “libertarians” want it, the way it really is, on behalf of the rich and big corporations; or it could intervene against the criminals on behalf of the productive citizenry.

    In practice it will only do the former, never the latter.

    2. So waiting for a criminal like Obama to “get serious” about anything but facilitating organized crime is a complete waste of time, and demeaning to humanity.

    3. Leaving that aside and taking the proposal in itself, we see another aspect of the problem. It combones the worst of both worlds: It’s “radical” in broad concept, but picayune in the details.

    Once you say the words, Jobs Program, you’re automatically going to generate the full opposition of the criminals. So what could you possibly think you’re gaining by being so meager and cowardly in the details, for example “government offers a fixed wage which does not outbid the private sector”. Why shouldn’t a public interest jobs program outbid the slave wages of the private sector? In an earlier proposal Auerback even said the jobs created in themselves shouldn’t be the same jobs for which the private sector pays minimum wage. One can only wonder what kind of jobs those must be. It sounds like the worst combination of degrading make-work which pays a sub-minimum wage. It’s almost as if the thing is set up to be a disaster, to discredit the idea once and for all.

    I’m not calling for a Jobs Program myself because this government will never do any such thing, and even if it did it would be the kind of thing guaranteed to fail, like Obama’s phony “stimulus”.

    But if I were to call for one, it would be a real Jobs Program dedicated to real jobs paying a living wage and building a real life for the American people. So if it’s a Jobs Program you want, demand one which isn’t just words but which is sound and aggressive in the details.

    You can be sure that there’s no political advantage in skimping on the details. On the contrary, only “Boldness, boldness, and more boldness” will ever win anything.

    1. JTFaraday

      “It’s almost as if the thing is set up to be a disaster, to discredit the idea once and for all.”

      Beware of liberal policy entrepreneurs. Just look what happened to Jacob Hacker–and anyone who couldn’t have predicted that is not qualified to be a tenured professor at Berkeley. (Or, well, you wouldn’t like to think so). Is he naive, or is he outright pernicious?

      Given that Auerback claims to not be a deficit hawk, one can’t help but suspect that contempt for working people and the unemployed– not that dissimilar from that of conservatives– lurks behind his austerian approach.

      When he responds that–despite his voluble promotion of MMT– you need to consider “what is politically possible,” he’ll be well on his way to Hackerdom. I think we’ve seen this one before.

      Agree that Auerback is too thin on details–and that there is something fishy about this one, but I don’t think it’s to set the “new WPA” up to fail. Arguably the “WPA revival” already failed with the too-small stimulus. We’re moving on from here.

      I think it’s a set up for a permanent austerian work camp. Conservative sadism will suddenly overcome its dislike of Big Government, which will eventually be “privatized” anyway, like the prison industrial complex. Victory in full.

      I’ve *never* seen Auerback address the real political obstacles to his WPA commemoration, which is not that conservatives will be cheap but that they will turn it into total sh*t. Have they or have they not been insinuating that being unemployed is a crime?

      1. attempter

        Yes, it’s very odd that a theorist of MMT who recognizes the depression of this economy and calls for a Jobs Program is then so miserly in the kind of Jobs Program he wants. It’s the equivalent of getting all the theory right, proclaiming “we need a stimulus”, and then asking for an amount woefully short of what is logically called for.

  4. burnside

    When last I looked – admittedly a long time ago – the Netherlands administered job guarantees at a time when the country was absorbing large numbers of immigrants from Suriname.

    New graduates I knew at the time, many holding advanced degrees in technical fields, accepted work of every kind secure in the knowledge they would ultimately be placed within their field, and had a living wage in the interim.

    We needn’t look very far for a real-world model, or for examples showing the effects and potential difficulties of such a program.

    1. Carla

      “We needn’t look very far for a real-world model, or for examples showing the effects and potential difficulties of such a program.”

      But nobody with the authority to do anything is looking, are they? Uninvestigated models are useless.

      Of course, our unemployment “problem” could be solved instantly. Just a couple of problems: there is absolutely no desire on the part of the ruling oligarchy to solve it; and the population does not give a s**t.


  5. skippy

    Need new terms and definition of Jobs[?] in worlds most competitive society (@least they like to think so {WWII legacy thingy}). Creation of special jobs zones for try-hard’s (monkey puzzles to past the time), support for those that wish to live life with out an economic gun to their head (largely locally resourced community’s), etc.

    Skippy…yeah I know the GDP gods demand sacrifice or will extinguish us all.

  6. DownSouth

    Talking about FDR and the WPA, let me use that as an opportunity to plug an outstanding PBS production about the CCC:

    • One of the most popular New Deal programs, the CCC put three million young men to work in camps across America during the height of the Great Depression.

    The movie can be seen on the internet here.

    It goes to highlight the very fundamental differences between FDR and Obama.

  7. pagar

    “The Obama Administration remains fixated by deficit reduction at the expense of reducing unemployment.”

    Is this a joke? IMO, the Obama Administration has done nothing to reduce the deficit.

    1. eric anderson

      Quite right. Even the GOP is not focused on deficit reduction, at least not to the degree that would change the ultimate outcome. See Mish’s classic post on April 20 detailing the differences between Obama’s deficit reduction budget and the Ryan plan. Never mind that both use rosy scenarios on growth, and make no allowance for any recession in the next ten years. The difference between the plan is the rate at which Uncle Sam racks up new debt, the difference between heading toward the cliff wall at 100mph or 60mph. Under Ryan Plan estimates, in 2021 our interest on the still-bloating national debt reaches $687B annually. Better than Obama’s plan, which estimates $928B interest payments in that year. Either is unacceptable.

      It’s unfair to say Obama has not been serious about jobs, though. He’s focused on jobs. Like a laser. Surely Marshall is not suggesting the President is a liar!

      1. Hugh

        10 year projections are garbage. So does it really matter if Politician X’s fictional numbers come out looking better than Politician Y’s equally fictional product?

        1. Doktor Professor

          It does make for a good distraction. Distraction has become a rather effective technique for holding onto power.

      2. Strata

        The only jobs that Obama cares about are a second term in the Presidency, followed by cushy post presidential board appointments and high priced speaking engagements to plutocrats.

  8. okie farmer

    Attempter is completely correct. Auerbackk’s is another solution looking for a political system not ours to implement it. You can’t get there from here. Even a massive jobs program/s (that would have created good jobs) that would have advanced the country’s transportation, energy production, etc, was unable to get traction in Congress. What’s the point of Auerback’s conjecture? Without the votes to progress even the kind of ‘good jobs’ program/s attempter advocates, there is no point in Auerback advocating for a weak one. ‘Boldness’ is important, mandatory, or you will be crushed by the criminals before you even start. I’m beginning to believe that our only hope is to go out and register to vote the 20 or 25 million people that would elect real people’s representatives to overthrow the oligarchs. That’s what Chavez did, that’s what Morales did – they registered and voted the poor and marginalized – they took control of their countries for the people.

    1. Paul Tioxon

      On average nationally, students enrolled in credit-bearing
      courses at U.S. community colleges in fall 2009 was 11.4%
      higher than it was in fall 2008 and 16.9% higher than it was
      in fall 2007. The largest growth came in the full-time student
      population, which grew by 24.1% between fall 2007 and fall

      If you recall, Obama took student lending back from the banks and put the savings into increasing Pell Grants and Stafford loans. These do not have to repaid until after graduation. This is a small but meaningful Federal Jobs Training program. But more importantly, where is the scale of response commensurate with the high unemployment? Housing stock retro fitting for energy efficiency is being funded, but again, making a dent is not enough. The really shocking numbers, that tell us a lot about the structural damage done to employment, show that looking to the past, while useful, does not solve the kind of job destruction of people who should be immune from unemployment, the older, college educated, experienced workers of the IT industry.

      “From 1990, when Labor made its rosy prediction that programming jobs over the next 15 years would increase at a faster rate than other jobs, the U.S. workforce grew by 24 percent. If the number of programmers had increased at that pace — let alone at the optimistic rate Labor had once projected — there would have been at least 700,000 programmers by 2006. Instead, there were only 435,000. Programmer jobs have continued to decline and were at 427,000 in 2008, the last year for which figures are available. Even that masked the magnitude of the domestic job losses. For among those 427,000 programmers were thousands of H-1B guest workers–foreign nationals brought in by American companies under immigration law to do programming, usually at much lower pay and benefits.”

      From the Bartlett and Steele article here:

      Marshall, your call for job creation by direct government intervention are well heeded. They are critically important, but your failure to grasp the long standing class war against the citizens of America by business who want them as little more than docile consumers and cheap labor is the problem, not the government or Obama’s failure to draft the unemployed to plant petunias, clear wilderness trails or build the Hoover Dam.

      With the stroke of a pen, kicking out foreign IT workers would bring over in 500,000 jobs over night. It is not just the capital strike by business waiting on the sideline til they are certain the middle class is sufficiently disciplined as a workforce. It is overruling simple political decisions that Obama does directly control by overturning agency rules and regs that would leave American citizens as the sole source of the labor pool. And, I am not talking about building a fence across the Mexican border. Computer programers are flying into JFK with graduate degrees, not sneaking in cargo containers via smugglers.

      If you want to look even deeper at the titanic struggle to bring people back to work, do not look to FDR. Look to the Lewis Powell Manifesto to the US Chamber of Congress. Obama is has just to begun to reverse a problem that began before bankers, realtors and mortgage brokers took it in the neck, it began as reactionary right wing politics started to take back America from the New Deal, The Great Society and the 60’s culturally and politically revolution.

      “Though Powell’s memo was not the sole influence, the Chamber and corporate activists took his advice to heart and began building a powerful array of institutions designed to shift public attitudes and beliefs over the course of years and decades. The memo influenced or inspired the creation of the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, Accuracy in Academe, and other powerful organizations. Their long-term focus began paying off handsomely in the 1980s, in coordination with the Reagan Administration’s “hands-off business” philosophy. ”

      FDR should be an inspiration that we can use the government to change our lives for the better. But not for the menial work which is so out of date in the 21st century economy. Yes, keep the bridges from rusting into the ground, build some high speed rail to move people out of cars and out of short hop air flights. Pave the roads, at lot of that has already been shown to put people to work, but be we need to stop the outsourcing now.

        1. Paul Tioxon

          He showed me his birth certificate and made fun of Donald Trump to his face all in one week. QED

  9. steve from virginia

    Fine! A ‘jobs’ program, whatever that word means.

    Obviously, the USA needs more freeways so that more and more carz can run on them. The USA needs more suburbs, more sprawl, more boxes from horizon to horizon along with more strip mines, more injections of diesel fuel into water tables under very high pressure. ‘We’ need more nuclear power stations. More, more more!

    All of this takes fewer people due to machines but who bothers to notice? ‘Productivity’ is at war with itself.

    No problem, we can make more ‘Made In USA’ sneakers, underwear, socks, dog food (that can be put into TV dinner boxes for human consumption), more lead paint, more flat screens more phones that can pick your friends’ noses and which reliably vote for moderate/compassionate/conservative GOP candidates without any human intervention whatsoever.

    Let’s not really change anything just add more ‘jobs’ like adding more chocolate. What total crap, Auerback is the Bruce Boudreau of economic analysis; hire ten millions to dig holes across America and hire another ten million to fill them up again. For how many more decades is this hole- digging exercise supposed to take place?

    The US of A has ‘enjoyed’ almost 40 years of more or less continuous economic ‘stimulus’ and ‘pump priming’, for what end? Is it just me, but doesn’t 40 years of exercise with nothing to show for it but overstuffed landfills and a bankrupt establishment carry some kind of message about the concept as a whole?

    In the USA waste- based economy, ruin is a feature not a bug.

    The challenge of the ‘now’ is to imagine what our country will be like within — say — ten years when everything we use or do will be made or done entirely by hand without the use of anything other than hand tools, and that the ‘jobs’ of people sitting in offices in clean shirts in air conditioned comfort in giant towers in far- flung suburbs or ‘hip’ cities tapping on iPads sending iMessages to others doing exactly the same thing is completely obsolete, that American’s next big challenge will not be gaining more of these ‘jobs’ but getting something to eat or to defeat/evade criminal gangs armed with automatic weapons.

    Also looking for something to eat. This isn’t a fantasy but an inevitability. See Detroit, Camden, Phoenix, Las Vegas, Gary, Baltimore, East St Louis, thousands of small towns, etc. etc.

    Trying to rebuild the hollowed out industrial paradigm for one more lunge toward the ‘goal line’ of the long- promised luxury utopia is not just a waste of time and energy but fast becoming a crime against humanity as well as the space ship/dirtball we all call home.

    The dirtball always wins in the end. Look to Fukushima and more decades of wishful thinking/pump priming/insider dealing/self delusion/corruption. The future buzzes with ionizing delusions. ‘We only have to fill the tank,’ suggest the Marshall Auerbacks of this world, ‘and the car will go.”

    Sorry, industrialization is out of gas.

    How about a real ‘Plan B’ rather than golden- oldies nostalgia for numbers and tail fins? Step one: get rid of the teevees, step two, get rid of the carz. Then talk about jobs.

    1. F. Beard

      Step one: get rid of the teevees, step two, get rid of the carz. steve from virginia

      The bankers ruin the economy and you lay the blame elsewhere?

      People who can’t figure out the theft that is our banking and money system are nonetheless experts on how everyone should live their lives?

      The morally clueless should lead?

        1. Ellen Anderson

          Yes – it’s a zoning problem for sure. There wasn’t any zoning until the cars came along and made life so intolerable that zoning bylaws were instituted to keep people from choking on fumes etc. etc. If you have any doubt about this read the description in The Magnificent Ambersons of how community life was squeezed out of the public ways by cars. It won the Pulitzer Prize in 1919, I think. Do any of you guys read anything but financial statements?

          Awhile ago someone on this blog asked why progressives aren’t organizing. It is because the the wonderful “progressive” system kindly rescued by FDR gave us atoms for peace and the roads through the wilderness and all of the clap trap of the 20th century. It is over – one way or the other. The banksters are but the final outrage in an outrageous economic arrangement that takes resources and turns them into waste as fast as it can. (Some people describe this as treating the earth as a business in liquidation.) It is worth looking at the ongoing escapades of the kleptocrats partly for fun and partly in case humanity survives long enough to learn lessons for the future. But the industrial revolution is done for and the sooner the better for future generations.

          If Obama pays me enough I will take a few unemployed people, put them to work and teach them to farm without oil (or much oil.) Some government will end up having to do that eventually at some point. But I don’t want loans and I am not giving any money to insurance companies.

          You would do well to head over to Steve from Virginia’s blog, Economic Undertow, and see what else he has to say.

    2. Doktor Professor

      Your exposure of the underlying assumption is correct. However, Auerbach is also correct that the best way to achieve this possibly undesirable goal of greater luxury for all Americans is to spend money so as to give them ways to earn more money. It is such a blindingly obvious solution. But it is even more blindingly obvious that the government has no intention of doing this because for them too it is not a desirable goal.

  10. Nancy Cardin

    The key is to liquidate/seize big Defense Contractors who rule the “employer of last resort”. These rentiers are all over any agency you can name, with smaller body shop rats piling on for a cut of the take. They are vicious profiteers that free up Government stooges from expensive human resource management.
    Contractors can be treated like shit, and there will always be a few contractors that will kiss ass, and help enforce draconian abuses to satisfy their overlords, in an attempt to improve their own fortunes.
    When the symbiotic parasites are attached at the hip they destroy jobs, they destroy the quality of jobs, and they spend most of their time writing checks and covering their own asses. Information Technology at big agenices like Commerce appears to be a country club like environment, where fuedal lords buy the mandatory vendor product (Oracle, Microfuck and Crisco), and employees are consumables that are hired, fired, abused and degraded at will.

  11. Ellen Anderson

    What jobs do you think need to be done? Shall we have public workers making cars? The waste based industrial economy is finished.

    You could argue that the CCC did some good things, especially in our public parks. They also built roads in those parks so cars could drive around in them. Look at Whiteface Mountain in upstate New York. That is the sort of thing a new CCC would do.

    How about creating a job corps of organic farm workers and paying them really well while they learn how to clean up the ruins, improve the soil and grow food in our decimated inner cities?

  12. F. Beard

    It is rather lame – a jobs program. Jobs were eliminated in this country with the workers’ own stolen purchasing power and the solution is to provide make-work for them? Is that all? What about restitution? How about eliminating the theft mechanism? Is that too much to ask?

    The victims don’t need busy-work. They need debt-relief and/or money. And if that happens, real jobs will provide themselves as the economy recovers.

    Of course, government infra-structure spending is needed too. But digging and refilling holes (make-work) is absurd and besides the point.

  13. don

    As alluded to by a few commenters, what we face is the Catch-22: in order to have a government that serves the people rather than corporate interests the government must be radically reformed from the ground up, which assumes a robust public sphere with wide-spread citizen involvement in pushing for what amounts to a radical re-shaping of the government.

    But then the question moves from what the government should do to what the citizens of this country should do and what they are capable of doing. Is there really any indication that the population of this country has the will and comprehension to make changes of such depth, and if we are a long ways from moving in this direction, then how long would that take and what needs to be done to get there? The writer doesn’t address this. Consequently his proposal seems nothing less that of a policy wonk.

    Obama is not going to pursue a jobs creation initiative as called for here without tremendous pressure from the grassroots. I see no indication of this developing, obviously. Consequently, the question is not so much creating a government that serves the interests of the people as it is creating the political base that forces us in this direction. By necessity this is a many many years process and arguing for what the Obama administration should do is all fine and good but is pure idealism, holding no practicality whatsoever.

  14. lambert strether

    The 11 word platform:

    1. Medicare for All

    2. End the Wars

    3. Tax the rich

    4. Jobs guarantee

    These are all, really, rather moderate proposals. Centrist, even. The fact that none of this is on the table, or anywhere near it, shows that the legacy party system is completely and irredeemably broken. But there’s nothing wrong with putting these policies forward as a metric for what a reasonably system would look like, and as a wedge to destroy the legacy parties. After all, people do need to see an alternate future that’s imaginable. They also, and rightly, want to see concrete material benefits.

    1. DownSouth

      lambert strether said: “But there’s nothing wrong with putting these policies forward as a metric for what a reasonably system would look like, and as a wedge to destroy the legacy parties. After all, people do need to see an alternate future that’s imaginable. They also, and rightly, want to see concrete material benefits.”


    2. scraping_by

      I’m beginning to believe the mental framework that says America doesn’t have political parties – it has teams. Just red team/blue team back and forth, the population separated by arbitrary lines of region, religion, ethnicity, and history. Personal identification rather that personal interests.

      If the political divisions were along political lines, that is, along the poles of political questions — who fights and pays for war, who benefits from them; who operates and supports the economy, who benefits from it; the definition of protected classes and how we protect them — political parties would look a lot more like the abstract ideal and for some,that ideal blinds them to the real. FDR tried aligning the real and the ideal with the New Deal and he’s been the devil to the plutocrats and their servants ever since.

      Republicans are running for office as Green Party in Arizona. Corporations “have a relationship with” all possible winners in any election. Since parties are run by the few interested, it’s possible greater involvement by a wider group would create closer ties to the real interests. Or it might be time for a general strike. Dunno.

    3. LeeAnne

      ditto +1 as they say on Zerohedge. Lambert, your comment is a good way to start off my day. Particularly after churchgoing yesterday where the 2 big zeros were on the agenda -obsessively and emotionally exploitative so IMO.

      It turns out that these security and black flag operations are supported by authoritarian greed heads in every walk of life. Perpetuating need, greed and fear comes with a whole set of financial incentives in the zeitgeist.

      Its gonna take a generation willing to fight to reverse what’s alreday been put in place by illegal means. The scheme of using Supremes to install a nitwit POTUS who served his purpose by installing more criminal corporate Supremes for perpetual terms beyond my life time begs for impeachment of all Supremes appointed since the coup d’etat of Bush 2000.

    4. Robert Dudek

      High speed rail
      Organic inner city farming
      Free solar panels for anyone who wants them
      etc etc

      There is tons of important work to be done that isn’t being done by the private sector right now.

      Government must do what the private sector can’t – no more and no less.

  15. Valissa

    Obama needs to get serious about job? What kind of hopium are you smokin? Are you aware of his resume? Is there anything in Obama’s past or present, educatio nor personal resume) that indicates he is remotely interested in creating more jobs? (as if he has some kind of magic wand that can make that happen?) Let’s remember that Obama’s most admired president, other than Lincoln, is Ronald Reagan which he openly stated when he was running for president (should have been a big clue to you former Obama fans). I’ve never heard of Obama admiring FDR or seeking to emulate him in presidential style.

    As we are all aware, corporations do not pay their fair share of taxes and they are not incentivized in any policy sense to grow jobs in the USA. Two huge Dem donors, GE and Google, payed respectively 0% taxes and 2% taxes last year even though both were hugely profitable. GE is known in the industry as having the best tax law avoidance department. This a huge policy problem and I don’t see it improving since GE can afford to spend huge amounts on lobbying. Even Business Week had a huge article about how rich families/individuals and corporations get all sorts of unfair tax breaks.

    Yves has mentioned a couple of times, from her inside contacts, that the business elites don’t “believe” they can make money in the USA so they are developing elsewhere. If that is indeed their groupthink, is there some way to change that?

    The only large scale effort I have observed so far to stimulate the business elite to reconsider their attitudes about creating jobs for Americans is this:

    Bill Clinton bringing Clinton Global Initiative to Chicago in June

    Former President Bill Clinton and is Clinton Global Initiative foundation will hold a summit on the economy and job creation in Chicago on June 29-30. It’s the first time Clinton is convening a CGI program dedicated to jobs–and the first time Clinton–wildly popular in Chicago–is bring a CGI meeting to the city–host to the Obama 2012 re-election campaign headquarters.

    I’m wondering if Bill and Rahm are both behind this. Will it lead anywhere? who knows and probably not, but at least someone is making the effort.

    1. F. Beard

      Yves has mentioned a couple of times, from her inside contacts, that the business elites don’t “believe” they can make money in the USA so they are developing elsewhere. If that is indeed their groupthink, is there some way to change that? Valissa

      It would benefit us all if we allowed genuine capitalism in the US instead of the current banker fascism. That would involve eliminating all government privilege for the bankers such as the Fed, legal tender laws for private debts, the capital gains tax, government borrowing, etc.

      It would be a win-win. The private sector, freed from government monetary mismanagement on behalf of the bankers would prosper and government would have a healthy private sector to tax. Workers would benefit since the corporations, without the government enforced counterfeiting cartel to borrow from, would most likely be forced to share wealth with the workers rather than exploit them.

      Only the usury and counterfeiting cartel would suffer.

    2. reslez

      If that is indeed their groupthink, is there some way to change that? … stimulate the business elite to reconsider their attitudes…

      It’s beneath our dignity as human beings to grovel before plutocrats for the dubious privilege of becoming wage slaves. We don’t need them at all. The sooner we all figure this out the better.

  16. donald brown

    No, wait. I checked the barn, he’s still there
    munching away. So there is no hurry, we have plenty
    of time. I’m sure of it.

  17. besten Muttertagsgeschenk

    universal Job Guarantee program would be the best way forward and truest to the spirit of the WPA. The jobs would pay basic wages

    Could public works program have prevented the upcoming deluge of flooding along the lower Mississippi? Prevented the forest fires in California for the past couple of summers? Does the list of benefits from work programs go on and on? Who knows? One thing for sure, “What the World needs now is not another Government Program Chock Full Graft Corruption and its attendant syphon-off of public funds and resources.”!

    Is there something else that government could do for us? Something that our rulers have been withholding from us for the past 4 years of financial sector implosion all carefully billed to the inflation payer, to the tax payer, the pollution payer, the payer of broken promises? You bet!

    Don’t just do something! Stand there! Is there something our dreaded rulers could *stop* doing? You bet your bottom oppressive, overbearing, iron-fist-ed, schizophrenic, bipartisan, crook-controlled political machine, Mate!

    Is it time to stop the trickle-up-taxation? Stop the regressive sales tax? Stop the regressive-payroll-tax? Stop regressive import duties? Stop the regressive real-estate-sales-tax? Stop the regressive automobile-sales-tax? Stop the regressive sales tax on educational Internet connections in private homes. Stop the regressive, hidden-tax on healthy-produce so essential to our children’s physical and intellectual development?

    Forget your corruption infested jobs programs, but just stop taxing poor people out of business!


    1. gs_runsthiscountry

      So your assertion is we live in a land of zero revenue then? And then?…where will the money come from to support the military industrial complex in our country? If you want lower taxes, tell them to open up the 2/3rds of the budget that is “hands off” right now.

      And btw, nice rant, but poor people don’t pay taxes, they are net takers of the system. I should know, I am one of them now. The only taxes poor people are paying right now is via gas and food prices.

      As someone that has fallen MULTIPLE tax brackets and now live in the 10% bracket as a student, I can tell you unequivocally, POOR PEOPLE DO NO PAY TAXES.

      The fact of the matter is, the middle and upper middle class pay taxes.

      The very affluent do not pay taxes either, at least the ones with access to tax shelters and a good CPA. There is a fallacy that the rich are upset about entitlements. Why would they care,1) when they dont pay taxes anyway and 2) when said entitlements exist and only help to support lower wages, subsidies if you will for the corporations. Many of the affulent are the ones running our nations larger comepanies and corporations.

      The most shining example of this was a few years ago when Walmart got lots of political air time for hiring workers and at the same time showing them how to sign up for government health-care programs.

      Their is a disconnect in our labor markets right now. At stand off between those seeking work and the company that is seeking the “perfect employee.” That includes an educated employee willing to work for peanuts.

      The end game is wage compression, and as hard as it is for people to stomach, entitlement programs for the truly poor only serve to keep wages low. Do you think there is a reason why people haven’t demanded higher wages for 30 years?

      1. gs_runsthiscountry

        Please excuse my grammatical and spelling errors. Keyboard accuracy is not one of my strengths.

      2. reslez


        Amazing. And incorrect. Perhaps you haven’t noticed the lines on every single paystub for Social Security and Medicare tax? I realize this will come as a surprise to you, but every person who has a job in the U.S. pays 15.3%* in FICA tax. This is in addition to income tax. And unlike income tax, there are no deductions for FICA taxes.

        The non-poor stop paying SS tax after the first $106k of income. Lucky ducks!

        And of course you yourself mentioned sales and fuel taxes, which basically negated your own argument. Anyway I hope you’ll feel less anxious about tax policy now that you know poor people in the U.S. do in fact pay (stunningly regressive) taxes. Best of luck in your studies…

        * Your employer pays 50% on your behalf, which makes it feel like less. If you’re self-employed, of course, you have to pay it all yourself. And for 2011 there’s been a slight temporary reduction in the employee’s share. Happy stimulus!

  18. Mickey Marzick in Akron, Ohio

    However much a jobs program or real jobs program to alleviate unemployment/underemployment is in order, it is merely a Keynesian bandaid trying to stem the neoliberal hemorrhage from bleeding out…

    As some have already implied neither the Keynesian nor the Neoliberal ideology of scarcity is capable of resolving this “crisis” because the model of unlimited economic growth model has stalled out. It is dead! We just haven’t buried it yet. Instead of mourning its passing and remaining mired in the ideological baggage supporting it we should celebrate its denouement.

    Capitalist conomic growth has always been the means/mechanism for reducing unemployment, regardless of whether its the Keynesian or the neoliberal variant. And it appeared to work so long as “growth”, however measured, took place and scarcity was constrained by NATURE. But how much real economic growth has occurred in advanced capitalist societies over the past 30 years? Without the expansion of CREDIT how much of this “growth” would have taken place? The model itself has remained STATIC and unable to account for technological innovation, productivity increases, and the like which have made LABOR increasingly superfluous in advanced capitalist political economies. Or should I say that these factors are explained away when the issue of technological unemployment works its way into the discussion. Ask yourself why economists refuse to discuss technological unemployemt?

    So long as gainful unemployment is scarce – not LABOR-POWER – cui bono? Recall Yves’ discussion of private party coercion a few days back? Who benefits in such a situation? LABOR or CAPITAL?

    It also begs the question why do we want to put people back to work when work is increasingly unnecessary? Doing so only perpetuates the functioning of this dead economic model and the sociopolitical institutions designed to keep it on life support ad infinitum.

    While FDR may have created the WPA and CCC as efforts to ameliorate unemployment, what has been repeatedly forgotten in this discussion is the other CRUCIAL pieces of legislation that were passed to reduce unemployemnt. Davis-Bacon Act 1931] – prevailing wage – and the FAIR LABOR STANDARDS ACT [1938]. The latter reduced the standard work week to 40 hours, introduced time-and-half for overtime, and the establishment of a minimum wage. While the WPA and CCC went the way of history shortly after their inception, the FLSA remained on the books, albeit in its present emasculated form as a result of the assault by CAPITAL waged on it over the past 30 years.

    Thus while a jobs program sounds enticing, it is premised on economic growth and a dying, if not dead, paradigm. What we really need is the amendment of the FLSA, reducing the work week to 32 hours or less, without any reduction in income, phased in over 4-8 years so as offset inflationary pressures. Anything exceeding the new standard work week [32 hours or less] should be outlawed or made so prohibitively expensive as to render it “uneconomic” – extinct!

    Instead of falling for the old “sharing the wealth” BS that never happens in the economic model premised on unlimited growth, let’s begin to consider “sharing the work”
    and a discussion of technological unemployment in the context of a sustainable politcal economy rather than any jobs – real or make-work – program. Of the two, which would be opposed by CAPITAL more and why?

    A jobs program would seem small change when confronted by a reduction in the work week and the abolition of overtime. The latter [SHARING THE WORK] coupled with a national debate about technological unemployment – its existence, causes, and solutions – would do much more to propel us beyond the orthodox economic model predicated on GROWTH. If we want a non-reformist reform [A. Gorz – A Strategy for Labor] a proposal for sharing the work takes us further down the road in this direction than a jobs program.

    That’s why Auerback, a portfolio and investment strategist, and his ilk propose a jobs program to distract us from the real REFORM. Just ask yourself which proposal is more threatening in the long run to CAPITAL, a “jobs program” or “sharing the work” proposal? The former is merely a continuation of the economic growth model whereas the latter acknowledges that the limits to that growth model are upon US.

    We often talk about thinking outside the box on NC but most of the comments here suggest that too many of us are still stuck in that wooden box – coffin – of economic growth unable to get beyond it with any realistic proposals with which to challenge the reigning orthodoxy. Modifying the FSLA pursuant to the “sharing of the work” is a tentative step in this direction. That’s why Krugman, Auerback and company don’t bring it up and sidestep the real reform with a jobs program.

    Pie in the sky you say? Perhaps, but the first FSLA[1938]was passed in spite of opposition and there’s no reason to think that the second FSLA would fare any different, especially in the current political conjuncture. But if it’s choosing between a jobs program that perpetuates a dying economic model and a “sharing the work” proposal pursuant to something beyond it, which of the two is a real reform?

    1. Doktor Professor

      Sharing the work would also work. As you point out it has many advantages.

      The main disadvantage is that like the jobs programs it will never happen.

    2. Tao Jonesing

      Labor versus Capital is a false dialectic. All that matters is rents, and unless we break the power of the rentier, nothing will change.

      Classical economists recognized three elements to the economy: capital, labor and rents.

      Neoclassical economists “disappeared” rents from their constructs and models. To them, there was only capital and labor. Henry George believed that neoclassical economics was created to undermine his argument that debt-financed speculators created boom-bust cycles to drive up rents. If you don’t measure something, it doesn’t exist.

      As a practical matter, neoliberal economists have “disappeared” labor and capital, leaving only rents, although none dare say so. Officially, microeconomics forms the basis of the pyramid of economic theory. Built on top of microeconomics is macroeconomics. Finance rests atop the pyramid and is based on micro and macro models of our economy. There’s one big problem, though, and that is finance drives microeconomic decision-making, rendering all microeconomic and macroeconomic theory false. That is, finance is normative, and as a result it has flattened the pyramid of economic theory.

      Finance is rents, and labor and capital exist only to secure rents for the rentier.

    3. Sandwichman

      “What we really need is the amendment of the FLSA, reducing the work week to 32 hours or less, without any reduction in income, phased in over 4-8 years so as offset inflationary pressures.”

      Mickey Marzick has the right idea but I’d say it’s far too modest. A 32-hour week phased in over 4 to 8 years would’ve been ideal — for the 1980s. We missed that boat. Instead we’ve been playing Ponzi roulette for 30 years. Marshall Auerback seems to think that if we can place just one more BIG bet on the table, we can win it all back. “Trust me, just one more round to steady my nerves and I’ll quit.” Where have I heard that before.

      No. What we need is a transition to an entirely different economy. As Steve from Virginia sez “Step one: get rid of the teevees, step two, get rid of the carz. Then talk about jobs.” Although not necessarily in that order.

      Instead of “creating jobs” consuming all kinds of resources we don’t have and producing all kinds of pollution we don’t want, we need to be eliminating wasteful consumption and starting a transition to sustainable, human-scale production for use and organic farming. Instead of a 32-hour workweek, think in terms of a 21-hour paid workweek but supplemented with another 32 hours of self-provisioning, caring work and civic activism. In other words more REAL work but much less MARKET work.

      Yesterday, Dean Baker, Mark Thoma, Brad DeLong and Paul Krugman were all bemoan an editorial in the Washington Post that said “We Dare Not Let This [unemployment] Happen” (But Oppose Doing Anything About It). My response is to ask, “Hasn’t anyone read Michal Kalecki’s “The Political Aspects of Full Employment”?

      “Every widening of state activity is looked upon by business with suspicion, but the creation of employment by government spending has a special aspect which makes the opposition particularly intense. Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of ‘sound finance’ is to make the level of employment dependent on the state of confidence.”

      1. JustAnObserver

        In the Iain Banks sci-fi novels he posits such a far future society – called the “Culture” – as the end result of a long period of social evolution with almost all the the main productive physical work is done by very advanced artificial intelligences; the end limit of our current primitive automation. Everyone lives off a Grundeincomen in the sense that production is so vastly efficient that the marginal cost of producing anything is effectively 0 so what’s the point of charging anything called money for it.

        Of course the “Culture” does have the whole galaxy to play with so maybe we’ll have to wait for faster-than-light travel before the banksters can be overthrown :-((.

        Is sci-fi, once again, the only way we can get these kind of ideas or trends anywhere near the mainstream ? even if only to have them influence the – primarily young – “demographic” that reads this stuff.

    4. Toby

      Jobs to earn money to live is a dead model. We need to get passed this and on to steady state growth as quickly and as painlessly as we can. Germany is debating this quite hotly right now. Here a couple of samples (my translations):

      Prof. Götz Werner: The economy does not have the role of creating jobs. On the contrary. The role of the economy is to free people from jobs. And that is precisely what we have managed to do wonderfully well over the last 50 years. [snip]

      No businessman wakes up in the morning wondering how to stuff more employees into his business. The very idea is absurd. The question should be asked the other way around: How can I, with as little effort and as few resources as possible do as much for the customer as I possibly can? How can I better organize my business? And better organized always means: minimize work. This is a foundational business principle. [snip]

      Indeed a fisherman told me that Icelanders today, thanks to factory-ships, can catch four times as much fish with four times fewer fishermen than 30 years ago. Do you see? 75 percent of people are simply no longer needed. There are such examples everywhere. Our ability to produce things exceeds our need to consume them. This is a simple fact, and no job market reform can change that. [snip]

      We really have to ask ourselves: What is the real role of the economy? There are two. The first: It must supply people with goods and services. Never in history has the economy fulfilled this role as well as today. In fact we see a massive oversupply. Even though most factories are by far under-utilized, we can produce everything we can desire. [snip]

      We’re moving into a society in which jobs are disappearing. The simple question is what all these people are to do with all their time, which is a cultural question. The problem we have does not lie in the jobs market, but in the culture. Sadly, this subject is barely visible in society today. And yet it is precisely here that we have work to do.
      Taken from an interview in the Stuttgarter Zeitung, 02 July 2005.

      Prof. G. W. Werner / Dr. L. P. Häussner: Our social awareness is lagging a long way behind the possibilities opened up by the worldwide division of labour and the resulting rise in productivity. [snip]

      The dictum that technological progress and productivity increases create and destroy jobs in equal measure no longer applies today, and large sections of the population will become poor if we do not put earned incomes, which are diminishing because less and less labour is required to produce goods, on a new footing. As Goethe put it in Faust, “We are starving in abundance”.
      Source: “The unconditional basic income – from an industrial to a culture-based society”

      Professor Werner is the founder of a drug store chain called “dm”, which is a multibillion euro Europe-wide business that’s been focused on sustainable production of its products since its founding in the early 1970s. He now campaigns vigorously for a guaranteed income (Grundeinkommen), and is making considerable inroads. The problems we face are indeed cultural (e.g. ‘earning a living’ instead of being freed by the economy to contribute to society), all technical solutions are there, they just need a new socioeconomics to be sanely and sustainably implemented.

      1. Jojo

        The writing has been on the wall for years, as I have pointed out many time sin the past.

        Simply stated, we have too many people and too few jobs.

        Due to continual advances in automation (like your example of the factory fishing vessel), we will never again have an excess of jobs. The employer will always be in control from now on.

        What needs to be done is to limit the production of children.

        But of course, if we limit the number of children and can’t create enough jobs for them to work in, then how will we cover the the costs of Medicare, Social Security and so on?

        We are literally between the rock and the hard place.

        1. F. Beard

          We are literally between the rock and the hard place. Jojo

          Is that not what happens when one makes a deal with the Devil?

          Justice is the way out but who knows what that is?

        2. attempter

          Simply stated, we have too many people and too few jobs.

          Due to continual advances in automation (like your example of the factory fishing vessel), we will never again have an excess of jobs. The employer will always be in control from now on.

          Correct, meaning that the way the system is set up doesn’t provide enough jobs for the people. Which is why we no longer need or can support “the employer”. We have the wherewithal to let machines do almost all the work, while we have full employment at 10-20 hours per week which provides middle class lifestyles for all. The exact promise that was made in the post-war times.

          All we need to do is get rid of rents and “employers”. That’s what needs to be done.

          What’s that you say?

          What needs to be done is to limit the production of children.

          Um, no. In spite of your argument, you don’t get it. Is there any end to the self-misdirection people will engage in to evade the obvious truth?

          1. Jojo

            What’s that you say?

            “What needs to be done is to limit the production of children.”

            Um, no. In spite of your argument, you don’t get it. Is there any end to the self-misdirection people will engage in to evade the obvious truth?
            Say what???

          2. Tao Jonesing


            Let me try to restating what I think Russ was trying to say.

            Before we start recommending state regulation of people’s ability to procreate (what are you, the Sex Nazi? “No sex-a for you!”), we should consider changing the rules of the game to allow people to be people. The rules of the game are currently tilted in favor of the rentier, who is allowed to treat human beings like chattel in order to add digits to the electronic reflection of his alleged wealth.

            If we adjusted the rules of the game to eliminate the rentier class, i.e., the free lunch crowd, there would be more than enough jobs to go around, and there would still be wealthy people. Anybody who believes it is preferable to cockblock society in order to maintain the current ruleset is severely afflicted with self-delusion.

          3. Jojo

            @Tao Jonesing
            Oh. Well, both of you need to stop dreaming. The relentless march of automation and robotic advancements will not be stopped.

            Unless we cut our population growth significantly and quickly, there will NEVER AGAIN be enough jobs for all the people currently alive, let alone those born in the future.

            However, if we could stop automation in its tracks, now would be the time to do so, says Luddite Jojo. :)

            I read an SF book some time ago where you were allowed to have as many kids as you wanted, but each addition over one became steeply more expensive. The first might cost you $25k, but the 2nd would be $1million and the 3rd $25million, etc. This solves the problem on the low income side but unfortunately, it allows the sufficiency wealthy to build their own dynasties, which is not a good outcome.

          4. attempter

            Thanks for trying, Tao. Jojo’s clearly brainwashed beyond redemption and can’t even hear other ideas let alone understand them.

            (So I won’t even mention Peak Oil, which renders his dogmas physically impossible as well.)

        3. Sunny

          ‘ will we cover the the costs of Medicare, Social Security and so on?’

          Rising obesity in pre-teens, teens and young adults in US population will result in drastic reduction in longevity there by reducing stress on SS. But medicare and medicaid is different scenario. Rationing in Medical care is already here in various forms!

      2. Mickey Marzick in Akron, Ohio

        I knew I could count on you to pick up where I left off…

        Trouble is too many Americans still derive their value/meaning as individuals from the size of their paycheck, assuming that it’s an accurate reflection of their “value” to society. “I make more becuase I’m more productive, etc” regardless of all the empirical evidence to the contrary about marginal productivity…

        Such thinking reflects a psychological dependency on the presumed scarcity of skills – my uniqueness – that underwrites the dying economic model predicated on growth which in itself is predicated on artificially-induced scarcity. Unique skills seen more as something for exchange rather than a gift with which to elevate the human species. Hence, any discussion of a “guaranteed income” in the US will be dismissed as “utopian” and/or socialism/communism – even by self-proclaimed “progressives”.

        That’s why I proffered the “modest” idea of a second FLSA. For as subsequent comments have borne me out, Americans aren’t ready to abandon their psychological dependency on work to derive their cents of self-worth. If anything attests to the ideological hegemony of CAPITAL in this country this is it. Only when we begin to consider a “guaranteed income” as the birthright of every American, yet alone every human being, and subsequent decommodification of labor that flows from it will we move beyond employment to earn a living and an economic model predicated on unlimited economic growth.

        The old is dying but the new cannot be born…

        1. Toby

          This sounds doom-laden, but I believe we’re quickly running out of time if we want to progress to a more open and democratic society, and if we want to minimize the damage civilization is doing to its supporting environment. We are therefore–in my opinion–obliged to think through, in as unprejudiced a manner as we are able, what sort of socioeconomics we could, today, technically and sustainably organize. Such an intellectual exercise results of course in no party-political decisions, but does inform the debate, does add to our sense of ourselves as a species. To expect the current political structure to deliver the goods is both to waste time and to empower further the very stasis and decadence we must withdraw energy from. Because this is a cultural problem, because it is outdated myths we must confront and pierce, it is precisely discussion of what is technically possible that can prepare us, culturally, for the challenges ahead. To force this camel through the shrinking eye of the status quo’s needle would be to strip it of its healing vitality (to abuse the metaphor horribly). It is also the case that ongoing technical change requires ongoing adaptation on the part of society. Ours was built on the industrial model, assumes perpetual growth, and has very elitist ideas of human nature, all of which are now far less than helpful. So it’s not about doing something ‘fairer,’ it’s about a wise and pragmatic adjustment to new realities and new information.

          The means are the ends. If we do want something new–that is, democratic and open–we must use precisely those processes to set such a transition in motion. An interface between the current status quo and the new socioeconomics we establish is necessary, and that interface would, for reasons of structural coupling, necessarily be political, but the emphasis must be on the means, not on that which we are thereby replacing. The old system is already dead and poisonous. The longer we look to it to nurture us, the more harm it does. The function of such an interface should be to dismantle current structures as gently as possible, not to appease and sustain them. We must be clear on this. The power is with us, not with Them.

          For a desire to initiate what I’m outlining here to emerge at all, the discussions of humanity’s current technical possibilities must be wide and deep enough to generate motivating interest, as well as lend growing support to those activities and ideas currently at the fringe (local currencies, permaculture, guaranteed income, shorter working weeks), that can together build an infrastructure capable of supporting civilization through to its next phase.

          Changing culturally from ossified hierarchical, to open, democratic/anarchic processes cannot be forced, it must be organic. There can also be no guarantees, it is a risky venture, though far less risky than leaving humanity’s fate in the hands of the kleptocrats. It is up to each of us particularly and all of us generally (the change must consist of multiple community efforts) to contribute to our future as best we can, but first on the to-do list for the vast majority of us is self-education. No democracy can be sustainable, can have a chance of avoiding becoming a tyranny of the many against the minority, unless its people are relevantly educated, and unless public processes and institutions are transparent and inclusive. Because state education does little more than break children into malleable and unthinking consumers, this painful and long re-education can happen in no other than an auto-didactic fashion, beyond the reach of the state. The Internet is invaluable in that, and Naked Capitalism is one site playing a vital role (I have learned much here).

          As many have said, we can’t know how this is going to turn out, we can only contribute to the discussions and experiments in a scientific spirit, and let the best, most sustainable ideas win. The better equipped we are to contribute, the better chances we have as a species.

      3. tnjen

        Well then it becomes obvious – we’re moving away from the very concept of traditional work being a marker of someone’s value and (eventually) from a monetary exchange, and money as we know it, being either relevant or a requirement for obtaining not only the the things we need but also those we desire. Perhaps we’re even moving from an exchange system at all (no barter or service needed – let the robots or Star Trek ‘replicators’ do it).

        IOW, in a world/society where every need and want can be met without jobs for the people, the culture must completely shift its means of assigning value as well as how goods and services are obtained by people. After all, unless the desired outcome is economic collapse and/or bloodshed, freeing the economy from jobs (or people – from the excerpt it does appear that people = businessmen) means freeing the people from mandatory work in order to obtain things. Why fish? Because anglers enjoy doing so. Why start a business or pursue a degree? Because that’s what people who love such things do. Why make art? Because that is what artists do.

        Respect and admiration from their fellow humans and countrymen should be enough for all these businessmen, mass producers, and creators of goods and services. And much like amateur sportsmen and women, they’ll ply their trade for the love of the game and because they like being the best at what they do. And besides people will want to spend their time somehow.

        Otherwise, the options are untenable and ultimately undesirable to anyone who doesn’t fancy a world of starving Morlocks and rich Eloi until such a system finally collapses and the Eloi go down by virtue of no longer having even the Morlocks to sell to and exploit.

        Now until someone figures out how to make our culture(s) rapidly change to embrace a Star Trek-like Utopia where money is outdated and the domain of Ferengi, I think we damn well better figure out how to get JOBS to people through economic policy.

        1. Mickey Marzick in Akron, Ohio


          Your point is well taken. It will be a while before we get to this utopia.

          That’s why I suggested “sharing the work” – reduction of the standard workweek and abolition of overtime via amendment of the FLSA. One step at a time…

          I believe this is feasible, albeit in this political climate, it has about as much chance as the proverbial snowball in hell. Yet a jobs program perceived as “make work” will not garner much enthusiasm either. So we’re stuck and the unemployed/underemployed suffer the consequences of doing nothing.

          If “sharing the work” was to acquire traction though, do you think a jobs program might suddenly sound reasonable to those vehemently opposed to the former? Call it a bargaining chip from left field…

          Of course, we will likely get neither. And Obama will not get my vote this time around which is what Auerback is really concerned about – Obama’s prospects for reelection. What will it take? A jobs program to reduce unemployment/underemployment. But given the “alternative” does Obama need one?

          1. tnjen

            Mickey Marzick, I love your idea of sharing the work and it might just make a jobs program more viable. The trouble as I see it is that the political climate necessary for massive change was when Obama first entered office and he had the political capital to do so. Now, we’re caught in a bind where the stimulus is portrayed as a failure because all it ‘did’ was keep things as they were and a ridiculous debate about the debt ceiling is ongoing (that debate is so absurd it shouldn’t even be happening!). The regular American is terrified and it’s easy for them to accept the argument that too much debt will destroy the nation because they’ve watched it destroy both their personal finances AND the financial system. Try arguing abstract ideas against those two easy to understand examples — it doesn’t matter that a national economy doesn’t resemble a personal/family economy (remember most are terrified).

            So what to do now? I really don’t know. How do you get the POTUS both the political capital and the *will* to implement these things. The next crisis?

        2. Toby

          Your dismissal of a pragmatic consideration of the direction of change concludes with the very sort of Hail Mary you appear to scoff at:

          “I think we damn well better figure out how to get JOBS to people through economic policy.”

          Of course there is no way of snapping from one system to another, but there is also no way of arresting change, which your cry demands. Jobs are with us for a long while yet, but the trends are quite clear. Perpetual growth is impossible. Leaving it behind and setting up a sustainable socioeconomics requires a new money system, requires a new education system, requires, in fact, a new type of society. Part of that will be the slow change away from job-for-wage to work-for-pleasure/necessity. In the end we work either because we enjoy the work and/or because we desire the outcome of that work. Why insist on sustaining the very system which is both generating the problems we are addressing here, as well as rapidly becoming out of date? If we are to ‘create’ jobs, let’s do it with long term change in mind so that the jobs serve a useful and long term societal purpose, and stop kicking the can down the street. The longer we resist this, the likelier we are to pass the point of no return.

          And why jobs for everyone (would they deliver dignity?), and not a guaranteed income alongside a broad and lasting effort to re-educate ourselves to the new realities?

          As attempter points out, peak oil will present us with an insurmountable brick wall in the very near future. Why crash against it? Why not begin the process of genuine change now? This is not about utopia and robot slaves, this is about the practical considerations of where we are at as a species on this planet, and how badly the current system deals with that reality.

          1. tnjen

            I’m not dismissing it at all. Rather, I’m saying even if we’re on our way to this, unless you have a way of speeding things up, we have to deal with the transition which means jobs and/or income. Personally, I don’t have a magic wand to detach people from the system at hand.

          2. Toby

            This is something of a chicken and egg which traps my thinking too, tnjen. I’m quite convinced that current political structures and processes, including the money system, are broken beyond repair. On the other hand I’m attracted by the idea of guaranteed income, which can’t really be implemented outside The System (at least I don’t see how right now). Neither can it be effectively or sustainably implemented outside a change of the money system. Probably it will take collapse to get things moving in a sustainable direction, but even collapse is of course no guarantee of that, far from it. Hence the importance of open-minded discussions while we still can. Build the new idea-networks now, so to speak.

            You’re right of course, there is no magic wand, but I don’t think a ‘jobs program’ which fails to address the fundamental changes required will do anything other than speed up the destruction of the environment while attempting to sustain the irredeemably collapsing system. So, sadly and frustratingly, we have the relatively toothless options of informed and open discussions, and local initiatives (such as permaculture and local currencies), that have at least a chance of gelling to a strong enough beginning to weather the coming storms. It’s a cliche, but in the end it’s up to us, not ‘The Great They.’

  19. gs_runsthiscountry

    And, here we are 3 years later, “there is no more money, we are broke” is the narrative spewed repeatedly. We wouldn’t be broke had we spent the money on bailouts in the right place to begin with, or better yet, had not bailed out anyone. If there were bailouts to be done, it should have been ground up, not top down. Is anyone really surprised we are where we are.

    One of the most tragic things I have heard the last 18 months, is sitting in the student union talking to younger students and have them tell me they want to move to Canada. Seriously, I have heard this more than once and have to believe this has traction in the 18-28 yr gen. Seeing students so disgusted with our politicians at such a young age, it is eye opening to say the least. It is incomprehensible to me a students frustrations are so high they have shifted their studies to health sciences, in the hopes they may get a work visa in Canada if all else fails.

    Then there is the story of a former beer league softball teammate. I was asked to be a sub, they know I don’t play anymore, but I ask why? Well, he is gone and didn’t know that, because he signed up for the National Guard. I was floored – this person has a degree in business and a Law degree and is also tri-lingual. At the age of 29, having not found work, and faced with loan default, he felt joining the NG was his only option. WHOA!

    If people really want to get a feel of what is going on in this country go talk to people at workforce development office in your state, or park yourself inside a student union for a couple hours and talk to students.

    I am convinced people are going to have to die before things change. Understand, I am not advocating violence, but espousing my observations. People are going to have to die for lack of health care, rise in domestic violence, a general rise in crime such as robbery, rise in suicide because of desperation. But, that will not happen so long as people are pacified with unemployment checks.

    I have said it before here, I think a modern day Shays’ Rebellion is the only thing that will send a message or incur real change. Lest you think that is radical or hyperbole, I ask, what else will work at this point? How could anyone advocate going to the voting booth matters, knowing all we know about campaign finance. Just the idea things would have to come to that make me ill, but that may be the only road to some semblance of social justice in this country.

    1. Doktor Professor

      Unfortunately, people are dying for all of those reasons now.

      Still, there will be no change.

    2. tnjen

      Dying because of lack of health care, suicide, and domestic violence is already happening and won’t change things. No, something much more drastic is the only way things will change.

  20. Hugh

    I agree with most of the points made here.

    We are never going to have economic reform until we have political reform. Anyone who votes for any Democrat or any Republican has voted against political reform.

    The reason that any political or economic reform is not going to fly under our present system is because of the nature of that system which is comprised of

    1. Wealth Inequality
    2. Kleptocracy
    3. Class Warfare

    Discussing a jobs program in the face of these is an intellectual exercise. Still it is a discussion worth having.

    In terms of the political history, Bush had a dreadful record in jobs creation even before the December 2007 recession. As in so much else, Obama has followed Bush in making job creation a non-priority. Again nothing surprising in that. Scratch the verbiage and Obama is as conservative as Bush, as is the Democratic party generally.

    If we are talking jobs, it is important to distinguish between a stopgap program and a longer term one. Digging holes and filling them up again is perfectly fine, short term. But there are in fact many quite worthwhile jobs that need being done. Infrastructure repair is actually more of a medium to long term effort. However, there are a lot of possibilities in the areas of care for the elderly, education, community clean-up, and retro-fitting buildings and residences to make them more energy efficient.

    Longer term, our country needs to re-indutrialize in a green and sustainable way. We need to replan and restructure our communities to bring them back to a human scale, reduce energy, and make them more liveable. We need to move away once and for all from a fossil fuel based economy.

    And yes, we should be looking at these jobs not in terms of minimum wage but living wage. One of the things unions taught us was that raising the baseline pay for one group in an industry tended to raise it for everyone else. The demise of unions taught us also that the reverse is true.

    Finally, as long as I am in intellectual exercise mode, we should not look to just government as the job creator of last resort. Corporations are sitting on record profits in the trillions. I would tax these at 20% a year. I would tax executive compensation (salary and bonuses) above $250,000 a year dollar for dollar. This in addition to increasing marginal rates on all income to 90% above $1 million. Similarly, I would tax corporations on dividends dollar for dollar. And I would give tax breaks on any jobs created that A) were in this country, B)met living wage standards and C) lasted at least 3 years.

    1. Doktor Professor

      “Discussing a jobs program in the face of these is an intellectual exercise.”


      1. Tao Jonesing

        Our fiscal policy, tax policy, accounting rules and regulatory regimes are all geared towards exalting rent-seeking over all other forms of economic activity. As long as that is the case, you can’t bet against the Fed.

        But let’s be clear that the Federal Reserve’s power could easily be curtailed by adjusting the various policy levers to penalize rent-seeking and favor real domestic capital formation and investment.

    2. Cynthia

      Creating apprenticeships and other on-the-job training programs throughout the workplace will go a long way towards taking some hot air out of the bubble forming in higher education. Just think, if we can give tax breaks as well as offer subsidies to private-sector companies for training their workers, then students wouldn’t have to fork over an arm and a leg in order to secure a decent paying job in our nation’s workforce, thus collapsing the high cost of higher education and putting for-profit schools out of business.

      If private-sector companies refuse to create apprenticeships and other on-the-job training programs for their workers and refuse to stop the grossly unpatriotic practice of shipping their jobs overseas, then we can slap them with enormous fines. And if they refuse to pay these fines, then we can treat them like we do all enemies of the state: lock them up in Gitmo and throw away the key.

      That way Barack Obama and his fellow torture-mongers can enjoy watching real-time footage of GE execs and other unpatriotic sociopaths from Corporate America being waterboarded to the point where they are just a hair’s breadth away from death. I’m counting on our torture regime doing the right thing for a change.

  21. Tao Jonesing

    There once was a time I could have advocated a jobs program, but I no longer can. Any federal program ostensibly created to help the little guy will be designed to further harm the little guy. That’s what Dubya did, and that’s Obama’s doing. Double truth is now standard operating procedure.

    The problem is that nobody is willing to invest money in America. Unless and until we adjust the tax laws, accounting rules and import laws to encourage real domestic investment, Americans from all walks of life will bypass investing in Main Street in preference to gambling in the casino that is Wall Street.

  22. PQS

    I agree with Attempter, okie, and Hugh above: any jobs program needs to challenge the status quo, not cater to it. I don’t like the idea of jobs programs with “a goal” of a living wage. WTF is that? Every job should pay a living wage. Right now.

    Auerback’s contention of a living wage as a “goal” also betrays his biases in analyzing the problem of unemployment, and he makes the same mistake most of our Policy Eleets are making in that they both assume that the masses of unemployed are low or no skilled workers who have been displaced by globalization. News flash, Mr. Hedgie: that happened about 20 years ago. The people who are out of work today are middle class people with work histories, skills, degrees (many of them), and are, I would bet, mostly middle-aged professionals. They don’t need to dig holes, for Pete’s sake. They need the jobs they had before Wall Street gambled away everything on their backs.

    I know, because I’m one of them, and almost everyone I know in the business is or has been in the UI boat since around 2009. I have two college degrees and 15 years’ professional, white-collar, technical experience. Unfortunately, I chose to go into construction. We’ve had over 20% UI for years and years. And now that the ARRA money has all been allocated or spent, the government work (tiny work – not Halliburton stuff) is drying up. I was recently laid off from a government contractor doing around $30M a year in volume – nothing big by any standard in construction, but there is just nothing to do right now.

    Hugh makes the point I was going to make, which is that there are other ways to essentially force the Masters to start hiring people – via tax policy and cutting off their foreign and other loopholes. I would add that DC needs to promote an actual energy policy. There’s no reason Boeing and Lockheed need to be making more weapons – they could, with enough prodding, shift gears to help solve our energey and transportation problems. But this takes investment on the part of the government to push it along. And those aren’t hole-digging jobs, although once the projects get going, there will be plenty of those.

    Properly promoted, such policies would be wildly popular with most Americans, many of whom, I believe, are beginning to wake up to the fakery of “trickle down” and other nonsense. They may not know all the economic details, but they know the rich are richer than ever and nobody is doing anything for THEM, except threatening to take away their SS and Medicare.

    1. Doktor Professor

      The government simply doesn’t care about unemployment because evidently unemployment doesn’t stand in the way of its role in continuing the current rackets. It’s really that simple.

  23. Glen

    Choices for Main St are rather stark.

    Republicans will talk about saving the country and then pass laws saving the country – for the rich – everyone else will get screwed.

    Obama will talk about saving the country and then make back room deals to support laws saving the country – for the rich – everyone else will get tossed a small bone to chew on and repeatedly told how the Republicans are worse (by a hair).

  24. F. Beard

    Why are taxes on ill-gotten gains the usual solution offered by progressives and liberals? How does paying the government help the victims? Because some of the recovered loot will trickle down to them after 90% has been wasted on bureaucracy?

    How about eliminating the theft in the first place? Is that too simple for such brilliant minds?

    1. Tao Jonesing

      The real value of taxes is not to take a portion of ill-gotten gains but to deter behavior that results in ill-gotten gains and to incentivize behavior that is more socially beneficial.

      The idea of taxes as some kind of taking a static thing is a facile one that especially benefits the rentier class.

      1. F. Beard

        The real value of taxes is not to take a portion of ill-gotten gains but to deter behavior that results in ill-gotten gains and to incentivize behavior that is more socially beneficial. Tao Jonesing

        Ah yes. Tax shelters if only the evil businessmen shall do what the good progressives and liberals demand of them?

        1. Tao Jonesing

          Another facile idea intended to distract (aka, a red herring).

          I’m not talking about tax shelters. I’m talking about adjusting the levers to encourage real domestic investment in productive capital and punish speculation.

  25. Joe Rebholz

    Rather than a jobs program we should create an education program. Everyone who is unemployed, or otherwise has time, or who is presently a student should be paid a good living wage to go to school or college for as long as they want to and they should be allowed to study whatever they want to. This will not be make-work. If humanity is to have a future, if democracy is to have a future, if we are ever to get over the idea of physical growth forever, we need to create way more of humanity’s best product: immaterial knowledge.

    But instead our system attacks teachers and taxes people more and more to educate themselves. The main beneficiary of education is not the individual educated but rather all of humanity.

    1. J. Anderson

      If people are to be paid a “living wage” (who defines that, by the way?) then what about all of those persons who have a job right now but decide to “get fired” so that they can relax in a classroom getting and get paid for it? Any idea how much this would cost?

      And…who’s going to pay for that? I don’t want to pay for someone else to go to school. What if I refuse to pay? Oh, right, I go to jail. Welcome to Amerika!

      1. F. Beard

        And…who’s going to pay for that? I don’t want to pay for someone else to go to school. J. Anderson

        The irony of fascism is that it leads to socialism as the victims discover they can use government too.

      2. Jethro

        Bankers get paid to relax, why shouldn’t everyone else? Lazy, debt-slave owning, envious, greedy Bankers living off of our hard earned money. What’s next? Ownership of all three branches of Guv’mint that they done bought with our money – who’s gonna pay for that? Dag nabbit, I can’t protest the socialism ’cause I’ll be in jail. Welcome to ‘Murika and God Bless FOX News!

    2. Lurker

      That’s actually not a bad idea. It beats paying people to sit at home and watch T.V. because they lost their job.

      1. gs_runsthiscountry

        Do you really believe that’s what the majority of unemployed do? With admissions to higher education in all forms busting at the seams?

        There is never a shortage of fallacies surrounding Americas unemployed. I had typed something up earlier, but decided not to post as it was too long. I thought I might clog up the thread here…but on second thought…..

        1. Lurker

          Well, for a while at least they are up to their eyeballs in tricky paperwork, waiting in long lines, sending out resumes, and pounding the pavement. After about a year of that, they either break down and get a minimum wage McJob, or max out their credit cards and eat at soup kitchens.

          Still, they find time to watch TV, not that I blame them.

    3. gs_runsthiscountry

      Or maybe we should restructure k-12 education and make parents accountable?

      It is the breakdown of k-12 which creates a feed back into higher education. Employers now are hiring those from a 2yr junior or technical college to ensure they can read and write, hiring those with a 4yr degree to run machines and do work arguably less that require less than BA or BA degree. You now have to have a masters degree to separate yourself from the rest of the workforce, and then you are overqualified.

      Indeed, the value of upper education is being diminished and at the same time becoming cost prohibitive, and many times not required to do the jobs people are doing.

      Another point, the education programs you speak of already exist, albeit, in a bit dysfunctional form and need to be revamped. Those programs were designed decades ago and not in any way designed or equipped to handle the economic crisis, nor record unemployment. Hence, those programs have become a total breakdown, even though they are supposed to exist to fill the gap in structural unemployment, displacement via NAFTA and thus provide structural retraining. Google Workforce Investment Act and Trade Adjustment Act.

      However, how can you retrain people when 60% of those hitting the WIA program do not have a High School diploma, or are not otherwise prepared for college.

      Those (myself for example) with the means to do so, are retraining and changing careers, the truly structurally unemployed. Persons such as myself are only part of the picture though. We have long term issues with education, but “higher education” has nothing to do with unemployment at this time. We have record numbers of undergraduates and graduates working as waiters, waitresses, and bartenders, or just plain can not find work.

      If we truly had a shortage of engineers in this country they wouldn’t be in school training to be a nurse or bartending. The magnitude of structurally unemployed is overblown in some respect, however, lack of a good high school education is not.

      So, that said, why is it those such as Alan Greenspan and the Immelts of the world are advocating we import more skilled labor via visas? Why is it a company such as the Carlyle Group gets on on CNBC and complains there are not enough engineers – but then you search far and wide all job outlets on the internet, and the Carlyle Gp does not have jobs listed for engineers??

      In the Midwest there is a complaint by manufacturing firms they can not find welders. Welders that actually need at min a year of schooling or more, and additionally need multiple certifications before they can work on many projects. (Note: this was an existing problem before the crisis hit). The avg wage offered is $12-13 dollars an hour and no health care for welders. The new trend in America “the vagabond employee, better known as “casual worker.” Amazingly, in the face of this supposed lack of labor, wages do not increase, interesting no? So I ask, is their really a shortage? Google Oshkosh truck,, Mercury Marine, Harley Davidson etc.

      It is all an ongoing moment toward WAGE COMPRESSION and our march to equilibrium with the wages of 2nd and 3rd world countries in my opinion.

      The future of America is the “casual workers” making just above poverty level, with who knows what for health coverage, and many of which will be the ones left with staggering student loans that can not be discharged during bankruptcy.

      Google “Malcom Harris bad education” or “Alex Jurek Underwater Mortgages, student loans”

      1. Lurker

        The purpose of importing skilled workers from other countries is precisely to displace American workers with cheaper and more readily abused foreigners. It also helps drive down wages.

        It’s called class warfare and you’re getting creamed.

        Any other questions?

        1. gs_runsthiscountry

          Yes, I understand that all to well. Those questions were rhetorical in nature – read between the lines.

    4. Tao Jonesing

      Educating the unemployed won’t create jobs, nor will it allow the unemployed to compete with those who already have jobs. We have plenty of unemployed people who have as much if not more education than their employed counterparts, but they are passed over by employers because they are unemployed.

      Jamie Galbraith dispensed with the stupidity of education programs in his book “The Predator State.” Read it.

      My bottom line is that every American adult willing to work should be able to find a job at a fair (and living) wage, regardless of educational level. Unless you create incentives to invest in domestic businesses over financial speculation, the jobs won’t be there.

      This just points out another reason why a jobs program is a bad idea: it is merely a bandaid that allows the current pro-rentier ruleset to continue for a few years more. An education program is a similarly bad idea that does nothing to address the real problem, which is that American policy encourages capital flight into foreign markets.

      1. Lurker

        No, the real problem is that Americans are too easily hoodwinked and education has some possibility of helping them there.

  26. Jojo

    It’s a given that the Republicans don’t have any interest in job programs/help for the unwashed masses.

    OTOH, the ONLY reason that Obama and the Democrats might want to start worrying about jobs is that campaign season is coming around again. Since the Dems made the deal with the Pubs last December to extend long-term unemployment coverage through 2011 (in return for continuing the Bush tax breaks for the wealthy), have you hear anything out of them about jobs? About the 9% [official] unemployment number being too high, about any initiative to help reduce unemployment? No, I don’t think so.

    The Dems were lucky to have the temporary U.S. Census jobs in 2010 which helped reduce the unemployment rate. But they still wound up losing seats in Congress!

    The Dems have nothing like the Census for 2011/2012. So what will they do to help unemployment?

    1. Tao Jonesing

      The Dems won’t do anything. Other than their rhetoric, which is aimed at their respective bases, there is no difference between the two parties, both of whom serve the rentier.

  27. Force Placed Obummer

    Obama needs to get serious about resignation, either that, or the people must demand impeachment.

  28. Jimo

    I for one have never understood why the Democratic Congress did not institute a direct-hire jobs program targeted at key unemployed persons. Gov’t can’t do it all but it would sure have helped if a few million could be off the job market for a year or so.

    Why not:

    A. in lieu of long-term unemployment benefits, the gov’t offered a job and training for those 45-60 who could qualify for an open gov’t position (that is, a policy of hire the unemployed first, if qualified, for open slots)?

    B. offer work and training for temporary (2 yrs?) positions in computer, medical, various technical positions in the gov’t at low levels?

    C. make hiring college graduates a bigger priority?

    Sure, I now this would still leave over 10 million unemployed but the boost in economic confidence in having less competition in the job market for a while would be great. And the enhanced resumes for these hirees would pay long-term benefits all around.

  29. Ignim Brites

    There won’t be a jobs plan under this Congress. The only possibility is for the Dems to take back the House in 2012. Can Nancy Pelosi lead the charge for a jobs plan with Obama at the top of the ticket? That is doubtful. Time for a progressive to step up to the plate and challenge Obama with a jobs plan as the centerpiece of the challenge.

    1. Ignim Brites

      Just an additional thought on this: A primary challenge from the left might force Obama to dump Geithner. This might be enough to give him the credibility to embrace a jobs plan at least with the base. As it stands now embracing a jobs plan after the failure of the 800 billion stimulus to deliver as promised will expose the administration to withering criticism. Obama will need the base to withstand that.

      1. Lurker

        Who cares? No, really, who cares?

        Why don’t you write off the Democratic Party the way they’ve written you off?

    2. JustAnObserver

      Given the bait-&-switch applied last time hope for any “progressive” (however weakly you define the term) is a non-starter. The tactic of huge effort to get out the vote last time didn’t really result in anything meaningful.

      So it strikes me that the only thing really worth going for in 2012 is the opposite tactic of mass abstention. Either get the turnout down to sub-10% or adopt a “None of the Above” write-in campaign. Like the mirror image of those old Soviet elections we should try very hard to ensure that anyone elected has < 1% of the vote.

      So sad that spoiling your ballot may be the only effective political action any individual can take.

      1. Lurker

        Instead of staying home, why don’t you “waste” your vote on someone like Cynthia McKinney, Ralph Nader, Bob Barr or Chuck Baldwin?

        It’s not like someone is forcing you to vote for the corporate stooges.

      2. Jojo

        The problem with that idea is not voting is the same as letting someone else vote for you.

        Until the USA implements a rule that requires a candidate to gain some percentage votes of the TOTAL population, not voting will not be a solution since a candidate can win as long as one more person votes for one side.

  30. pezhead9000

    Welcome to France! Meet Auerback’s new deal (ND2.0) – the same as the old deal (FDR).

    “while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” –Alexis de Tocqueville

    “There is no more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all our economic ills. Is private industry partially stagnant? We can fix it all by government spending. Is there unemployment? That is obviously due to “insufficient private purchasing power.” The remedy is just as obvious. All that is necessary is for the government to spend enough to make up the “deficiency.”

    An enormous literature is based on this fallacy, and, as so often happens with doctrines of this sort, it has become part of an intricate network of fallacies that mutually support each other.”

    Government Projects do not “Create Jobs”
    “State projects may create jobs, but the proper question is, do they create wealth? The state could easily reduce Michigan’s unemployment to 0% by mandating that every unemployed citizen shovel dirt on some state project without pay. Employment alone is not a good indicator of economic success; overall wealth is. Even if state spending can “create jobs,” creating jobs alone does nothing for our state’s overall prosperity or standard of living.”

    1. F. Beard

      “State projects may create jobs, but the proper question is, do they create wealth?” ECONOMICS IN ONE LESSON

      Here’s a few more questions:

      “Does injustice reduce wealth?”

      “Would not restitution restore that wealth?”

      “Is our banking and money system unjust?”

      “Then why are the folks at not crying for restitution?”

  31. joebhed

    I have a problem with Marshall’s description of our economy as “credit-based”.
    It’s credit-based for the creditor class.
    It’s debt-based for the Restofus.
    As in, a debt-based-money system.

    But the only problem I see with the job-solution of Marshall and other MMTers is this.

    It has the taint of action for perfecting this market economy of neo-liberal economics.

    For all those advocating the new way of thinking about getting real resources to the people in need – job or no job – think about this.

    First, nationalize the money system.
    Then, democratize the benefits of the money system.

    Problem solved.

    The National Emergency Employment Defense Act of 2010.
    Because it’s the debt-based money system that’s broken.

  32. pezhead9000

    “Does injustice reduce wealth?”
    — yes, it can

    “Would not restitution restore that wealth?”
    — Once a victim, you can never be made whole again regardless of all the king’s horses and all the king’s men

    “Is our banking and money system unjust?”
    — yes, we have a few million witnesses

    “Then why are the folks at not crying for restitution?”
    — You’ll have to ask them yourself:

    1. F. Beard

      You’ll have to ask them yourself: pezhead9000

      I already have. They follow an agnostic, gold-bug, Jew, L. V. Mises over a believing Hebrew, Moses.

      Furthermore, and hypocritically for so-called libertarians, they are in favor of government recognition of gold as money. But that is fascist, not libertarian. That renders the rest of their beliefs suspect.

  33. skippy

    I find it curious, that on a blog that recognizes planetary reduction by human activity, that more, would be any kind of a solution. Humanity does not act within a vacuum…eh…what good will all the ideological positioning, theocratic musings, market based consumer focused research_mean_if…our first priority is to work out this worlds carrying capacity (hundreds of years froward) and position our self to it.

    Exponential forces, post industrial revolution, are starting to hit its strides (century’s of human activity [all human activity has a negative impact on its surroundings] are now condensed into decades, all acerbated by increasing / strengthening climate change / weather patterns). These forces are now easily observed and measured globally with more metrics coming on line, so its really a case of predisposition to deny it.

    So on one hand we have human activity defined by economics / religious / political / social constructs axises, seeming over laid upon a blank slate, where as in reality, there is a planet under neath it all, base line of it all. If this paradigm of human activity does not take in the general health and well being, of its home, the rest will be for not.

    Skippy…slow accumulation, out side generational observation (ones life time), is becoming tomorrow today re: human effluent solids being used as local fertilizer just out side Sydney, is being questioned, after cases of illness only associated with human feces contact have been observed. This in a modern city.

    1. F. Beard


      Life is an art, not a science. Who knows what the planet’s carry capacity is? According to Malthus we should have had massive starvation long ago.

      But it is our debt-money system that drives exponential growth. Fix that and the growth imperative shall be greatly reduced.

      1. skippy

        Every civilization known to humanity, once it crates a utilization tipping point with regards to its environment, has collapsed. The majority of theses resided in the southern hemisphere, with a few, on a local level in the northern ref extensive trade routes had not been established or with sufficient capacity to offset imbalances between consumption and local resource potential (whether man made, climatic changes or tectonic). The reason for this disparity between hemispheres is directly related to the differences in environments and their carrying capacity.

        The northern hemisphere, after the ice age, became an ideal habitat for humanity. After much trial and error, collectivization of populations (most by force) trade routes were established with enough capacity to over come local environmental degradation again (whether man made, climatic changes or tectonic).

        It is my and others observation that this system capacity is now at its peak, factors include energy, environmental offsets of human activity, climatic, tectonic, *vulnerability* to either a slow reduction in capacity to utilize non local resources or dramatic (any where with in a 50 year time line).

        It is classic the utterances echoing in history by the elites, the gods are not happy with our wickedness repent[!](austerity for the masses, self flagellation, bigger sacrifices for the god[s {of coarse through its/their intermediary’s}, basically blaming every thing on every one else save them selves. Its always externalizations! (see ie: jobs, debt, ideological / religious fractious din, more fear / need to be reassured by betters).

        Look at Japan, 20% reduction in line energy (massive loss of productivity), thousands of kilometers of arable, habitable, water shed, land meets sea interface, environment taken of the menu. All whilst Japan imports 60% of their food needs. If not for international trade capacity they would be fuked, now over lay that with the future debt servicing yet to be fully weighted, in an increasingly unknowable future. Storing potential, until our grasp is not strong enough, the backlash will be epic.

        Skippy…we could live well, knowing save some cataclysmic event (of which we would have no control over in the first place) and discuss all the vagary’s of the mind, but, for some unknown reason (maybe ideologues and godheads yell louder, push buttons better, or are just plain psychotic in their beliefs) the cart is put before the horse. Go ch3eck out mesoamerica, south america, africa, australia, and tell me why they did not continue the accent they started. Why the northern continents were able to continue past their heights, a clue is it had nothing to do with race (no such animal), religions, or ideological mind set.

        Cough but the classical mind said were better…hahahahaha!

        Be well beard.

        1. F. Beard

          ..(austerity for the masses, self flagellation, bigger sacrifices for the god[s {of coarse through its/their intermediary’s}, … skippy

          Where do you pull these caricatures from? They don’t come from the Bible.

          I read the Bible and it is concerned with justice for the poor.

          As for bigger sacrifices for God:

          For I desired mercy, and not sacrifice; and the knowledge of God more than burnt offerings. Hosea 6:6 (King James Version)

          “But if you had known what this means, ‘I DESIRE COMPASSION, AND NOT A SACRIFICE,’ you would not have condemned the innocent.” Matthew 12:7 (New American Standard Bible)

          1. skippy

            Who cares what words are slung from dry pages of demons flying into pigs, the only thing that matters is who welds them and to what misanthrope, more have died in its name by towers calling, than it has comforted.

            Seriously Beard, too take a tome (fiddled with for century’s) and only pick verse[s out of chasm’s chapter separation (removing all referral context), completely disavow all historical precedent (forensic archeology, cross referenced and constantly updated) out side its covers is_well_absurd and sucks oxygen out of the discourse, but that’s the trick ain’t it. Keeping the sheeple constantly doing mental laps of why thing are the way they are, but in the end its all a big plan, so dress right solider and eyes front. Second is the guilt instilled, upon questioning its validly, dressed up as sign from above to repent, see cult again.

            Isaac Bonewits provides an “Advanced Bonewits Cult Danger Evaluation Frame” [2] (first published in his book “Real Magic” in 1979) intended to evaluate the degree of resemblance of a given religious or secular group to what the observer using this tool might consider a “cult.” As he puts it,

            “The purpose of this evaluation tool is to help both amateur and professional observers, including current or would-be members, of various organizations (including religious, occult, psychological or political groups) to determine just how dangerous a given group is liable to be, in comparison with other groups, to the physical and mental health of its members and of other people subject to its influence.”

            His checklist, known as the ABCDEF (“Because understanding cults should be elementary”), allows the user to evaluate groups on a scale of 1 to 10, on the basis of 18 factors, namely:

            Internal control
            External control
            Wisdom or knowledge claimed by leaders
            Wisdom or knowledge credited to leaders
            Front groups
            Sexual manipulation
            Sexual favoritism
            Dropout control
            Surrender of will


            Skippy…pathological cults, with a policy of_your in or out_are well represented in Humanity’s history, they always break down in the end. Look into it. Personally for myself, me need not employ others thoughts to see the relevance of looking out for each other, I can do that off my own back.

            PS. taken in its totality, both books (one a political revision), are monarchist symbolism…Kingdom of Heaven, Lord, Love Me or Feel my Wrath, Bow Down before ME, etc, cherry pickers wet dream methinks.

            Be well Beard.

      2. skippy

        Malthus was unable to factor in the petrochemical / technological advances, this is not a steady state equation, our interconnectedness is a change in the axis position, changes are occurring in its position. Necessitating more and more conflict, seeing whom can push that reckoning back the farthest, advantage over all others.

        Why the hell do you think so much money / debt via groups are being thrown at now, end games!

  34. Francois T

    Obama hasn’t displayed any sense of urgency about jobs until now. Why would he start all of a sudden? It’s not as if a reasonable and thoughtful GOP challenger was visible on the horizon; quite the contrary in fact.

  35. Timothy Gawne

    Excuse me. Obama IS serious about jobs. He wants to make sure that there are not enough to go around. So that wages will be low. And his wealthy patrons can get even richer. Duh.

    Why do you thin that Obama is importing a record number of foreign workers? The economy creates 100,000 jobs in a month, Obama imports 100,000 workers, unemployment stays high. Do the math.

    And then there are the Wall Street bailouts, throwing money at stupid pointless foreign wars while moving to gut social security and medicare, etc.etc.

    Obama is a corporate shill. He LIKES high unemployment, it’s his job!

  36. Jeff Streep

    How about a basic income guarantee? This is being looked at now in Germany, a plan to guarantee an income of 1000 euros per mont to all German citizens. Give everyone an income, but allow people to work and earn on top of that. That would immediately cause some people to drop out of the workforce, freeing up more jobs for the most industrious people.

    Check out the book “The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future”

    Amazon or Free PDF at

    It argues that a basic income guarantee will eventually be required because more and more jobs will be automated (think 20, 30 yrs from now). The author also suggests the income should be variable based on incentives, so you get more if you educated yourself, act in environmentally responsible ways, etc.

  37. Eureka Springs

    I would just like to add – trade policy… must be addressed. Fair trade… we shouldn’t be pitting ourselves against 2 to 40 dollar a day labor. it’s not working out.

    we can and should make our own plastics, electronics, bicycles, hammers, freshwater shrimp, etc. etc….. at least half the items on a wal-mart, hardware, clothing, food store shelf.

  38. A Real Black Person

    “it’s not working out.” I beg to differ. If anyone still thinks the goal of capitalism is to create full employment, they are delusional or just plain,old-fashioned intellectually dishonest.

    “income should be variable based on incentives” It already is.
    “if you educated yourself,” Yes, someone becomes educated in something technical, then their potential income is greater than it would have been otherwise.

    “That would immediately cause some people to drop out of the workforce, freeing up more jobs for the most industrious people.” Isn’t industrious another word for productive and isn’t productivity at record levels currently and doesn’t high productivity mean less creation of jobs?

    “act in environmentally responsible ways” It seems to me that capitalists don’t care about the environment in any meaningful way. Its customers don’t, so why would they? What is good for the environment is paradoxically bad for humans. With seven billion humans overpopulating the planet, more fish in the sea means millions of people going hungry. Less carbon emissions means more social unrest. There’s not a lot of room for cutting back. America won the Cold War. Let it and the world suffer the consequences of global industrialization.

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