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Posts Tagged ‘Robert Waldmann’

Why beat a straw man when you have Larry Summers?

November 16, 2009 Leave a comment

“I think we got the Recovery Act right,” Larry Summers, the president’s chief economic adviser, said in an interview. “The primary objective of our policy is having more work done, more product produced and more people earning more income. It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.”

Thank GOD for Larry Summers!

Isn’t wonderful, when you need an easily identifiable buffoon to ridicule, that you spot Larry Summers across the room? There you were mercilessly beating a straw man, and in walks the real thing!!!

Do you need any more evidence?

We have stated previously that unemployment is not caused by recessions, it is not caused by slow economic growth, it is not caused by the steady improvement in productivity. And, of course, on this account we must be insane, because every discussion of the problem of unemployment by pundits, politicians, business leaders and economists returns to these problems and the pressing issue of how they can be contained and eventually reversed in order to spur the creation of jobs.

The Messiah wonders aloud “how we can work together to create jobs and get this economy moving again.”

This induces a flurry of proposals from economists:

Mark Thoma informs us that he,

“expect[s] structural unemployment to be higher than it was, particularly in the next few years. We had too many resources in housing, finance, and automobile production, and it will take time for the economy to make the necessary structural adjustments … the new target rate of unemployment will rise above the 4 percent level it was at before the recession.”

It’s the new normal, don’t you know. He proposes,

“job training that promotes a better match of worker skills with available jobs, programs that help workers move to places where jobs exist, and programs to induce firms to locate where there is an oversupply of workers, e.g. Detroit, can mitigate some of the impact. Extended unemployment compensation can also cushion the blow for workers during the adjustment period.”

Someone need to tells Mark that there were no plantations in Detroit in the 1840s. Black people became the majority population there because they moved there to find work – and the jobs almost immediately started leaving.

Mark, if you ever happen to read this: FUCK YOU! And stop letting your wife cut your hair – it looks simply awful!

Robert Waldmann over at Angry Bear blog – which should be renamed the Slightly Miffed Wimp Ass Liberal – thinks we just need to further complicate the tax code – because the IRS is just not big enough. He proposes to take tax revenues that don’t even exist yet, and may possibly never exist, and use them to fund the very companies that are already moving their operations to China and Brazil where an economic recovery is already well underway.

I think that there should be a combination of subsidies for new hires funded by revenues from cap and trade (I’m a member of the Pigou club) and an increase in the progressivity of the tax system (not just because I always want to increase the progressivity of the tax system).

Robert, the proper spelling is S-W-I-N-E club, not Pigou. (The OU is silent) And, to be a member you have to believe that anyone who supports a shorter work week also believes there is only a fixed amount of work to go around.

The idea is that there is a fixed number of hours of work demanded and it is better if everyone works part time than if some are unemployed.

Oh. Okay, you qualify.

Another proposal we found interesting, of course, was that of Saint Paul Krugman.

Paul’s sudden conversion to the gospel of shorter work time, unfortunately, is badly marred by the fact that he refuses to acknowledge Tom Walker’s almost continuous monologue on the subject for years – occasionally interrupted by the nay-sayers and the economic field’s equivalent of anti-European Know Nothingism – a slur on the know nothing movement, of course, since at least they split over the issue slavery, while that appears to be the preferred mode of life for the economist.

Says Paul:

The first-best answer — that is, the answer that economic models, like my old Japan’s trap analysis, suggest would be optimal — would be to credibly commit to higher inflation, so as to reduce real interest rates.

The second-best answer would be a really big fiscal expansion, sufficient to mostly close the output gap. The economic case for doing that is really clear. But Washington is caught up in deficit phobia, and there doesn’t seem to be any chance of getting a big enough push.

That’s why, at this point, I’m turning to what I understand perfectly well to be a third-best solution: subsidizing jobs and promoting work-sharing.

Boy wouldn’t you just love being Paul’s date for the prom? My first choice was Beyonce, but she won’t be born for another twenty years. My second choice is Harold, but we’re all still homophobic here in the Sixties. So, I thought, why not take you?

Paul is forced to touch the third rail of economics – work time – reluctantly, and simply because a combination of policy inertia and unconscionably high deficits make all other options unlikely.

Hint to Paul: That is the point of the exercise, buddy. The reduction of hours of work is forced on society because there is no alternative. Every other scheme to avoid such a reduction is cut off – every con game to restart the old normal; every collusion between Washington and Wall Street; every machination to push the consequences of over-work on to those who do the work – it all fails, and finally you will be compelled to limit working time on pain of catastrophe.

Did you think anyone had faith that you and your colleagues would voluntarily limit your blood sucking out of some sense of charity?

Listen Paul, you’re off our shitlist, but you’re still on Double-Secret Probation until you apologize to Tom Walker and Barkley Rosser for stealing their insights.

UNEMPLOYMENT IS THE PUBLIC POLICY OF THE UNITED STATES GOVERNMENT

Can we be any more explicit in this?

Do we need to offer any more evidence than the words of the chief economic adviser to Barack Obama that, “The primary objective of our policy is having more work done, more product produced and more people earning more income. It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.”

The policy is to encourage unemployment, the primary objective of that policy is to compel more work, more product, and more wage slaves by pushing people to the edge of starvation. This is the official policy of the Obama administration – not our interpretation of that policy arrived at by deduction – the official policy!

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