Jobs, Jobs, Jobs: GUARANTEED! — May 20 update
Class war? What class war?
“Everybody wants a piece of Kelton these days because a simple, radical idea she has been workshopping her entire career is the next big thing in Democratic Party politics. She calls it the job guarantee… “
- “Once an outsider, her radical economic thinking won over Wall Street. Now she’s changing the Democratic Party.”
- “A onetime college dropout at California State University in Sacramento, Kelton has managed to earn the esteem of both Sanders and an oddball clique of multimillionaire Wall Street traders.”
- “If you listen to Kelton long enough, you notice that she never refers to “bankers” or “Wall Street” with the derisive tone common among her political allies. She talks instead about “the financial community.”
- “After all, Wall Street took her under its wing before Democrats took her seriously.”
- “Her career had changed tracks. She wasn’t just a clever economist with some quirky ideas anymore. Her credibility with Wall Street began to register as academic clout.”
- “There are thousands of left-wing economists. But it’s hard for the economically inexpert to distinguish brilliant creativity from quackery. Kelton’s social credentials with Wall Street helped her stand out.”
I dunno what that’s about. Something about Wall Street?
“The basic idea is that the government can’t run out of money,” Kelton said. “It creates money just by spending.”
Where have we heard this before?
It is tautologically true that the government “can’t run out of money”. What that money is good for, though, is a separate question. An author can’t run out of words. But if those words aren’t chosen carefully, no one will read them.
I am thinking it is about a pony for everyone.
Well, there are enough ponies for everyone; it’s just that a few people own all of them.
The trick is to reverse engineer MORE ponies from the droppings of those ponies. At least these will not be “bullshit jobs.”
Government sponsored jobs a la the WPA aren’t bullshit jobs except in the sense that the wealthy won’t pay for them voluntarily. The did, at the time, produce real value for the society.
This seems to be an odd time to bring up “guaranteed government jobs” what with <4% unemployment, lowest since 2001. Every employer I know is scrambling to find, not qualified people, just bodies. This is at $12-$15/hr.
I can't even imagine if you throw $15 guaranteed government jobs into the equation.
The employment rate depends on where the people are. Rural whites and city black and brown people do not come close to fitting the national rate. Then there’s that small matter of benefits.
What the MMTers never admit is the real possibility of investors becoming afraid of US securities. They can easily take their action elsewhere, and will if the government begins spending unwisely.
But they cannot talk about that, as the entire thing collapses at that point and could actually lead to accurate cries of “We’re becoming Greece! Greece I tell you!”.
The other immense and unsolvable problem is that tax increases (which would be the only way to stop inflation) would have to be an automatic stabilizer. Let me know when you think there is a legislature anywhere that is going to create laws that increase taxes when some economist says to.
Indeed. This is the question I address in terms of Minsky’s financial instability hypothesis. If “the authorities” move against inflation, speculative and Ponzi financed ventures are vulnerable.
Sammy, just a short note: $12-15/hr is nothing. What we need is $20/hr jobs — and since 40% of the workforce is currently making $15/hr or less that means making the jobs we already have pay more than they pay today …
… can anyone imagine the gov creating 60 million or so $20/hr jobs!
Micro: if McDonald’s can pay $15/hr, then, Target/Walgreen’s can pay $20/hr and (blessedly efficient — on close look the other day even the urinals only use 1/8th of a gallon per flush) Walmart can pay $25/hr — with 33%, 10-15% and 7% labor costs respectively.
Macro: bottom 40% take about 10% of overall income share today. Mid 59% take 67.5% and top 1% take 22.5% (round figures). Confiscatory tax top 1% for at least 10% of overall income — to give tax relief enough tax relief to the mid 59% — who can use that to higher consumer prices to the bottom 40%. Just to make the point that in broad terms at least the money is basically there somewhere.
Jack, I contend that American born workers are very reluctant to take jobs paying substantially less than $20/hr — fits Chicago ghettos and hillbilly elegy land. I gave up sponging free rent in my mother’s spacious apartment (back now :-]), free utilities, free internet and (then) free use of my brother’s Lincoln Town Car — to live in a dilapidated residence hotel in
San Francisco where the electricity in you room went off four or five times a day (somebody overloaded circuit) and the elevator went out once a week — but I was making $20/hr in the taxicab (with better to come as I got better shifts). I’d figure out the rest later.
When I left in 2004 San Francisco had 1000 cabs, now 2000 plus Uber. Another paying job bites the dust.
Opps almost forgot: blue Congress can mandate union cert elections at every private workplace; one, three or five year cycles, local plurality rules. No way Repubs can beat that.
Alas, Dems seem determined to try to win by being for nothing — only against Repubs. Down the drain again.
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Got to go read Stephanie Kelton’s long article now. Snatches of it seemed to suggest Bernie not too deep on more than more of what Dems do already (Chasing Hill more or less same thing). Washpost story says he’s finally realizing it’s more about unions raising wages than worrying about unemployment numbers — at least (that’s something).
https://www.washingtonpost.com/news/wonk/wp/2018/05/09/bernie-sanders-has-a-new-plan-to-raise-wages-save-the-unions/?utm_term=.63a979938719
This class war.
Have a nice day Susan Sarandon.
“We have entered frantic season at the Supreme Court. All the major cases argued this term and not yet decided are going to come in one big rush over the next few weeks as the Nine Wise Souls get their business done in a hurry before going off to Six Flags Over Perpetuties, or wherever it is that Supreme Court justices go for hot summer fun.
The first of these opinions was handed down on Monday and, if any innocent souls still were wondering why the Republicans hijacked a Supreme Court nomination away from the previous administration, they can wonder no longer. The Republicans—and, especially, the donor class that insulates the Republicans from the electoral consequences of their political malpractice—saw that maneuver pay off handsomely.
This is a massive win for employers and an equally massive loss for workers.
The decision came in a case titled Epic Systems v. Lewis, which was actually three cases folded into one for the purposes of deciding a single issue—whether or not a company can include in an employment contract a clause that, in the case of disputes between employees and management, not only forces the employees into individual arbitration, but also forces the employees to waive any right to resolve those disputes in court.
This is a massive win for employers and an equally massive loss for workers. The decision essentially bans class-action lawsuits on behalf of employees. The 5-4 decision was read by Justice Neil Gorsuch, the beneficiary of that Republican power play, and a judge whose attitude toward the rights of organized labor—and, indeed, any individual working man—resides somewhere between those of Henry Frick and Caligula. This, you may recalls, is the fella who once issued a dissent supporting a company’s right to fire a truck driver who abandoned his rig to avoid freezing to death. This is a cold and unempathetic man.”
https://www.esquire.com/news-politics/politics/a20791962/supreme-court-workers-rights-decision/
[Now that I’ve read Zach Carter’s long article]
I would like to explain to conservatives who think tax cuts enable “job creators” that you can’t just plant new jobs in an economy like planting seeds on a farm. In an economy (that is mostly operating at normal capacity) as in a living body, most all the capital processes are working already.
Now I have to apply the same logic to liberals who think they can just drop new jobs like new seeds all over a farm. Kevin Drum spells it out in comprehensive numbers.
https://www.motherjones.com/kevin-drum/2018/04/need-a-job-just-call-bernie/
Let’s do a little back-of-the-envelope arithmetic here. There are about 113 million full-time wage earners in America right now and roughly a quarter of them make less than $15 per hour. Add in health care benefits and you’re up to a third of the labor force making less than they would under Bernie’s plan. That’s about 37 million people. Now toss in some part-time workers and some self-employed workers and we’re up to something on the order of 50 million.
Well worth reading the entire analysis.
E. Michael: Greece didn’t have its own currency. Where else can the Chinese put their money (all of it)?
In light of the current administration’s and supreme court’s record of holding down the economic fortunes of most people, what do you suggest we do if not voting in some government that will provide jobs? Revolution? Sit down and shut up?
JD,
The Chinese, and everyone else, can put their money wherever they want to. I am far from being a deficit hawk, but this MMT dream is beyond scary to me. There is a limit, and thinking there would be no response by the rest of the world to it is incorrect.
Oh, and I am not saying I am against this kind of stimulus at all. I just don’t want it paid for by printing dollars regardless how many dollars it takes.
So you want to finance it through taxing the affluent? That’s apparently where Bernie parts company with Kelton. Somehow wealth has to be redistributed. We are in an analogous position to the banana republics that need to give the peasants some land but instead hold them off with the military. Our peasants are better off than theirs but the contrast is so severe that the situation cannot hold. Then too we have people living hand to mouth; lots of them in a land of plenty.
The other question though is to what extent redistribution will enrich the entire system through increased demand. Maybe no-one knows the answer to that. Clearly, with the great depression, government employment via war time contracts and military spending seems to have gotten us out of it. Of course there was no automation then.
JackD,
Absolutely we have to increase taxes on the rich. The ACA is funded in large part exactly that way. Personally, I am a huge fan of a financial transaction tax, amounts of which are based upon how long the asset is held.
At the same time, I have no problem with government stimulus programs being financed with debt. I just think these MMT people take it like a million steps too far. I got the printing press thing. I just refuse to think that the US status in the world is permanent, and that nothing could ever possibly affect its ability to borrow ad infinitum.
“was”
JackD,
read how turn US into Germany overnight
Why Not Hold Union Representation Elections on a Regular Schedule?
Andrew Strom — November 1st, 2017
https://onlabor.org/why-not-hold-union-representation-elections-on-a-regular-schedule/
automatic reversal of Trump voter voting too — actually give them their power back — for real