Job Gty Issues: The Empire Strikes Back!

The policy with the potential to solve a large percentage of our social economic issues has been steadily gaining momentum nationwide.  But the Empire is not going to give up its privileged position easily.  A recent article in the Wall Street Journal deserves refudiation (see Sarah Palin):  https://www.wsj.com/articles/the-dangerous-fantasy-of-a-jobs-guarantee-1542239737

Job Gty Critique WSJ 2018-11.jpg

RE: “… The sky-high costs … Defense is the only discretionary federal expense comparable …world’s largest employer…”
• So? The authors’ concerns about the “cost” of the program are totally misplaced as broken down by a gentleman and a scholar here: https://fflorescpa.wordpress.com/2018/07/28/financing-economic-solutions-to-unemployment-and-accompanying-social-problems/

RE: “… assume virtually no one currently employed would leave their job… 41 million workers earn less than the program’s minimum wage …”
• But this assumes that private sector wouldn’t react by raising wages on the bottom say quarter of the workforce. A very bad and misleading assumption.  The notion that private sector would just shut down and let 41 million workers walk away is preposterous.  A one-time upward adjustment in the bottom quarter of the wage scale can be expected.  (This is not inflation.)

RE: “… Finding work for 10 million people would be a herculean task. … how or even if the work could be assigned …”
• Not really. A large-scale ramp-up of public sector spending would be a simultaneous effort, alongside but not part of the Job Gty program. Public sector puts together a to-do list and starts executing on it.
• Really? We are getting all hung up on how the work would be assigned? There’s a lot of academic work already done on this.  Please do your homework. But as a start, may I suggest an Excel spreadsheet. And work can be funneled through local governments and not-for-profits.
• Governments would put together a To-Do list and start executing on it. Some jobs would require skills and not fall under the JG program. Others would. Politicians would run on how aligned their To-Do lists are with the desires of the voters. Not that hard Max!

RE: “… Monitoring such a colossal program would be difficult and expensive. … …”
• Every grant would be accompanied by an auditor with strict rules and policies and the flexibility to publicize and prosecute abuses. (We can rename the policy the CPA Full Employment Act).

RE: “… a big box retail chain would want a community to prioritize a vacant lot next to one of its stores. … …”
• Rules would be in place on whose property would be cleaned up. If its city property, then it would be a worthwhile project. These decisions are done daily today. The author needs to get out more.

RE: “… temporarily unemployed workers would be diverted….no mechanism or incentive to put their workers skills….weaken the productivity of the economy … …”
• They would be diverted to productive jobs paying them a wage when the worker wants/needs a paycheck. What’s the problem with this?
• Really? Having unemployed folk working instead of sitting on the couch would weaken the productivity of the economy?
• Why do you assume no effort to align skills/desires with available work wouldn’t be included in the program. Sounds like a strawman argument.

RE: “… for a fraction of a job guarantee cost … develop new skills …”
•  Aaahhh. Here is the crux of the matter.  Many conservatives need to look down their noses at the less fortunate.  They fundamentally believe that all unemployment is a consequence of the unemployed skill, attitude, and behavioral shortcomings. The truth is, the poor and unemployed are always with us because of the shortcomings of their betters — highly educated, highly coiffed conservative economists and government policy makers living in nice homes, driving late model luxury cars, working in high government/think tank/academic positions — espousing economic policies which include large numbers of unemployed as a constant and a feature, not a bug in the economy.

Traditional conservative/monetarist/austrian economists espouse policies which feature a buffer stock of unemployed folk which expands and contracts with vagaries of the business cycle.  The Job Gty envisions the same buffer stock, but instead of having folks unemployed living in misery, they are productively employed in the Job Gty program, which expands in recessions and shrinks to perhaps nothing during the booms.

Easy Peasy!

 

3 thoughts on “Job Gty Issues: The Empire Strikes Back!

  1. Max Gulker (@maxgAIER)

    Hi Francisco, I appreciate your willingness to engage on the points I make in my op-ed. You mischaracterize my statement about the 41 million, but most of your other points reflect honest disagreement in the way the world works.

    I think one place where you and I differ dramatically is that, in my view, you neglect the role of complexity in our economy, particularly when administering a program of this size. This is a huge topic that can get quite esoteric, I’ll just say for now that my views are influenced by Hayek’s “The Use of Knowledge in Society” and the complexity economics work being done at the Santa Fe Institute. I actually think your “easy peasy” catchphrase is indicative of a fundamental misunderstanding in the way that large groups of people interact.

    You cannot reduce the question of assigning work to over 10 million people to an excel spreadsheet. What you can do is take me up on my offer in my larger report to produce a proof of concept for a single locality. If I haven’t done my homework and have missed something like this, I’m very interesting in seeing it.

    Finally, you appear to ascribe motives to me that are either conspiratorial (“empire”) or morally deficient (looking down one’s nose at poor people). I speak only for myself, but you could not be more wrong.

    Email or message me if you’d like to exchange ideas further.

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    1. fflorescpa Post author

      Thank you for the response Max. It’s entirely possible you’re catching some blowback prompted by other critics of the Job Gty published in other publications. Having said that, your article was in the Wall Street Journal. And that makes you, by definition —> a Stormtrooper for the Empire.

      Also, frankly the criticisms of the Job Gty seem to me to be fairly tepid, and that’s the frustrating part. The JG has the likely outcome of solving most of our economic and social problems. It would quite simply be a different and better world – not so much because the private sector would be turned on its head (it won’t), but because it would remove the spectre of unemployment and poverty from the nightmares of a large percentage of the population. That is a HUGE improvement in society (much like the improvement of indoor plumbing and internal combustion engine). With such a great upside potential to see especially so-called liberal commentators take ill-thought-out, ignorant pot-shots at the program was a bit disheartening.

      Your critiques fall into these categories. The notion that such a transformational program shouldn’t be implemented because of the complexities of implementation seems unrealistic. The implementation moreover is a decentralized affair. Funds would be directed by politicians looking to look good in their project choices and administrating skills.

      Proof of concept is difficult since the Job Gty can only be implemented by a sovereign, due to the costs involved. But in terms of administering large numbers of people, the Federal govt would be a good start. In terms of detailed plans, the Levy Economics Center, which you’re familiar with, would be a good place to start.

      In terms of motives, I certainly don’t know what’s in your head or your heart. But when economists push job/skills training as a solution to unemployment when all that does is push currently employed folk out of a job now being offered to a newly trained candidate, well it’s either bad motive or incompetence – or just not taking unemployment seriously. Blaming the victims.

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  2. Max Gulker (@maxgAIER)

    Your arguments about cost rest on a heterodox macroeconomic theory not accepted by the vast majority of the profession. I hope the braintrust behind MMT and the JG has a better plan to build consensus than sending a list of one hundred or so papers and saying “do your homework.” This is not the way to have a serious academic or policy debate (which would entail things like specific citations).

    Regarding program size, you know I wasn’t suggesting all 41 million people would lose their private sector jobs. A mere fraction, however, would add millions to the JG rolls which the Levy and CBPP authors almost entirely ignore.

    Regarding complexity, you reduce to single sentences what in actuality would be thousands of pages of legislation, tens of thousands of administrative employees, tens of millions of skills assessments, millions of evaluations of proposed projects, and the constant growing and shrinking of this “buffer stock.” This problem of allocating millions of peoples’ labor and capital resources to even somewhat productive use is the primary factor that brought down most communist/socialist regimes in the 20th century. The JG isn’t big enough to do that, but it’s big enough to cause enormous problems.

    Francisco, we will not solve our problem with chronic unemployment and poverty, and the underlying inequality of opportunity from which these problems spring, with a super-clever plan devised by super-smart people. We can and will do so by treating those struggling as respected individuals, worthy of mentorship, education, and connection to the economy at large that many lack through no fault of their own. This does not assume that the chronically unemployed are deficient, Francisco. I would argue that deciding they don’t stand a chance in our economy and having them clear vacant lots is condescending. I have been involved in a program where I get to know people from all walks of life, as human beings rather than one of millions to be assigned a task, and while the benefits are often hard to quantify, they are immense (for everyone involved).

    If you “do your homework” and look at the articles I’ve written for AIER, you’ll see I’ve spent a great deal of time educating folks on the libertarian end of the spectrum about the power of truly decentralized, local institutions. I plan to spend much more time trying to engage the left with these ideas too.

    I believe you have a deep desire to help people, Francisco, but you’ve bought into a fatally flawed plan that rests on a rickety-at-best intellectual edifice. And I will use a widely-read media outlet to make it known just how bad an idea I think this is. May we both approach our future endeavors with open hearts and minds.

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