Tag Archives: Employer of Last Resort

The Emancipation of the Unemployed

By Dan Kervick

An important anniversary is approaching.  On January 1, 1863, Abraham Lincoln signed and issued the Emancipation Proclamation.  The proclamation that sounded the final end of the depraved institution of American slavery was presented to the nation and the world as an emergency war act, a “fit and necessary” measure for suppressing an armed rebellion against the authority and government of the United States.  The language of the Emancipation Proclamation is restrained by the customary legalisms of government writ; and yet, vibrating through and beyond the tight cords of executive propriety, the drama and permanence of Lincoln’s statement sound clearly, along with the solemn national commitment to sustain the liberation of the newly freed men and women by force of arms:

And by virtue of the power, and for the purpose aforesaid, I do order and declare that all persons held as slaves within said designated States, and parts of States, are, and henceforward shall be free; and that the Executive government of the United States, including the military and naval authorities thereof, will recognize and maintain the freedom of said persons.

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Thomas Palley Conflates the Conservative Party in the UK with UMKC

By William K. Black

Thomas Palley argues that the UK Conservative Party’s plan to abuse the unemployed “confirms” the accuracy of his opposition to MMT theorists’ employer of last resort/job guarantee (ELR/JG) proposals.  His logical chain is as follows.

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The Astonishing Case of the Impenetrable Zero Bound

By Dan Kervick

In a small, peaceful town there once lived three people: Abbie, Baker and Carlie.

Abbie was a very wealthy aristocrat, and also a philanthropist.  Her fortune and position in the town were the fruit of the hard work of her ancestors, but her life was dedicated now only to managing that fortune.  She lived to make the common people of the town happy, especially Carlie, who was her personal favorite.

Baker was much more selfish, and looked out for his own interests.  He wasn’t terrible and mean, just obstinately self-interested.  It seems he was born that way; it was in his DNA.

Abbie frequently lent money to Baker, and Baker frequently lent money to Carlie.  But in accordance with the ancient and venerable laws of the town, enacted to maintain a decorous distance between the aristocrats and common people, Abbie was forbidden from loaning money directly to Carlie.  Nevertheless, Abbie was usually able to help out Carlie indirectly when necessary.  She found that when she lent money to Baker, Baker was sometimes more willing than before to lend money to Carlie.  And if Abbie loaned the money to Baker at lower rates of interest than previously, Baker would usually reduce the rate of interest he charged Carlie in turn.

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MMP Blog #47: The JG / ELR and Real World Experience

By L. Randall Wray

There have been many job creation programs implemented around the world, some of which were narrowly targeted while others were broad-based. The American New Deal included several moderately inclusive programs such as the Civilian Conservation Corp and the Works Progress Administration. Sweden developed broad based employment programs that virtually guaranteed access to jobs.

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MMP Blog #46: The Job Guarantee – Program Manageability

By L. Randall Wray

As mentioned earlier, critics have argued that the program could become so large that it would be unmanageable. The central government would have difficulty keeping track of all the program participants, ensuring that they are kept busy working on useful projects. Worse, corruption could become a problem, with project managers embezzling funds. We will briefly look at some methods that can be used to enhance manageability.

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MMP Blog #44: The Job Guarantee and Macro Stability

By L. Randall Wray

The JG posts here at MMP have generated a huge number of comments. I have focused my responses at the comments more-or-less directly directed to the actual posted blogs. I can understand the impatience: many questions have not been answered. However many of these questions and comments concerned upcoming topics.

Let us move on to macro stability issues. I have given JG talks all over the world and the two main objections raised always refer to inflationary impacts and exchange rate impacts. It seems to me that those who respond with these fears have not paid attention to the set-up of the program and to the MMT arguments.

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Responses to Blog #42: Intro to the Job Guarantee

By L. Randall Wray

Thanks for all the comments and the interesting discussions. Sorry this will be late as I’m in Brazil at a couple of conferences. A number of the comments were on topics we will discuss later—especially Vincenzo’s design of his own preferred JG. I am purposely keeping it general in the beginning, and gradually we will introduce the specifics. But note that the discussion made it fairly clear that no “one size fits all” will work everywhere. The real world program will need to be carefully designed to fit “conditions on the ground” (as our Pentagon warriors love to phrase it). We need to look at the general, universal program first so I will stick to that. Later I will argue that in some circumstances it might not be practical (due to political, institutional, sovereignty, managerial capability, or productive capacity constraints) to implement the universal program from the get-go.

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The Job Guarantee is Not Workfare

By Pavlina R. Tcherneva

For a couple of years Ralph Musgrave has been arguing that the Job Guarantee provides jobs that are essentially the same as those in the private sector with the same kinds of inflationary effects. For this reason, he has been treating the JG a simple job subsidy with a training component, similar to various active labor market policies (ALMP) around the world.

Bill Gross advocates for a Job Guarantee Program

Bill Gross, co-founder of Pacific Investment Management, recently advocated for an employer of last
resort program:

In the end, I hearken back to revered economist Hyman Minsky – a modern-day economic godfather who predicted the subprime crisis. “Big Government,” he wrote, should become the “employer of last resort” in a crisis, offering a job to anyone who wants one – for health care, street cleaning, or slum renovation. FDR had a program for it – the CCC, Civilian Conservation Corps, and Barack Obama can do the same. Economist David Rosenberg of Gluskin Sheff sums up my feelings rather well. “I’d have a shovel in the hands of the long-term unemployed from 8am to noon, and from 1pm to 5pm I’d have them studying algebra, physics, and geometry.” Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem.

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