By Pavlina Tcherneva
(Crossposted from INet)
Global unemployment is expected to surpass 200 million people for the first time on record by the end of 2017, according a recent ILO study, and limitations of official statistics suggest that the problem is much larger . As conventional measures increasingly fail to produce tight labor markets and jobless recoveries become the norm, economists grapple with this new reality by calling it secular stagnation and by adjusting upwards the rates of unemployment deemed ‘natural’ — but the human, social and economic costs of this growing problem are rarely considered in economic modeling.
By L. Randall Wray
Here’s a nice piece:
The Workers’ Think Tank: With an eye on the United States and Greece, scholars at the Levy Economics Institute are developing plans to ensure full employment, by Sasha Abramsky, February 2, 2015, The Nation.
As Sasha notes, the Levy Institute has a novel approach to fighting unemployment: JOBS! Hardly anyone ever thinks about that–that the cause of unemployment is lack of jobs.
For some reason, virtually all policy-makers and economists (including progressives) think that jobs will magically appear. True, some suggest that US unemployment is created because China (et.al.) “steals” jobs that are rightfully due to America. Hence, the solution is to steal them back.
By William K. Black
Bloomington, MN: January 11, 2015
Sometimes it is the little things than make everything clear. The WSJ gem I ran across explains so much about what is wrong about economists and the Wall Street Journal. The headline of the January 9, 2015 article foreshadows the strong chance that the reader is about to be transported into a strange dimension: “Weak Industrial Data Suggest Eurozone Economy May Be Faltering.” I don’t know how to break this to Murdoch’s minions, but the word “may” is hilarious and “faltering” is a euphemism. Here’s the money quote.
By L. Randall Wray
Dean Baker, everyone’s favorite progressive economist (mine, too), has an interesting take on our unemployment problem.
Give more paid vacations.
The idea is that if all the employed work less, employers will need to hire the unemployed to produce what the already employed won’t be producing while sunning themselves on Florida’s beaches.
Look, I’m all for shorter work weeks. It is ridiculous that labor’s push somehow got stuck a century ago at the 40 hour work week in the USA. Employed Americans work more hours per year than just about any other workforce on the planet.
NEP’s Pavlina Tcherneva appears on The Real News on October 5, 2014. The topic of discussion is the slow recovery and why monetary policy that is directed at finance and not job creation has this effect.
By William K. Black
Regular readers understand the three dynamics that drive economists crazy about the New York Times’ coverage of the troika’s infliction of austerity on the Eurozone. The troika consists of the European Central Bank (ECB), the International Monetary Fund (IMF), and the European Commission (EC).
- NYT reporters treat austerity as a response to the eurozone’s Great Recession as obviously the only possible response – they rarely discuss alternative policies or views
- The NYT refuses to inform its readers that economists overwhelmingly consider this malpractice and that it has caused catastrophic and gratuitous harm
- All of this is particularly bizarre given the NYT’s economist, the Nobel Laureate Paul Krugman, who writes regularly in the paper to explain why austerity is a disastrous response to the Great Recession. The NYT eurozone writers routinely ignore Krugman (and anyone else who makes the same point).
The massive, wholly avoidable harm caused by “bleeding the patient” to make him well (austerity in response to a recession) for the people of the eurozone is stark, but typically minimized or wholly ignored by the NYT reporters. Roughly one-third of the population of the eurozone lives in nations with Great Depression levels of unemployment.
By L. Randall Wray
Memo to Obama: Don’t tie progressive spending policy to progressive tax policy. Each can stand on its own.
Reported today in the Washington Post:
Obama proposes $600 billion in new spending to boost economy
President Obama on Tuesday unveiled an ambitious budget that promised more than $600 billion in fresh spending to boost economic growth over the next decade while also pledging to solve the nation’s borrowing problem by raising taxes on the wealthy, passing an overhaul of immigration laws and cutting health costs without compromising the quality of care. Obama seeks to raise more than $1 trillion – largely by limiting tax breaks that benefit the wealthy — to spend on building roads and bridges, early childhood education and tax credits for the poor.
Here’s the conceit: Uncle Sam is broke. He’s got a borrowing problem. He’s gone hat-in-hand to those who’s got, trying to borrow a few dimes off them. But they are ready to foreclose on his Whitehouse.
By Robert E. Prasch
We all know that predictions in economics can be fraught. This is for a variety of reasons, with the absence of controlled experiments high on the list. However, over the years we have learned a few things through the observation of regularities and by deducing from the things about which we are reasonably certain to formulate conjectures about things of which we are less certain.
With this in mind, let us consider the December jobs report. By all accounts, it was a “disappointing” result with only 74,000 jobs created. The “headline” rate of unemployment did fall appreciably, but that was solely and completely due to an increase in the number of people who have entirely given up looking for paid work. While we can all agree that the result is disappointing, I would like to take issue with the almost ubiquitous report that it was “surprising.”
By Frederic S. Lee
Whether it be inflexible prices, wage rates that are too high and sticky, or interest rates that cannot become negative, they all have the common property of disrupting the smooth workings of the price mechanism, thereby causing recessions, preventing economic recovery, and creating unemployment. But what if there is no price mechanism that allocated scarce resources among competing ends? Then the ‘price problem’ would disappear and the causes of recessions and persistent unemployment would be quite different. Ignoring the issue whether scarce resources as defined in mainstream economics exist or not, I am going to interrogate the supposed existence of the price mechanism that lies at the theoretical core of all mainstream explanations of recessions and unemployment.