The truth is simple and contrary to these views. Business will not hire more workers until it has more sales. Consumers will not spend more until they’ve got more jobs. A private-sector recovery requires 300,000 new jobs every month. But the private sector doesn’t need 300,000 new workers per month to meet prospective sales.
The new jobs can only come from the federal government—the only economic entity that can afford to hire. Obama’s 1 million infrastructure jobs is a nice down payment, but it is only three month’s worth. New workers will create the sales that firms need to justify new hiring. Still, we must think bigger if we are to create 20 million jobs.
There is a way to do that: The government could serve as the “employer of last resort” under a job guarantee program modeled on the WPA (the Works Progress Administration, in existence from 1935 to 1943 after being renamed the Work Projects Administration in 1939) and the CCC (Civilian Conservation Corps, 1933-1942). The program would offer a job to any American who was ready and willing to work at the federal minimum wage, plus legislated benefits. No time limits. No means testing. No minimum education or skill requirements.
The program would operate like a buffer stock, absorbing and releasing workers during the economy’s natural boom-and-bust cycles. In a boom, employers would recruit workers out of the program; in a slump the safety net would allow those who had lost their jobs to continue to work to preserve good habits, making them easier to re-employ when activity picked up. The program would also take those whose education, training or job experience was initially inadequate to obtain work outside the program, enhancing their employability through on-the-job training. Work records would be maintained for all program participants and would be available for potential employers. Unemployment offices could be converted to employment offices, to match workers with jobs in the program, and to help private and public employers recruit workers.
Funding for the job guarantee program must come from the federal government—and the wage should be periodically adjusted to reflect changes in the cost of living and to allow workers to share in rising national productivity so that real living standards would rise—but the administration and operation of the program should be decentralized to the state and local level. Registered not-for-profit organizations could propose projects for approval by responsible offices designated within each of the states and U.S. territories as well as the District of Columbia. Then the proposals should be submitted to the federal office for final approval and funding. To ensure transparency and accountability, the Labor Department should maintain a website providing details on all projects submitted, all projects approved and all projects started.
“We have to make sure that the promises we make in Social Security, Medicare and Medicaid are promises we can keep, and there are various ways of doing that,” Mr. Romney said. “One is we can raise taxes on people.”
“Corporations!” the protesters shouted, suggesting that Mr. Romney, as president, should raise taxes on large businesses. “Corporations!”
“Corporations are people, my friend,” Mr. Romney responded, as the hecklers shouted back, “No they’re not!”
“Of course they are,” Mr. Romney said, chuckling slightly. “Everything corporations earn ultimately goes to people. Where do you think it goes?”
When someone in the front row angrily suggested that “it goes in their pockets,” Mr. Romney, becoming increasingly animated, asked: “Whose pockets? People’s pockets!”
So not only is this exchange awesome/horrifying in it’s own right, but that handsome man heckling Romney in the above video is my old friend Dan. We went to high school together, he took over the ACLU club after I graduated, and also ran a successful student council presidency campaign on the platform “MAKE SCHOOL LESS F****D UP.”
Go Dan! So happy you’re still fighting the good fight. I’m totally beaming right now & full of CHS pride. Looking forward to the revival of your student council platform on a national scale.
The full exchange:
The outcry in the face of such obvious truths is always that if they were implemented they would ruin the economy. The peculiarity of our condition would appear to be that the implementation of any truth would ruin the economy. If the Golden Rule were generally observed among us, the economy would not last a week. We have made our false economy a false god, and it has made blasphemy of the truth. So I have met the economy in the road, and am expected to yield it right of way. But I will not get over. My reason is that I am a man, and have better right to the ground than the economy. The economy is not god for me, for I have had to close a look at its wheels. I have seen it at work in the strip mines and coal camps of Kentucky, and I know that it has no moral limits. It has emptied the country of the independent and the proud, and has crowded the cities with the dependent and the abject. It has always sacrificed the small to the large, the personal to the impersonal, the good to the cheap. It has ridden to its questionable triumphs over the bodies of small farmers and tradesmen and craftsmen. I see it, still, driving my neighbors off their farms into the factories. I see it teaching my students to give themselves a price before they can give themselves a value. Its principle is to waste and destroy the living substance of the world and the birthright of posterity for a monetary profit that is the most flimsy and useless of human artifacts.
Though I can see no way to defend the economy, I recognize the need to be concerned by the suffering that would be produced by its failure. But I ask if it is necessary for it to fail in order to change; I am assuming that if it does not change it must sooner or later fail, and that a great deal that is more valuable will fail with it. As a deity the economy is a sort of egotistical French monarch, for it apparently can see no alternative to itself except chaos, and perhaps that is its chief weakness. For, of course, chaos is not the only alternative to it. A better alternative is a better economy. But we will not conceive the possibility of a better economy, and therefore will not begin to change, until we quit deifying the present one.
A better economy, to my way of thinking, would be one that would place its emphasis not upon the quantity of notions and luxuries but upon the the quality of necessities. Such an economy would, for example, produce an automobile that would last at least as long, and be at least as easy to maintain, as a horse. It would encourage workmanship to be as durable as its materials; thus a piece of furniture would have the durability not of glue but of wood. It would substitute for the pleasure of frivolity a pleasure in the high quality of essential work, in the use of good tools, in a healthful and productive countryside. It would encourage a migration from the cities back to the farms, to ensure a work force that would be sufficient not only to the production of the necessary quantities of food, but to the production of food of the best quality and to the maintenance of the land at the highest fertility — work that would require a great deal more personal attention and care and hand labor than the present technological agriculture that is focused so exclusively upon production. Such a change in the economy would not involve large-scale unemployment, but rather large-scale changes and shifts in employment.
“You are tilting at the windmills,” I will be told. “It is a hard world, hostile to the values that you stand for. You will never enlist enough people to bring about such a change.” People who talk that way are eager to despair, knowing how easy despair is. The change I am talking about appeals to me precisely because it need not wait upon “other people.” Anybody who wants to do so can begin it in himself and in his household as soon as he is ready– by becoming answerable to at least some of his own needs, by refusing the glamorous and the frivolous. When a person learns to act on his best hopes he enfranchises and validates them as no government or public policy ever will. And by his action the possibility that other people will do the same is made a likelihood.
From Discipline and Hope by Wendell Berry, from his book A Continuous Harmony (1972).
There is burgeoning school of economics called Modern Money Theory (MMT) that I really think warrants consideration. Not only is it theoretically quite intriguing, but if accurate, has tremendous political and social implications. One might even say that (perhaps in contrast to the Obama administration), it is actual cause for hope.
So I’d like to bring MMT to your attention. If you have already encountered, and dismissed, MMT, I’d like to encourage you to give it a second look. If you have already encountered, and dismissed, the entire field of Economics, I’d like to propose MMT as the exception to the rule.
This primer is meant to be accessible introduction to someone with no prior understanding of MMT or even Economics. Wray will be adding a chapter every Monday for the next year, and responding to comments every Wednesday. (And for those of you who can’t possibly wait a year, I highly recommend Wray’s textbook Understanding Modern Money)
Okay okay but what is MMT?
Well, Wray and his colleagues will do a much better job than I of explaining, but here’s the gist as I understand it:
- In a fiat economy, public debt = private wealth
- Taxes don’t fund government spending; taxes create demand for fiat currency so that people are willing to sell goods & services to the government in exchange for said currency
- Taxation is a sufficient (though not necessary) means to create demand for fiat currency (& thus prevent against undesirable levels of inflation)
- By serving as an “Employer of Last Resort”, essentially hiring anyone who is willing but unable to find work in the private sector and paying them a living wage, the government can ensure both full employment and price stability.
and finally, perhaps most radically:
If true, this is pretty huge. Calls for “austerity” and the need to “reduce the deficit” become specious; there is an economically-sound mechanism to employ everyone at a living wage; not to mention that the government can suddenly “afford” all kinds of neat social programs, like universal health care, daycare and public transportation.
Zimbabwe! Wiemar Germany!
Nothing you just said made any sense to me!
Rebecca, what the hell makes you, with your film degree, qualified to talk about economics?!
Yes, in many ways MMT runs completely counter to our conventional understanding of money. It sounds insane at first. But I think, if you give Wray a chance, you will see all the above points (except perhaps the last one) thoughtfully addressed.
And unlike most branches of economics, which could be accused of hiding behind intimidating jargon and complicated mathematical models rooted in mythology, the folks at New Economic Perspectives (the group of scholars behind the primer) are actively soliciting comments & critiques from their readers in an effort to make this primer as clear and thorough as possible. So I encourage you to check it out and ask questions and follow along over the next 50 weeks, if that’s your sort of thing.
PS. If you contacted me nearly a year ago about that economics discussion list I wanted to start, apologies for never actually getting around to making it. I’m gonna try and get that started up soon, for real. Perhaps we can work our way through the Modern Money Primer together. Everyone who requested an invite will get one. If you didn’t and want in, let me know!
Nathan Bootz, a school superintendent in Michigan, writes a public letter to his governor:
Dear Governor Snyder,
In these tough economic times, schools are hurting. And yes, everyone in Michigan is hurting right now financially, but why aren’t we protecting schools? Schools are the one place on Earth that people look to to “fix” what is wrong with society by educating our youth and preparing them to take on the issues that society has created.
One solution I believe we must do is take a look at our corrections system in Michigan. We rank nationally at the top in the number of people we incarcerate. We also spend the most money per prisoner annually than any other state in the union. Now, I like to be at the top of lists, but this is one ranking that I don’t believe Michigan wants to be on top of.
Consider the life of a Michigan prisoner. They get three square meals a day. Access to free health care. Internet. Cable television. Access to a library. A weight room. Computer lab. They can earn a degree. A roof over their heads. Clothing. Everything we just listed we DO NOT provide to our school children.
This is why I’m proposing to make my school a prison. The State of Michigan spends annually somewhere between $30,000 and $40,000 per prisoner, yet we are struggling to provide schools with $7,000 per student. I guess we need to treat our students like they are prisoners, with equal funding. Please give my students three meals a day. Please give my children access to free health care. Please provide my school district Internet access and computers. Please put books in my library. Please give my students a weight room so we can be big and strong. We provide all of these things to prisoners because they have constitutional rights. What about the rights of youth, our future?!
Please provide for my students in my school district the same way we provide for a prisoner. It’s the least we can do to prepare our students for the future…by giving our schools the resources necessary to keep our students OUT of prison.
Nathan Bootz, Superintendent, Ithaca Public Schools
“I was thinking maybe he has at least some progressive populist instincts that could become more manifest after the cautious policies of being a senator and working with [Sen. Joe] Lieberman as his mentor,” he says. “But it became very clear when I looked at the neoliberal economic team. The first announcement of Summers and Geithner I went ballistic. I said, ‘Oh, my God, I have really been misled at a very deep level.’ And the same is true for Dennis Ross and the other neo-imperial elites. I said, ‘I have been thoroughly misled, all this populist language is just a facade. I was under the impression that he might bring in the voices of brother Joseph Stiglitz and brother Paul Krugman. I figured, OK, given the structure of constraints of the capitalist democratic procedure that’s probably the best he could do. But at least he would have some voices concerned about working people, dealing with issues of jobs and downsizing and banks, some semblance of democratic accountability for Wall Street oligarchs and corporate plutocrats who are just running amuck. I was completely wrong.”
From an interview with Chris Hedges in Truthdig.
Towards the end, he calls for a third party, which I think is really the only sensible path at the moment. I’ve definitely been feeling this sentiment in the air lately, but West is the most prominent person I’ve heard yet to declare himself “not in” and does so quite eloquently of course:
“This was maybe America’s last chance to fight back against the greed of the Wall Street oligarchs and corporate plutocrats, to generate some serious discussion about public interest and common good that sustains any democratic experiment,” West laments. “We are squeezing out all of the democratic juices we have. The escalation of the class war against the poor and the working class is intense. More and more working people are beaten down. They are world-weary. They are into self-medication. They are turning on each other. They are scapegoating the most vulnerable rather than confronting the most powerful. It is a profoundly human response to panic and catastrophe. I thought Barack Obama could have provided some way out. But he lacks backbone.
“Can you imagine if Barack Obama had taken office and deliberately educated and taught the American people about the nature of the financial catastrophe and what greed was really taking place?” West asks. “If he had told us what kind of mechanisms of accountability needed to be in place, if he had focused on homeowners rather than investment banks for bailouts and engaged in massive job creation he could have nipped in the bud the right-wing populism of the tea party folk. The tea party folk are right when they say the government is corrupt. It is corrupt. Big business and banks have taken over government and corrupted it in deep ways.
“We have got to attempt to tell the truth, and that truth is painful,” he says. “It is a truth that is against the thick lies of the mainstream. In telling that truth we become so maladjusted to the prevailing injustice that the Democratic Party, more and more, is not just milquetoast and spineless, as it was before, but thoroughly complicitous with some of the worst things in the American empire. I don’t think in good conscience I could tell anybody to vote for Obama. If it turns out in the end that we have a crypto-fascist movement and the only thing standing between us and fascism is Barack Obama, then we have to put our foot on the brake. But we’ve got to think seriously of third-party candidates, third formations, third parties.
“Our last hope is to generate a democratic awakening among our fellow citizens. This means raising our voices, very loud and strong, bearing witness, individually and collectively. Tavis [Smiley] and I have talked about ways of civil disobedience, beginning with ways for both of us to get arrested, to galvanize attention to the plight of those in prisons, in the hoods, in poor white communities. We must never give up. We must never allow hope to be eliminated or suffocated.”
Related, another compelling argument for the need of a third-party(ies). I have no background info on the author, Smith Bowen, but these two essays (chapters of an unfinished book, I believe) are an enjoyable read:
You’ll have to be resolute, though, and vote for the Green anytime the Democrat isn’t up to snuff, even if the Republican is a wild-eyed berserker who wants to pave the world. It’ll take a few more losses like Gore’s in Florida in 2000 before the Democrats will get the message, if then — and you have to be willing to stay the course until they do get it. Just remember that the only difference between a pave-the-world Republican and an “environmentalist” Democrat is well, none, really; the Republican means what he says, but the Democrat means what the Republican says, too.
Anyone keeping track of potential third-party candidates? This list on wikipedia is a little slim. Green Party Watch has a more inspiring list. But we need this for congress as much if not more so than for president. In a dream world, who would you actually be proud and excited to vote for?
Dear Readers of My Blog (if any of you even exist, that is),
I’m looking for some company in reading some books about economics and participating in an email discussion about the current state of the global economy. I’ve been having lots of discussions about this topic lately, some wonderfully cathartic and educational, others horribly depressing, and more still immensely frustrating. The root of this frustration is more often a lack of shared vocabulary and historical understanding than it is a lack of shared values, though in few subjects are the two so dramatically intertwined as in economics. Suffice it to say, I’ve found the most
productive fruitful conversations to be those in which the participants have read at least some of the same books or articles, even if they vehemently disagree on what they mean.
In a somewhat blind-leading-the-blind experiment, I’ve compiled a list of ten books that might form an initial common ground. Recommendations for this list come from (hopefully less blind) friends, family members, professors, and the books themselves. It is not intended to be a comprehensive overview of a discipline or in any way definitive. I just tried to pick texts which seemed to be in dialogue with each other, and have something valuable to say. Some I’ve read cover to cover, others merely selections, and a couple I’m still waiting to stumble upon in a good used book store. They are listed in chronological order, but I do not propose we read them in that order, or that to join the list you must commit to reading all in their entirety. Instead, the only requirement is that you obtain a few and read them at your leisure. And the list itself? Questions, rants, relevant links, suggested readings, selected passages, apt quotations, critiques: really, whatever the participants desire.
- Adam Smith, The Wealth of Nations (1776)
- Karl Marx, Capital (1867)
- William Graham Sumner, What Social Classes Owe to Each Other (1883)
- Thorstein Veblen, The Theory of Business Enterprise (1904)
- Georg Friedrich Knapp, The State Theory of Money (1924)
- John Maynard Keynes, The General Theory of Employment, Interest and Money (1936)
- John Kenneth Galbraith, The New Industrial State (1967)
- L. Randall Wray, Understanding Modern Money: The Key to Full Employment and Price Stability (1999)
- John Perkins, Confessions of an Economic Hit Man (2004)
- Barry C. Lynn, Cornered: The New Monopoly Capitalism and the Economics of Destruction (2010)
Some ground rules: The list will be hosted either on rrrojer.net or some more convenient non-Google service. The archives will be private but as with all email, assume you are speaking in a public forum. I will take the role of benevolent dictator/curator when it comes to membership, at least for the time being. Wit and humility encouraged; good natured and pointed name calling acceptable; outright hostility and disrespect less so (think Taibi not Limbaugh). The list is meant to be mixed company, meaning people who have studied economics and people who have not (I certainly fall into the latter category), so minimal jargon please. Knowing my peers this will probably have a lefty bent, but free-market fundies most welcome, especially if you turn a good phrase, as well as the unaffiliated. Though many of us are funemployed and have lots of time on our hands, let’s aim for quality over quantity – count to ten before you send kinda deal – so that busy students and professionals are also welcome. I’m hoping for low-volume high-density, but if it becomes too high traffic for your tastes, you can always unsubscribe. I will ban those deemed abusive.
Interested? Send me an email at rebecca@(this site) with a little explanation of why you want in or what book I’ve most egregiously left off the list. If I get a reasonable quorum I’ll set up a list and send you an invite.
Yours in curiosity,
skip ahead to around 1:12 if you are impatient.
The only income left for most of those who create is earned through self-promotion, but as Lanier points out this turns culture into nothing but advertising. It fosters a social ethic in which the capacity for crowd manipulation is more highly valued than truth, beauty or thought.
While the severing of intellectual property rights from their creators, whether journalists, photographers or musicians, means that those who create lose the capacity to make a living from their work, aggregators such as Google make money by collecting and distributing this work to lure advertisers. Original work on the Internet, as Lanier points out, is “copied, mashed up, anonymized, analyzed, and turned into bricks in someone else’s fortress to support an advertising scheme.” Lanier warns that if this trend is not halted it will create a “formula that leaves no way for our nation to earn a living in the long term.”
“Funding a civilization through advertising is like trying to get nutrition by connecting a tube from one’s anus to one’s mouth,” Lanier says.
As a founding (now lapsed) member of Harvard Free Culture and a former employee of Creative Commons, these are some pretty hard truths, thoughts I’ve been harboring for over 3 years now but reluctant to state publicly. But perhaps as a result of working on my thesis film— by far my most substantial endeavor to date— combined with getting ready to graduate— meaning next year not only will I no longer have institutional/financial support for making art, but I will have to actually earn a living— that I feel like it’s time to come out about my growing ambivalence towards “free culture.”
When left, right, print, broadcast and mainstream media outlets agree, it has to be true, right? Well, not exactly. Here’s what an end-of-the-year update published in November 2009 by the US Bureau of Reclamation had to say about the drought: precipitation in 2009 was about 94 percent of average in Northern California, which is pretty much the only region that matters since it is where three-quarters of the state’s water comes from.
Ninety-four percent of average? That does not sound like severe drought conditions at all. But don’t tell that to California’s Department of Water Resources, which still has a huge DHS-style “Drought Condition Severe” orange alert plastered on its Web site.
The power of simple fact-checking aside, why would California officials exaggerate — if not outright lie — about the drought? Well, the issue here is less about the drought itself and more about what a drought — real or not — can help achieve. If there is one thing 2009 revealed about California’s “action hero” governor, it’s that he is eagerly willing to serve as the front man for the sleaziest, most crooked business cartel in the state: a de facto water oligarchy made up of billionaire corporate farmers who run vast stretches of the state like their own personal fiefdoms, exploiting migrant workers for slave labor and soaking the taxpayers for billions of dollars in subsidies every year. And like all good businessmen, they aren’t letting a good mini-crisis go to waste. Their objective is to whip up fears of a drought-related calamity to push through a “solution” they’ve been having wet dreams about for the past five decades: a multi-billion-dollar aqueduct the width of the Panama Canal that would give them near total control of more than half of California’s water supplies.