One specious analogy you hear a lot lately is to argue that Obama's recovery has been much weaker than the recession of the first few years under Reagan. Superficially this seems analogous as unemployment did briefly hit 11.3% which is even higher than the 10.1% unemployment topped out in 2009.
However, as Krugman points out this is not an apples to apples comparison as this has been a very different type of recession than 1979-82:
"more than four years ago I predicted a very slow recovery. Why? Because recessions like those of 1990-91, 2001, and 2007-2009 have very different origins from recessions like 1974-75 or the double-dip recession of 1979-82. The old recessions were more or less deliberately created by the Fed via tight money to control inflation, which meant that you had a V-shaped recovery once the Fed decided that we had suffered enough and loosened the reins. The new recessions all reflected private-sector overreach, which is much harder to make up for."
http://krugman.blogs.nytimes.com/2012/06/11/reagan-obama-recovery/
"Note that while I predicted a slow recovery way back when, it has been even slower than I expected. But that’s no mystery; at that point neither I nor anyone else knew just how far the private sector had overreached, plus I didn’t expect the unprecedented fiscal austerity that has been such a drag on recovery given the fact that we’re in a liquidity trap."
Back in 2008 those now attacking Obama for saying the private sector job growth is "fine" were claiming there was no recession at all, that it was a "mental recession."
"people like Hubbard and Gramm were denying that there was any recession at all. In fact, as late as July 2008 Gramm declared that all we had was a “mental recession”, and that America had become a “nation of whiners."
For the record private sector job growth under Obama has been there the trouble is all the government sector job cuts especially at the state and local level.
Govt. jobs are not real jobs, they depend on the taxes paid by the private sector.
ReplyDeleteTechnically govt. jobs do not pay taxes. It is just an imaginary $ amount that public employs pretend to pay.
This is basic economics Mike.
We have a free market system that pays taxes for a few public service things.
We want to get more government for less money.
Walmart and Amazon deliver on this promise. Skype delivers on this promise. Everyone delivers on this promise EXCEPT the public sector.
GET OVER IT SAX.
When the public sector delivers 3-5% YOY productivity gains, YOUR SIDE will actually be much stronger, not weaker like you imagine.
But YOUR SIDE is gong to lose public employee pensions and union dues.
What I keep suggesting is that even you you are NOT ABLE to understand how the progressive left can achieve its ends in a future that end public employee unions and see Citizens stand the test of time.
It is 100% POSSIBLE for progressives to do just fine.
But you will need to learn to see the world in a brand new way.
Don't bank your political beliefs on Public Employee Unions, Sax, they will be gone - and you don't want your policies and plans to depend on something that wont be around anymore.
I linked it just for your benefit Morgan. But you're missing the point as well. Even if ai bought that government jobs are not real jobs the fact is that the job growth under Obama has been solely in the private sector-there have been cut backs in state and local governments.
ReplyDeleteNot that I buy your premise that only private sector jobs are real jobs. But if are economy's used to go through much tamer and recessions before Reagan and Volcker that says little for your narrative.
Having high umemployment and weak recoverites hardly makes your case for slashing government.
Sax,
ReplyDeleteKeynes himself says you are DEAD WRONG and you are losing because you don't follow his lesson.
Keynes says during high growth periods you DO NOT increase public employee pay past inflation and population.
He says you don't do it PRECISELY so that during recessions, the cost of running the govt. doesn't balloon.
Look, dude, once your side takes productivity gains off the table, it becomes impossible, to really give any public employees quantitative real pay raises.
Meaning, it is well known in the private sector that there are 10x employees - real workhorses who far outperform everyone else and get paid accordingly.
What is really happening there Sax, is that those out-performers, are making other guys redundant - so they ZMP guys get axed.
ADD to that that government tends to reward based on Seniority...
And you've got a system that literally drives the real heavy lifters OUT of the public sector.
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Sax, a deeply flawed public sector IS NOT in the interests of the progressives.
You have to look at the train coming down the track man!
This Internet thingy is real. Paper pushers and buildings are waste of money. The US postal service is a waste of money. Hell, war is a waste of money.
But getting mentally to that honest truth means that MANY current public employees are going to have to go out and enter the private market and fend for themselves like everyone else does.
Sax, it is going to happen. It is happening.
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The GOP line is that if we are going to have more police - then police are going to have 401ks and retire when everyone else does.
Teachers - there will be less teachers - and far better outcomes.
But this doesn't mean that the poor can't have a better shot at moving up the ladder.
And if you get stuck making bad arguments to try and save the public employees you wont be thinking correctly about how to make sure the new Internet Govt. model actually improves peoples lives.
Keynes said you are wrong, Sax.
Listen to him.
Where did Keynes say I was wrong? Is this where?
ReplyDelete"Keynes says during high growth periods you DO NOT increase public employee pay past inflation and population."
Does this look like a period of high growth?
Mike,
ReplyDeleteMay I suggest you don't feed the concern troll? He's peeing on your leg, and it's not raining.
Nanute this is not just any concern troll but the one and only Morgan Warstler-from Money Illusion. You know Mr. Guaranteed Income (GI) from private auctions while ending the minimum wage and unemployment benefits?
ReplyDeleteIf you go to Money Ilusion he's a very regular commentator. Morgan and I often go around about it, he's never short on advice for how to successuflly fight the progressive Democrat cause, he's very helpful that way.
I can hardly chase away a paying commentator! LOL
Not until my very post gets me 50 comments.
He does pee on your leg when its not raining true-but that's why I like him more than most Right wingers who try to lie and not admit this is what they really are tyring to do.
ReplyDeleteHe gets points for honesty if nothing else and actually a lot of the MMTers have been rather taken by his GI-after all it's not so unlike their JG anyway.
Sax,
ReplyDeleteI posted for you the INCREASE in Public Employee Compensation with no corresponding productivity gains since 1980.
(and you did read the paper correct?)
http://www.bls.gov/mfp/mprff97.pdf
If Keynes saw Table 1, he'd say:
'Well we certainly can't follow my policies! Look what these idiots did!
They deserve to be gutted like fish!"
Dude, 50% of Keynes is DO NOT GROW THE PUBLIC SECTOR during boom times. During booms you are supposed to pay down debt, NOT increase spending, and certainly not just pay more money just because.
Pay increases happen because of productivity gains. Baumol is a fraud.
Look, dude, its the same way with Fisher and with Sumner and with Economists in general:
The BIG print giveth, and the small print TAKETH away. You gotta eat the WHOLE THING or their plan doesn't work.
Scott's plan excites liberals only so much as they get money printing NOW, but almost immediately, the LT is reached, and now forever more the the govt. is rewarded for BECOMING PRODUCTIVE.