On the diagnosis at least this seems to be the case. Listen to Reich in his 2013 Aftershock.
"The Great Recession accelerated the structural change in the economy that begun in the late 1970s. More companies have found means of cutting their payrolls for good, discovering ways to use software, robots, and technologies to substitute for employees. Both container ships and the Internet have lowered the costs of outsourcing work to Asia and Latin America. Consequently, large numbers of Americans will not be rehired unless they are willing to settle for lower wages and fewer benefits. The official unemployment numbers hide the extent to which Americans will not be rehired unless they are willing to settle for lower wages and fewer benefits. The official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, more and more people have accepted lower pay and benefits as a condition for keeping them.
"Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far less than the old(In January 2010, Ford announced that it add twelve hundred jobs at its Chicago assembly plant but didn't trumpet the fact that the new workers will be paid half of what current workers were paid when they begun). Or they become consultants or temporary workers whose pay is unsteady and benefits nonexistent. But if the trend continues, more people will be working for the pay they consider inadequate, and inequality will have widened."
https://read.amazon.com/?asin=B003F3PKUE
This has been Morgan's point as well-that many Americans-I wonder if it might be most?-can no longer support themselves on wages alone and this is the case for a wage subsidy. Sumner has bought into this idea now as well.
" "The title of this post was left in a recent comment by Morgan Warstler. What he means is that NGDPLT takes nominal spending off the table, all that’s left is for the government to try to influence the split between P and Y. And that means demand policies don’t work, all fiscal policy must be supply-side, aimed at more growth and hence less inflation."
"If conservatives understood this then market monetarism would go from being a fringe movement eyed suspiciously by those on the right, to a position where we’d be headline speakers at CPAC. While we’re at it, Morgan’s wage subsidy scheme makes the minimum wage and welfare obsolete."
http://diaryofarepublicanhater.blogspot.com/2014/03/sumner-morgan-warstler-and-patrick.html
So conservatives like Morgan and Sumner understand the problems of this labor market as well. In a way Morgan's implicity assumption is radical-standard economics can't really believe that in the long term at least labor can be displaced by technology, however, this is what he-and Reich, Stiglitz, and many others, liberals as well as shrewd conservatives now believe.
"Saxie, You are close, so here's last point. TODAY IS NOT YESTERDAY. What used to happen, cannot happen again. This is what Summers and DeKrugman and Secular Stagnation are stumbling around, describing. This is WHY so may are screaming about Guaranteed Income."
"This is Tyler Cowen noting that there are MORE Zero Marginal Product workers every year. It's because we have a digital global economy. We only need 57 employees to build WhatsApp.So now you have ALL the pieces, you have no excuses."
"You know today is not yesterday, so what used to be - is no longer going to be. You can imagine having 50%+ of our population in the future not being able to earn their own way. So now we can say IF Saxie accepts these two ideas might be true, THEN the WAY to provide social commitment is to FORGET ABOUT LIVING WAGE / MINIMUM WAGE."
"The Great Recession accelerated the structural change in the economy that begun in the late 1970s. More companies have found means of cutting their payrolls for good, discovering ways to use software, robots, and technologies to substitute for employees. Both container ships and the Internet have lowered the costs of outsourcing work to Asia and Latin America. Consequently, large numbers of Americans will not be rehired unless they are willing to settle for lower wages and fewer benefits. The official unemployment numbers hide the extent to which Americans will not be rehired unless they are willing to settle for lower wages and fewer benefits. The official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, more and more people have accepted lower pay and benefits as a condition for keeping them.
"Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far less than the old(In January 2010, Ford announced that it add twelve hundred jobs at its Chicago assembly plant but didn't trumpet the fact that the new workers will be paid half of what current workers were paid when they begun). Or they become consultants or temporary workers whose pay is unsteady and benefits nonexistent. But if the trend continues, more people will be working for the pay they consider inadequate, and inequality will have widened."
https://read.amazon.com/?asin=B003F3PKUE
This has been Morgan's point as well-that many Americans-I wonder if it might be most?-can no longer support themselves on wages alone and this is the case for a wage subsidy. Sumner has bought into this idea now as well.
" "The title of this post was left in a recent comment by Morgan Warstler. What he means is that NGDPLT takes nominal spending off the table, all that’s left is for the government to try to influence the split between P and Y. And that means demand policies don’t work, all fiscal policy must be supply-side, aimed at more growth and hence less inflation."
"If conservatives understood this then market monetarism would go from being a fringe movement eyed suspiciously by those on the right, to a position where we’d be headline speakers at CPAC. While we’re at it, Morgan’s wage subsidy scheme makes the minimum wage and welfare obsolete."
http://diaryofarepublicanhater.blogspot.com/2014/03/sumner-morgan-warstler-and-patrick.html
So conservatives like Morgan and Sumner understand the problems of this labor market as well. In a way Morgan's implicity assumption is radical-standard economics can't really believe that in the long term at least labor can be displaced by technology, however, this is what he-and Reich, Stiglitz, and many others, liberals as well as shrewd conservatives now believe.
"Saxie, You are close, so here's last point. TODAY IS NOT YESTERDAY. What used to happen, cannot happen again. This is what Summers and DeKrugman and Secular Stagnation are stumbling around, describing. This is WHY so may are screaming about Guaranteed Income."
"This is Tyler Cowen noting that there are MORE Zero Marginal Product workers every year. It's because we have a digital global economy. We only need 57 employees to build WhatsApp.So now you have ALL the pieces, you have no excuses."
"You know today is not yesterday, so what used to be - is no longer going to be. You can imagine having 50%+ of our population in the future not being able to earn their own way. So now we can say IF Saxie accepts these two ideas might be true, THEN the WAY to provide social commitment is to FORGET ABOUT LIVING WAGE / MINIMUM WAGE."
http://diaryofarepublicanhater.blogspot.com/2014/03/ok-i-think-i-get-morgan-warstler-on.html
The real difference is what you believe the causes and solution is. Liberals like Reich argue the kind of cheap wage market we have now is not inevitable it's thanks to things like weakening labor unions, the Fed's inflation policy starting with Volcker, and cutting the MW-in real terms. Basically if there had been no Reagn Revolution we wouldn't have this problem is what liberals believe. Still, at least the real problem seems to be gaining understanding.
I mean I'm not poor anymore but I just got lucky in a way-my wages aren't actually enough for me to live on-at least not yet though they're improving. I just got some money the old fashioned way-I inherited it. This hardly means I can stop working. $500,000 grand can go fast if there isn't much coming in.
Morgan Warstler basically believes that wealthy people are superior people who produce everything, and the not-wealthy are worthless parasites. He believes in the garbage cod-economics theory that everyone is paid their "marginal product", so he contemptuously dismisses the unemployed as being "zero marginal product". He might as well add the word "scum" to the end of that, as that's what he actually believes. So his 'plan' is to turn all these scummy inferior "zero worth" people into household servants for the petit-bourgeoisie. Warstler is clearly some sort of Randian-inspired nutcase who had something very wrong happen to him when he a child, permanently warping his attitude towards other people.
ReplyDeleteI think Morgan sees himself as a hyper-realist. But I'm not sure: he does like to focus on the "hegemony" which he defines (I think!) as the upper 1/3 minus the top 1%: so I guess that's the 68 to 99% ers I guess: part of the 99% for, but the top tier of it.
DeleteI've seen enough comments from him to know what sort of a character he is. He thinks poor people are scum and that the rich produce everything. He's your classic Ayn Randian sociopathic personality.
DeleteAnon, that's simply junk. You wildly misinterpret my intentions. You also wildly misinterpret the kind of people I like in this world.
ReplyDeleteFirst and foremost, it is AMAZING that America has 1/3 of it's population view themselves as owners. It is our greatest triumph.
America is engaged in a three way battle:
A Power: top 1/3 - they have most wealth and half of the votes. (Republicans)
B Power: .1% - they have money (not as much as A) and no votes. (Oligarchs)
C Power: Bottom 2/3 - no money, half the votes. (Democrats)
Now, 100 out of 100 game theorists know that if you are the C Player, what is your optimal strategy round by round?
You consistently keep A vs B fighting with each other. RIght? Right. You side with one, you side with the other. You set up battles between them. You can never be completely loyal or you get SCREWED.
Now let's say you are frustrated by my ranking and you want the Dem base the bottom 2/3 to be the B power.
The C power are the .1% and what would they do? Keep A and B fighting. So if you think the oligarchs are C and votes are more important than money, than you'd have to admit the C power does great job at it.
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But MONEY > VOTES. And we don't just have to grudgingly admit it, we can see a kind of proof in how the wealth has shifter over past 30 years.
My contention is that the bottom 2/3, the C power, have NEVER CREATED A BATTLE BETWEEN THE OLIGARCHS AND THE REPUBLICANS.
And it is super easy to do... just offer a tax policy that lowers taxes on SMB owners (the GOP base) and raises it on .1%.
It's not complicated, in one round of game play, the Dems just sit out the round, make no effort to grab money (but they don't lose any either), and offer to side with A Power, while they gut the oligarchs.
NEVER HAPPENS.
So imagine what happens to a C power if in every battle they team up with B and try to take on A. C loses it's shirt and B takes their winnings. The A power stands pat, neither losing or gaining.
ReplyDeleteAnd that's exactly what happened in past 30 years - the bottom 2/3 got poorer, the oligarchs got richer, and the A Power held on to their share of wealth.
But, but political reality!!! You assert that it is Repub vs. Dems and the oligarchs give money to both.
That is the lie. If the oligarchs whip out their checkbooks and side completely with Dems, the A Power, the GOP they just create their own new Fox Network etc.
Listen, the reason I call the top 1/3 the hegemony is because they run America, they have 300M guns, they pay all the taxes, they own ALL the houses, they run all the churches, they run the PTAs, they are basically the the A and B students in every middle America high school class. They are 100M strong, they all get up every day and work, they are the ones who get married, stay married, raise the A and B kids.
And I'm not being a hyper-realist, I'm just looking around and using my eyes.
Here's the question: the if the left is so pissed off with the .1% - why on god's green earth, would they not every once and a while side with top 100M doers and follow them into battle to NUKE the oligarchs?!?!
Frankly, I think it is that within the top half of D party (the middle 1/3) - that all generally rely on government, that they are willing to sell out the bottom 1/3 folks.
It's like cutting them checks is fine, but having the bottom 1/3 compete with the folks in the middle 1/3, will reduce the wages of middle 1/3.
it won't.
to be sure, we are going to have far fewer public employees but thats just because of technology.
But instead we ought to look at the bottom 1/3 and say, "let's create a kinda of college level or junior varsity level free market, a kiddie pool for hustlers."
Let's give everyone in the pool enough to live on, but let's admit these folks need training wheels, let's make it super easy to make and take job offers week to week, let's give them tools to find things they LIKE to do other will pay for, let's make it tax free for buyers and sellers, and let's not get to hung up on rules.
The thing is, ultimately the "household servants for the petit-bourgeoisie," never happens. I can't happen.
Not unless being a household servant is something people REALLY want to do OR because they want to max out their income.
Under GI/CYB: for $280 you can be a blogger or painter for $400 you can work just 16 hours a week picking up dog shit. Now that's not a great job to some, but to somebody it is a $25 a hour dream job.
Yes the top 1/3 will be able to pay $10 to get their yard cleaned up twice a month, but that's not Victorian England either.