Krugman makes a great point here about this overused shibboleth, structural reform. It can mean many things but usually it just means cutting the safety net and making the job market harder for workers.
"I promised in an earlier post to say something about why these days I tend to get annoyed when I hear the phrase “structural reform”, especially in Europe."
"Part of the reason is that the phrase sounds good, but could mean lots of things. In many cases “structural reform” is code for eliminating worker protections and/or sharply cutting social benefits. Sometimes this may be necessary — let’s face it, France has made it much too attractive to retire at 55 — but such things should be called by their proper names, not wrapped in vague language that conceals the nature of the pain."
"That brings me to a second problem: whenever some catchphrase becomes part of what Very Serious People say because it sounds Serious, it’s time to stop using the phrase, to force the VSPs to talk about what they really mean. In the US context, “entitlement reform” is VSP boilerplate — I mean, who can be against reform? But there’s a world of difference between trying to move away from fee for service medicine — a reform I support — and, say, raising the Medicare age, which would be a terrible policy. These things should not be lumped together."
"But the main thing about “structural reform” in Europe is the role it plays in discussion of macroeconomic policies. Instead of reflecting on the fact that Europe is sinking deeper into depression five years into the slump, and clearly needs less austerity and more aggressive monetary expansion, the usual suspects start talking about the need for structural reform. And my sense is that this talk of reform has, in practice, become less a real demand for specific actions than an excuse for not facing up to the reality of macroeconomic disaster, and a way to avoid discussing the responsibility of Germany and the ECB, in particular, to help end this disaster."
http://krugman.blogs.nytimes.com/2013/06/18/structural-excuses/
There's a few issues here. On the one hand is 'structural probelms' lets us ignore the real macro problems as Krugman says, it's just away of not facing the real-demand side-problems.
On the other hand there are perhaps real structural problems in the economy that the VSP who tsk tsk don't have in mind: like the argument that Krugman, Jared Berstein Joseph Stiglitz and others have made that the recent technology revolution-the Internet, the digital revolution, etc.-have actually left many workers worse off for a long time-there are far fewer good, white collar jobs since 2000.
This is something that is worth discussing-it's ignored by most mainstream economists who still remember the recession of 2001 as 'short and shallow.' No it wasn't. It actually permanently depressed the job market in ways that we haven't come back from yet.
http://diaryofarepublicanhater.blogspot.com/2013/06/luddites-or-digital-optimists.html
To have a conversation about this, though we must reclaim the word and fight its misuse.
P.S. Will you look at that-I got 4 posts out in an hour and a half. Reason to be optimsitic.
For background to what I'm talking about see here.
http://diaryofarepublicanhater.blogspot.com/2013/06/alan-west-cliff-from-cheers-and-moment.html
"I promised in an earlier post to say something about why these days I tend to get annoyed when I hear the phrase “structural reform”, especially in Europe."
"Part of the reason is that the phrase sounds good, but could mean lots of things. In many cases “structural reform” is code for eliminating worker protections and/or sharply cutting social benefits. Sometimes this may be necessary — let’s face it, France has made it much too attractive to retire at 55 — but such things should be called by their proper names, not wrapped in vague language that conceals the nature of the pain."
"That brings me to a second problem: whenever some catchphrase becomes part of what Very Serious People say because it sounds Serious, it’s time to stop using the phrase, to force the VSPs to talk about what they really mean. In the US context, “entitlement reform” is VSP boilerplate — I mean, who can be against reform? But there’s a world of difference between trying to move away from fee for service medicine — a reform I support — and, say, raising the Medicare age, which would be a terrible policy. These things should not be lumped together."
"But the main thing about “structural reform” in Europe is the role it plays in discussion of macroeconomic policies. Instead of reflecting on the fact that Europe is sinking deeper into depression five years into the slump, and clearly needs less austerity and more aggressive monetary expansion, the usual suspects start talking about the need for structural reform. And my sense is that this talk of reform has, in practice, become less a real demand for specific actions than an excuse for not facing up to the reality of macroeconomic disaster, and a way to avoid discussing the responsibility of Germany and the ECB, in particular, to help end this disaster."
http://krugman.blogs.nytimes.com/2013/06/18/structural-excuses/
There's a few issues here. On the one hand is 'structural probelms' lets us ignore the real macro problems as Krugman says, it's just away of not facing the real-demand side-problems.
On the other hand there are perhaps real structural problems in the economy that the VSP who tsk tsk don't have in mind: like the argument that Krugman, Jared Berstein Joseph Stiglitz and others have made that the recent technology revolution-the Internet, the digital revolution, etc.-have actually left many workers worse off for a long time-there are far fewer good, white collar jobs since 2000.
This is something that is worth discussing-it's ignored by most mainstream economists who still remember the recession of 2001 as 'short and shallow.' No it wasn't. It actually permanently depressed the job market in ways that we haven't come back from yet.
http://diaryofarepublicanhater.blogspot.com/2013/06/luddites-or-digital-optimists.html
To have a conversation about this, though we must reclaim the word and fight its misuse.
P.S. Will you look at that-I got 4 posts out in an hour and a half. Reason to be optimsitic.
For background to what I'm talking about see here.
http://diaryofarepublicanhater.blogspot.com/2013/06/alan-west-cliff-from-cheers-and-moment.html
Really glad you've found an additional income earning opportunity Mike. I know youve been trying a while. You as much as anyone knows the BS about structural unemployment/reforms
ReplyDeleteThe whole idea is based on the notion that there are these companies, with these ideas or these technologies, that not enough people know how to use. For this to be true on any sort of large scale there would have to be some companies with them who are just kicking everyone elses ass in whatever field this technology exists..... where are they? We would be hearing about this and their stocks would be through the roof. Now of course they might not be public but if they were large enough and doing something soooo different and better Forbes, CNBC, FBC would be all over them.
Yes some companies like Google and other tech companies are doing some different things but the current generation of college students has bazillions of kids who are tech savvy enough to fill their needs.
This whole notion that we have so many jobs waiting to be filled but our workforce hasnt been trained to do the job is pure crap. We'd be hearing from the customers that they have all these orders for whatever that just cant get filled at any price.
I listened to my across the street neighbor who has a landscape business complain that he cant find enough guys(US citizens) who want to do his work. Again on a macro level, are there lines of people out there with landscaping jobs to be done who cant find someone to do them? I think not. Maybe this one guy cant get the guys to do the work he'd like to do but the work is getting done by someone. Too often we listen to these micro stories and wrongly scale up to a macro story.
Yeah thanks Greg. I always find it ironic to hear there are all these people who 'choose' not to work. I find that even in every day life people who don't have problems find it impossible to imagine if you do it's anything other than you're fault. There's this chikc at work-she' s nice generally but she's always asking me 'do you think you'll ever want a car again'-as if this was a choice! LOL. Yeah I chose for the bank to repo cause I had no money
ReplyDeleteI do think it's possible that there are new kinds of manufacturing jobs that young people aren't applying for because they aren't aware of them-after all why would any smart kid with a future want to work in a factory-this hasn't seemed like langible work for those who want a future since the early 80s.
To get these jobs-as I understand it-what young kids need is some trade school training. These are very well paying jobs-partly because of 'reshoring' partly because though he gets no credit, Obama's stimulus did a lot to lay a foundation for a 'green economy.'
Don't get me wrong by no means am I claiming this has anything to do with our immediate macro problems which I agree are wholly demand side.
I do think there's truth in what Krugman and company are talking about-the new technology of the data revolution have decimated what we used to think of as the white collar sector.
Does this qualify as a 'structural' issue? That's been what I've been thinking.
ReplyDeleteagain, on the issue of techology displacement these guys are excellent http://raceagainstthemachine.com/excerpt/