by the Sandwichman
Brad DeLong wrote: "The question of should Americans be working less, and why aren't we working less already, is an important one. It has nothing to do with whether the Obama stimulus is doomed to fail:"
I disagree. Harvey's argument is not that there is a technical imposibility to a stimulus that worked (the Treasury view) but that there are political obstacles to implementing a stimulus that is large enough and appropriately targeted. My claim is that one of the political obstacles to the appropriate targeting of a stimulus is the systematic exclusion of one of the three "ingredients of a cure" prescribed by Keynes.
Keynes was very explicit. He viewed investment as first aid. He viewed work time reduction as the ultimate solution. But political Keynesianism over the past 60 years has applied first aid over and over again and has systematically excluded Keynes's ultimate solution. Now if Brad thinks Keynes was wrong, that's another matter. Show why. But you can't just assert that it has "nothing to do with whether the Obama stimulus is doomed to fail". In medicine, you don't keep applying first aid over and over and never address the fundamental problem. Is it not the same in economics?
4 comments:
Leaving aside the current stimulus for now (though you ask a valid question), do you think there are systemic or regulatory rigidities which make it hard for people to voluntarily reduce their working time in agreement with their employers, outside of a recessionary environment?
One could argue that, assuming the 1930s Depression had successfully been fixed by, say, 1960, the private sector has had plenty of time to freely renegotiate its hourly working week in the meantime - if that is the preference people have.
Indeed, it is possible that the average worker has done exactly that - there is certainly more part-time work around than in the past. I don't know whether the average hourly week for full-time workers has reduced in length over the same period, but I wouldn't be surprised.
Can't speak for every one, but in the grocery industry enforced part time is part of a divide and conquer strategy against labor whereby only those with seniority are scheduled for 40 hours. Management, of course, claims they can't find people willing to work full time. That is f.u.d. The pressure to cut labor comes primarily from management attempting to improve the gross profit.
What is most telling is the income figures recently which show a leveling of hourly wages since the seventies. Had hourly wages kept pace with productivity the minimum wage today would be $19.00. Current contracts give Retail clerks a "good, middle class" wage of $18.05.
So the productivity gains have accrued neither to wages, nor hours of work desired.
--ml
The problem is that, by the standards of the establishment economists Obama listens to, a "successful" stimulus is one that will create sufficient demand to get America's overbuilt industry back to running at full capacity.
And since it has never been able to run at full capacity without 1) massive consumer debt and planned obsolescence, 2) forcible opening of foreign markets, 3) destroying competing plant and equipment with strategic bombing, or 4) all of the above, that would be a very bad thing.
The portion of our current productive capacity that amounts to a Rube Goldberg machine producing shit for the landfill (with a brief detour through people's houses for two years or so), and the portion of "jobs" that amount to running in a hamster wheel, NEEDS to be destroyed.
Leigh,
Stay tuned. Or search the archives. I regularly discuss the systematic rigidities. I'll be posting my submission to the White House Task Force on Working Families that catalogs a variety of those rigidities.
The hours of full-time work have not declined in decades. The only driving down the average hours (with the exception of recessions) is the increased labor force participation of women.
Martin and Kevin,
Yes and yes.
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