Unemployment will almost certainly (be) in double-digits next year — and may remain there for some time. And for every person who shows up as unemployed in the Bureau of Labor Statistics’ household survey, you can bet there’s another either too discouraged to look for work or working part time who’d rather have a full-time job or else taking home less pay than before (I’m in the last category, now that the University of California has instituted pay cuts). And there’s yet another person who’s more fearful that he or she will be next to lose a job.
Reich goes on to point out the basics of underemployment and the accompanying lack of consumer spending, and lays out in plain English the case for greater stimulative spending. While the debt is worrying, Reich argues that now is no time to worry about the debt and uses the example of Depression-era spending under FDR followed by post-war growth to argue that spending is the correct course to take.
Reich is also pointing out that in bad economic times, we tend to get ugly politics, which is an understatement. If you agree with his points, our country is essentially risking a long period of internal strife because of the overly simplistic views about government spending and debt that dominate our broken discourse.
Even Uncle Alan admitted that the “entire intellectual edifice” that underpinned neo-liberalism was a disaster. One can’t help but conclude that a lot of the recent insanity in politics results from the collapse of an economic belief system that was dominant in the empire for decades, and has yet to be fully discredited in the society at large. (Can you say “Russia?”)
So obviously Reich is arguing for a Keynesian approach.
One of the most entertaining quips by John Maynard Keynes is this bit from The General Theory of Employment, Interest and Money.
If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.
To put this in regional terms, we should start building and repairing things like bridges, transit and schools, although I have to admit there would be a certain satisfaction obtained by burying money in crazy places. We could then sit back to watch as the GOP-multi-level marketing machine goes to work. In a short time there would be an entirely new class of bidness guys and gals selling various plans designed to profit from digging for the loot, and many of them would need new cars and furniture.
All of this is to say that I don’t understand why Reich isn’t in the government again. With continued woes in the housing sector, ordinary consumers being hammered by usurious banks and a bleak employment outlook, it’s baffling that the Obama administration hasn’t put Reich into a key post.
I guess it’s because Obama is from Chicago?
Reich is nothing but a Party Hack. You can’t spend your way out of debt and into prosperity. Obama is nothing more than another puppet for the masters who are creating wars and the financial collapse. They do this as to create debt which they control. Look how Obama is not only embracing the Bush Doctrine but expanding it. The only way for us to break the cycle is to throw those in power out and to tear down the American Aristocracy that we have allowed them to create.
hey reject the herd:
how do you think we got out of the great derpession? do you think we got out of it by:
shrinking government
lowering taxes
reducing regulation
avoiding debt
in fact you well know that ww2 was the biggest stimulus program ever, we undertook massive debt, and in the end, we ended up with decades of prosperity showing that
if you want a large thriving private sector
invest in a large thriving public sector.
if you disagree, please tell us how in fact we got out of the great depression.
we did get out of it right?
If you want to know why Reich isnt currently in government, read his book about his four years as Labor Sec. The guy wasnt so happy.
So happy the republicans and the corporatists thought it was such a swell idea to ship the US manufacturing base to Asia.
Brilliant.
Isn’t patriotism protecting American jobs and standard of living; ergo, way of life?
What the Fuck?
@4..dumbjax – and you think the democrats also dont think its such a swell idea?
Keep drinking the kool-aid dipshit – neither party gives a flying fuck about the average joe.
fucking lemmings…
It’s really simple. Change the rules of the economy so it’s cheaper for companies to employ Americans than ship the jobs somewhere else.
America won’t be successful if we don’t make things again, and maintain a thriving middle class.
I’d like the conservatives here to argue that point. How do they justify gutting the middle class to save 10 cents an item for Walmart?
It seems the best ’employment’ available in America right now is a gig as a contestant on ‘Survivor.’
@2 “you well know”
I don’t think it’s a good idea to make assumptions about what he knows. It doesn’t appear he knows anything on any subject whatsoever.
@5 “neither party gives a flying fuck about the average joe”
True, and I used to think they were equally bad, but the preceding 8 years proved one is clearly worse than the other.
Government and economists define “recession” in terms of whether the economy is growing or contracting, not whether employment is. Or society defines wealth in terms of assets and net worth, not whether people are working. Policies are geared toward generating profits, not putting people to work. It’s always about wealth and capital, not working for a living!
As I’ve been saying all along American culture pays lip services to a fictional ‘work ethic’ but in fact doesn’t reward work, disrespects workers, and discriminates against working by imposing the heaviest taxation rates against earned income. Anyone who tries to get money by working for it is a sap, a fool, a sucker!
No one should work! I don’t work, and you shouldn’t work, either! There’s no money being made by working. Wages used to be 60% of GDP but now are barely over 40%. America’s priorities have shifted from earning to owning. You get money by owning stuff and flipping assets, not by producing anything. So why work?
The stock market is tanking again, creating opportunities to flip shares. The idea is to buy them cheap, sell them after they go up, then wait for the market to crash again and buy them back when they’re cheap again, then resell them again after the market takes another upward bounce, and so on, forever.
Or, better yet, become a stockbroker and take a skim off the top every time one of your clients buys or sells a stock. That’s like being a Las Vegas casino — the house always wins, as long as people play!
Sure beats working and getting the shit taxed out of your wages.
Well I wonder what Robert Reich will say now that Chicago AIN’T GONNA GET THE OLYMPICS!
Commenter,
Depression? Jobs creation? WWII expansion? Hmmm… only thing you missed was the facts.
We destroyed Germany and Japan’s ability to manufacture anything after WWII. Germany destroyed the ability of the rest of Europe to manufacture anything after WWII, so we manufactured everything for the world. Then Dr W. Edwards Deming came along.
You know Dr Deming of quality control. Puddy knew him. Puddy took his classes with others. Puddy respected him. He lived to be 93. Well he peddled his goods to US companies. They said are you nuts we make it fall apart so consumers come back to buy again. So Dr Deming went off to Japan. The Japanese said OHIOGAZIMUS! They took his thoughts to heart and guess what commenter…? He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage. Amazing eh?
From WikiPedia for a simple example…
Butt there’s more. This will be tough for rujax, correctnotright and ylb arschloch to digest because they are the daily HA morons. Dr Deming’s influence was seen by consumers. That’s why foreign goods were and still are preferred by Boeing IAM Union workers. Watch the number of foreign cars zoom into their parking lots. That’s why US consumers bought Asian TVs. The US TV manufacturing market disappeared. Did you know at one time over 90 companies made TV sets in the US? How many are there now commenter? Did you read this from Industry Week last year? No? Living on those kook-aid biased sites? Oh yeah of course you’ll hear the screams of the usual gaggle of HA leftist pinhead morons claiming it was Bush’s fault when they companies left long before Bush came into office. Maybe NAFTA had something to play in their decision? Butt to be honest commenter, something rarely seen in a HA Libtardo…, Puddy wasn’t aware of US TV manufacturing even though it was a foreign company doing it. So I was kinda shocked when I read that.
That’s why many clothing manufacturers went overseas. Better quality and lower manufacturing costs. Oh wait for it… Bush caused them to run…
So when you throw things around be sure you have you facts in order.
@12 So who was responsible for the decision of U.S. manufacturers to peddle high-priced junk to consumers? Management, or workers?
Gee, thanks Puddy. Deming argued that the problems came from the management…..not the workers and not the unions.
I agree. Republicans of course blame the unions.
They also forget about the competitive disadvantage of paying for health care (we have the most expensive health care in the world (close to double the nearest country) and rank 37th in health).
So poor management and lack of health care are the major problems with our current businesses.
And we fix that by paying executives 20X more than anywhere else? or by caving in to the lobbying by the health insurance industry and not cutting costs?
Thanks for not making any sense Puddy.
blew john asks
That ship sailed long ago dude. See my Dr Deming comments above. People gravitate to quality in manufacturing. Why not ask Boeing IAM why they choose to drive foreign cars over the ones made by their UAW buddies? Looks like one union screwing the other someplace where Gman likes to get it!
Does Goldy drive foreign? We know that answer… How about Jon? Carl? Will? Lee? Darryl? Puddy drives a US MANUFACTURED GAS Guzzler!
Oh, and by the way Puddy…I dare you to find a single economist who says that Deming alone got us out of the depression…..what a silly argument.
commenter, of course, was right about how the US got out of the dperession…..that ended in 1940…way before Deming went to Japan.
What the heck are you talking about, anyway? You go so far off topic you forget the point you are trying to make. Which is?
Didn’t Puddy tell you correctnotright would miss the point?
EPIC FAIL fool! We continue to laugh at you!!!!
Now look at this whopper from correctnotright
We continue to laugh at you!!!!! Puddy already stated Dr Deming was rejected.
You are a laugh a minute!
Roger Rabbit gets into the act
Here dumb feral bunny. Remember the Popular Mechanics mag from June 1972? Who made the cars in the Vegas plant? Management or union?
Nuff SAID Sucka…
@15 “Will?”
Will drives Big American Iron. I know what he’s got because he bought it from me. And if you think Roger Rabbit would ever own a Banzai Box, then you know nothing about Japan’s murder of whales and dolphins.
@15 “Will?”
Will drives Big American Iron. The V-8, Holly 4-barrel, fast-accelerating ass-hauling thumpa thumpa thumpa kind. I know what he’s got because he bought it from me. And if you think Roger Rabbit would ever be caught dead behind the wheel of a Banzai Box, then you know nothing about Japan’s murder of whales and dolphins.
I reposted #20 because Goldy’s edit function isn’t working today. In fact, it isn’t even there. Typical made-in-India crap.
Anyone who reads Paul Krugman’s The Return of Depression Economics will instantly recognize that President Obama made all the right moves and saved the world from a replay of the 1930s. If McCain and Wingnut Wack-O-Nomics had won, the world would be collapsing around our ears.
So your arguments are price and quality for why jobs are going overseas?
I agree that Americans do not want to work for 3rd world wages, 3rd world health standards, 3rd world work safety.
But Americans cannot compete in quality?
1) It’s genetic? Are you saying that there is something genetically wrong with America that workers cannot match the quality of work done in Viet Nam or Mexico or China? That their workers simply are better innate abilities then our workers, and we physically and mentally are not up to learning the skills to do the tasks?
2) It’s cultural? There is something wrong with American culture that we simply cannot do the tasks, with the same tools as a worker in Mexico, and do it as well, because we are cultured to be sloppy and lazy? There are no pockets of America from Maine, to California, to Kansas to Texas to Florida, with a work ethic and craft left? No a single one? Not some conservative enclave creating great workers somewhere?
So you are flat out wrong. It’s just because corporations can get dirt cheep labor, unless you want to argue that Americans are unable and unfit to do the work.
Why isn’t Reich in some high position in the Obama administration? Well, to start with, because Tim Geithner is.
For an administration that Puddy and the other fools accuse of being “ultra liberal”, the Obama team so far has dealt with economic issues pretty much like their predecessors did. So far, it’s proving that a rising tide lifts all yachts.
I personally wish I could dismiss Reich’s prediction (because if true it means we’re in for a world of shit), but as it turns out his batting average on such things is pretty damned good. It also reflects the lesson which we’ve been trying oh, so hard to forget from the aftermath of 1929–it took several years after the financial institutions barfed all over themselves for everything else to really fall apart.
Over the long run, consumption cannot rise faster than real income.
Thanks to 30+ years of anti-union work, usurious credit, and “free trade” (read: outsourced jobs), real incomes are in decline for most Americans, so household consumption is also in decline.
This recession won’t end until that changes.
blew john gassed
Really? How come you had nothing to say about the Shaw Group and their “practices” in the 2005-2005 Katrina cleanup? Puddy posted who they were, who they sent their political cash to and who they hired for the clean up. Check with the HA arschloch, ylb, and he can refresh your mind with all the URLs Puddy placed here many times. His tctmgr should be able to | grep Shaw Group really easy. You know Cheap Labor Progressive Supporters since Proud Leftist dislikes me using Cheap Labor Progressive Jockstraps.
Oh and look at all studies put forth on why businesses hire illegals. Sure, the feral dumb bunny and others will scream about low wages, etc. because that’s their favorite chant. But Puddy brought up “ethnic advocacy” issue long time ago on HA. Ethnic advocacy means buying favor… Turning a blind eye for political support… and political votes… and political control… within the illegal alien community. Puddy gave you comments from Nancy Pelosi many times on immigration and why she turns her back on it. Puddy gave you the comments of Harry Reid… Puddy recently gave you the health care comments of Luis Gutierrez. All of them are Democratics. Ask the arschloch for that too. Votes blew john. Votes!
Xad is old enough to remember “planned obsolescence” in the major auto manufacturers.
Note to Puddy: Why didn’t Dr Deming win the hearts and minds of the Republican administrations during his campaigns?
Oh, sorry for asking, of course…..
I would like to insert a note to liberals reminding them that there are people in SE Asia (yes, the Philippines) that need a lot more than just philosophical arguments in their lives right now:
and:
Philippine Red Cross
RP Red Cross Here
(Via an RP Blog)
seems pointless to ask charity from conservatives, especially for those “brown People”.
Well, with maybe ONE exception. You know who you are.
WOW, you really DO attract some knowitalls here, don’t you?
Simply put, (as my underdeveloped brain sees it) under Reich’s stewardship we had prosperity, under Timmy’s we get to give all our money to the bankers.
Don’t get me wrong: The Clinton crew is no friend to me, much less Reich, I am just sayin…
#27.
You now rant that employing illegal aliens is the problem but that doesn’t explain why companies are sending American jobs overseas.
You don’t stay on topic and explain your point that American workers are unfit to do quality work.
Do you really thing that Americans cannot do the work, and the Red Chinese can?
Puddy, I don’t really understand what point you are trying to make. Quality and excellence are something where company management has to buy in completely and make it part of the company culture before you will be terribly successful at it.
Poor management is why the US auto manufacturers were whittled down to the “big 3” and why two of them nearly went out of business recently.
Poor management, including an unwillingness to develop and invest in the retooling necessary to build solid state sets is why US consumer electronics manufacturers went out of business.
The problems at Boeing are entirely management based. If they had kept on the same path they were on when the 777 launched they would still be a world beater. Unfortunately the same wrecking crew and broken corporate culture that drove McDonnell-Douglas under has been trying to do the same to Boeing, hence the bonehead decisions and quality problems on the 787 program. Hopefully the current management gets a clue and takes Boeing back where it needs to be, but I’m not holding my breath. The good news for Boeing is Airbus has its own share of fail, China and Japan are a ways away from building globally competitive large transport aircraft, and so far Embraer and Bombardier are so far only going after the smallest capacity end of the 737 market. If Boeing manages to pull off the 787 it might regain a dominant position if it can leverage that experience into an all-composite 737 replacement.
heh… Stupes comes peddling his bullshit again.. gets slapped down…
a few months later on the flimsiest of pretexts he’ll recycle his old “i said it. the “moonbats said i was crazy.. puddy was right.” rinse, repeat…
We’ve seen it so many times.
Sorry Stupes, you were full of shit then, you’re full of shit now – you’re full of shit ALWAYS.
Such a miserable tool..
“Puddy, I don’t really understand what point you are trying to make.”
Don’t worry about it. Neither does he.
As to where American industry went wrong (and Boeing at present is a prime example), it was when corporate executives flipped through the chapter introductions of Tom Peters’ books and redefined “excellence” as follows:
(1.) Define “customers” as simply a transport mechanism to deliver money into your hands.
(2.) Define “employees” as “unacceptable overhead”.
(3.) Extract the maximum profit in the shortest possible time, and if something prevents you from doing so:
(4.) Steal everything in sight and get the hell out of Dodge.