Monday, August 19, 2013

Public Policy Luddites Deserves A DUH! Award. Putting Banana Slugs To A Brake Test

Commentary by Roger Erickson

And maybe free polishing of their dragging knuckles too? They like perks.

With So Many Job Openings, Why So Little Hiring?

Easy! Public liquidity lag precedes a public initiative lag, which precedes an employment lag, & training lag, & practice lag ... and they all precede a job/skills mismatch? Can Luddite's say F.L.O.W? As in a sequence of linked, causal events?

What? We're going way too fast for 'em? 
What's that? Come back in 3 generations, to see if their train of thought has started boarding at the station? What if - after another 3 generations - we're no longer using things called trains? What then, genius? Can we move along a bit quicker, and leave the knuckledraggers to graze in blissful ignorance?

Come on! Even Herodotus noticed this fact, first hand, over 5000 years ago, in the first Pyramid scheme. Preparation precedes results. Don't faint. It's a simple truth.

Not sure how el Knuckledragger says the following with a straight face. Did he get a repeating recording saying "breathe-in, breathe-out" as a graduation gift?

"One possibility is that there is a mismatch between the work that companies need done and the skills that workers have."  

Really! Ya Think? BRILLIANT! Where has he been the last 5000 years? Words fail me, witnessing this blinding display of perception in action. He'd put a banana slug to a brake test, that's for sure.

Was this particular genius coached to come up with this breathtaking concept, before anyone else?

Where do they find people this thick? And why put them in policy positions?


Magpie said...

To be fair to Orzsag, I don't believe all the explanations he proposes are necessarily incompatible with PK doctrine.

He mentions 4 explanations:

(1) Structural skills mismatch
(2) Employers offering wages too low.
(3) Employers are promoting staff from within its existing labour force.
(4) Employers have reduced their recruiting intensity.

Orzsag goes on to criticize alternative (1), on which MMTers would agree, I believe. This is a more macroeconomic explanation: no reference to motivations.

I have little to say about alternative (3), except that even if this happens at firm level, a priori, it doesn't sound to me like a sufficient explanation. This is a clearly microeconomic explanation.

Alternative (2) and (4) are rather similar: employers saw a modest rise in demand for their products, due to the insufficient stimulus spending; they started feeling pressure to increase their workforces by hiring new staff; but knowing that unemployment is still high, they can afford to offer low wages/demand overqualified staff for a position that don't require the qualification: their existing workforces, fearing unemployment, are more pliable.

Both (2) and (4) explain a macro phenomenon from a micro perspective, that is undeniable. The question, I'd say, is whether the micro explanation offered by Orzsag conflicts with the macro explanation offered by MMT.

Like I said, and I may be mistaken, but I don't this as a necessity.

I've written a series on the "recruitment intensity" thesis:

Skills Shortage? US Evidence.

It's long and probably boring (so you read it at your one peril), but it may be useful.

Ralph Musgrave said...

The article linked to by Roger above makes the bizarre claim that “Over the past three years, the number of job openings has risen almost 50 percent.” That just doesn’t tally with the chart or the tables in article. The actual rise according to the chart is about 15% (18% at most).

Roger Erickson said...

No one's arguing much about the issues raised in the article. The point is that a skills/jobs mismatch is the whole point of evolution and adaptation, and that humans knew that before they fully diverged/reunited with common relatives.
I'd bet $ that Neanderthal & Homo discussed this very point.

The bigger point is that someone who previously pretened to "serve" public policy in a White House staff position wouldn't bother to - or couldn't - move the discussion along at anything resembling a useful pace.

Where, 20, or even 4 years ago, was the fiscal policy to address this looming mismatch? Where was the national goals strategy? Where was the citizen investment and retraining policy?

Here's what Orszag reminds me of.

i.e., a totally useless talking head, preaching banalities that were pre-requisites 10 steps BEFFORE the starting point of any useful discussion.

He's not just part of the problem, he epitomizes it. Forget the Mother of all Policy Incompetence & Bureaucracy - you just met her illegitimate offspring, still cluttering the airwaves, and keeping any relevant train of thought from even boarding at the station, letting alone getting underway.

Roger Erickson said...

$10 says Orszag doesn't even recognize the name "Marriner Eccles" - so of course he's never read a word of his illustrious predecessors actual public service history.

Orszag acts as though public fiat is just a big salary one gets for dotting i's and crossing t's enough to maintain gridlock in class warfare.

Heckuva job, Orzie!

Tom Hickey said...

What seem to be happening in the job market is that headhunters are having a field day as firm focus on hiring up. They will only consider people with jobs and do not want to see resumes of people without jobs, i.e. the rejects. The objective now is to hire away the cream. The reject won't get their chance until the economy improves and competition increases enough in the labor marker. This the insider talk but it is pretty obvious for anyone that understands firm behavior.