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It's really been 10 dogs, 11 bones since the flood...
People don't need jobs, per se, they need the ability to WORK - said ability largely stolen via government subsidies for depository institutions, which Neil supports.Solutions from people who support the cause of the problem? I think not.Let's have justice and that involves reform and restitution - not make work to keep people too busy and tired to think about such.
Andrew, I don't support bank subsidies any more than you do, but I don't see why bank subsidies raise unemployment (although like any unjustified subsidy they do cut GDP). A subsidy for florists would increase numbers employed by florists and cut employment elsewhere. There shouldn't be any NET effect on numbers employed.
Automation, Ralph - financed with the legally stolen purchasing power of the workers, among others.
I.e. workers are forced to lend (a deposit is legally a loan) to depository institutions to lower the borrowing costs of their bosses who then use the loans to dis-employ their workers. That or be limited to physical fiat, coins and bills.Sound fair to anyone?
Getting back to Neil's article, I like the idea that "You take the person as they are and you find/build a job for them as they are." So to take an example, if a chef is unemployed, you set up a restaurant (cost a minimum $50,000 or thereabouts) and run it at a loss. Then the chef gets a regular job two months later, so the restaurant is closed down: $50,000 down the drain. Meanwhile, commercially viable restaurants in the area will complain about unfair competition (just as regular contractors complained about unfair competition from the WPA in the 1930s).To continue with the restaurant analogy, this sounds like a dog's dinner. The details need to be thought thru.
Andrew, "Automation"??? So now you're backing the old Luddite argument that machinery puts people out of work?
ETHICALLY FINANCED automation is great, Ralph. I'm no Luddite.Besides, at some point automation DOES eliminate jobs. Therefore it should be ethically financed, don't you think?
AA-So much trash. Deposit insurance protects depositors not the bank itself. And Bank deposits are not loans to the bank since you cant loan an entity its own IOUs. And the Fed sets the base rate, it has nothing to do w your idiotic "stealing purchasing power" schtick.
Ralph-Just because you can imagine a stupid way to implement a JG and then criticize said stupid thing, doesnt mean that thats how a JG would work.Maybe something like the unemployed chef has the option of cooking in a food pantry type charitable thing if he/she would like, or maybe he\she could cook meals for seniors who suffering from medical problems. Or maybe the chef can teach classes to poor people about how to prepare relatively healthy meals. The JG is only limited by our imagination.
Deposit insurance protects depositors not the bank itself. APDoes it seem right to you that "loans create deposits" that the rest of us must then insure? When the monetary sovereign can and should provide inherently risk-free accounts to all citizens and not just to a usury cartel of depository institutions? Since fiat should be for all citizens to use in convenient account form? And not just the "banks"?And Bank deposits are not loans to the bank since you cant loan an entity its own IOUs. APSure you can, otherwise you can redeem them for physical fiat (until that is abolished) or transfer the liability (for fiat) to another member of the usury cartel.
"Does it seem right to you that "loans create deposits" that the rest of us must then insure?"Govt insures the deposits not you and me, so yeah no problem there"When the monetary sovereign can and should provide inherently risk-free accounts to all citizens and not just to a usury cartel of depository institutions?"Govt already offers risk free bank accounts for the public, they are called TSY CDs. I've got nothing against the idea of public banking for payments etc like postal banking. But no I dont want the Fed to open 1000s of branch offices to become the main banking service for citizens (There are roughly 100,000 bank branches in the USA per the FDIC)."Since fiat should be for all citizens to use in convenient account form? And not just the "banks"?"We accomplish everything you want here with deposit insurance, which is designed essentially to guarantee par convertiblity between Govt fiat and bank deposits."Sure you can, otherwise you can redeem them for physical fiat (until that is abolished) or transfer the liability (for fiat) to another member of the usury cartel."No you cant, and nothing in this sentence shows otherwise.
" maybe he\she could cook meals for seniors who suffering from medical problems. Or maybe the chef can teach classes to poor people about how to prepare relatively healthy meals."I have this acquaintance young female... completely legit SJW this is exactly what she wants to do and has been trying to get the local govt to sponsor her for an after school program and set up a teaching kitchen/pantry and summer program .... all they keep telling her is they cant afford it.... ie "out of money!"
Automation and mechanization don't cost jobs? I think some futurists are too optimistic on the time frame, but are we really betting on automation not continuing apace? Seems self-driving cars are a fairly certain bet at this point, probably put 1.5 million well-paid truck drivers out of work within most of our lifetimes. The saved costs will go straight into the pockets of the 0.1%.Just read an article today about how a fruit picking machine couldn't distinguish between ripe and unripe fruit, but machine vision systems are already (for many years now) running QA operations in some industries (eg frozen food conveyor belt style stuff, discards misshapen food). Just a matter of time until the fruit picking machine company hires a half dozen machine vision experts, tosses them a measly couple hundred grand, and then makes major inroads in the migrant labor market.Maybe the JG was a good idea 50 or 100 years ago, and maybe will be a decent stop-gap measure, but, I think we're looking at much bigger issues now.
I've got nothing against the idea of public banking for payments etc like postal banking. APGood, then government provided deposit insurance should then be abolished because all remaining deposits with depository institutions would be voluntary, at-risk, not necessarily liquid INVESTMENTS, not commingled with the necessary liquidity an economy needs ELSE moral hazard.But no I dont want the Fed to open 1000s of branch offices to become the main banking service for citizens APNo need since government should stay out of the lending business and leave that to private banks. Post offices and the Internet can provide the risk-free storage and transactions in fiat that a monetary sovereign SHOULD provide.We accomplish everything you want here with deposit insurance, which is designed essentially to guarantee par convertiblity between Govt fiat and bank deposits. APNo they can't. Their effect is to render liabilities of the usury cartel largely* a sham wrt to the general public. So how can we have honest accounting with sham liabilities? No you cant, and nothing in this sentence shows otherwise. APIf I have a $1000 in a checking account then the bank owes me $1000 in fiat on demand. To keep me from redeeming that debt the bank pays me interest; therefore I am loaning back to the bank its liability for fiat for interest.***Only largely since bank liabilities can still, for the present, be redeemed with physical fiat.**Also because I have no choice but to use one depository institution or another or else be limited to physical fiat, coins and bills.
Auburn, Who said anything about deposit insurance? Andrew MAY HAVE had deposit insurance in mind as an example of a bank subsidy, but he didn’t specifically say that. Certainly the most common form of bank subsidy cited is the TBTF one.Next, you say “And Bank deposits are not loans to the bank since you can’t loan an entity its own IOUs.” Well who ever said that a deposit DOES involve lending a bank its own IOUs? A deposit at bank X does not involve depositing X’s liabilities at bank X: it involves (after settlement has taken place) depositing base money at X.And finally you criticise the idea that a subsidy involves “stealing purchasing power”. Strikes me that’s a very good definition of a subsidy!!!
Auburn, Re my allegedly "stupid" way of implementing JG (i.e. setting up an entirely new employer or business to take on the unemployed) that's exactly how numerous JG schemes in past have worked: e.g. the biggest JG scheme of all time, namely the WPA in the 1930s. To that extent my suggestion is not stupid.But I fully agree with your suggestion as to how to avoid the above "stupidity" and that's to seek out relatively unproductive vacancies with EXISTING employers. I.e. (and contrary to Neil's suggestions) there is no need (in a sense) to "create" jobs specifically for JG people: those jobs/vacancies are already there in that every employer has a huge range of potential and relatively unproductive jobs he or she could create if the price of labour was low enough, e.g. if the labour was available at a very low rate or for free as under JG.
Great post by Neil. The epitome of clarity and insight, as always.
Yes, Neil has a knack for cutting to the chase without the fifty-cent words.HIs byline, "I am not economist is key here. Academic economists have to write with one eye on the audience and the other on the profession, so it limits their approach. Being an "ordinary bloke," Neil can just say it as it is.Well done.Peter, on the other hand, is a non-academic economist and furthermore, doesn't give a shit about what the profession thinks. That is a huge asset too.
That is a huge asset too. TomWhile I've been banned, Tom? Where are my comments going, if not?
I just fished two of your comments out of spam, AA.
Joe:Maybe the JG was a good idea 50 or 100 years ago, and maybe will be a decent stop-gap measure, but, I think we're looking at much bigger issues now.Joe, the logic is backwards. The (wildly oversold and overstated imho) developments you state are arguments for the increasing urgency of a JG, not against it. The JG is not a "stopgap". A money-using society without a JG is a psychotic, inhuman idea, the same way that slavery is a psychotic, inhuman idea.Ralph - equating subsidies with “stealing purchasing power”, the idea that "There shouldn't be any NET effect on numbers employed" is an extreme neoclassical position and is rarely true of the real world. The NET effect is very real with a JG, especially one organized as "stupidly" as the WPA, whose NET effect was yuuuge. It is one half of the reason for functional finance, MMT & the JG - the other half is that the JG jobs should be doing good stuff that people want done.
There is either a buffer stock of employed (JG) or a buffer stock of unemployed (labor reserve that reduces labor bargaining power). https://en.wikipedia.org/wiki/Reserve_army_of_labour
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