The mythology of the "invisible hand" of "free market competition" working in "an efficient market" was pushed when it was profitable for American corporations and banks.
"Creative destruction" was the process by which the "free market" created new jobs as it destroyed old jobs. Sometimes the process was painful, but oh well, that's just evolutionary nature in action. Nature "red in tooth and claw" and all that good stuff.
Not when it comes to destroying banks though. Then it is the tax paying proles who must rescue bankers. No creative destruction allowed here.
The criminal banks who made the fraudulent loans, which crashed the system, which destroyed middle class jobs, have now been rescued. Bank profits are buoying the stock market. Fed low interest loans to banks (necessary for the health of banks dontchaknow) are allowing bank profits to soar, the stock market to zoom upwards, and bankers to continue to take home obscene paychecks.
It is now time to trot out another suitable mythology. It is beginning to be fashionable to lay the responsibility for unemployment at the feet of the victims who are unemployed. It is their fault. There are plenty of jobs, it is that the unemployed are unqualified for the new jobs. The old canard about the unemployment being "lazy" is now complemented by the comment that they are "stupid".
"It's not our problem that the world bought our fraudulent loans, the world crashed and you lost your jobs, you stupid buggers", now say the bankers. "It's the fault of you dumb jerks who didn't get a degree in marketing fraudulent loans. You know how many Chinese and Vietnamese workers our clients can hire to do the same manufacturing and engineering jobs you are doing?"
"And do you know how many Indians can write better code at one tenth of the cost of an American programmer?"
"You mean you bought the idea that American manufacturing is "better" than Chinese and Japanese manufacturing? And that Indian programmers are not as skilfull as American programmers? Ha Ha Ha..;. "
"You mean you bought the dream we sold you that working a 40+ hour week in an American factory, with two weeks vacation a year, and keeping your nose clean, and staying out of jail, will educate your children, assure their health care, and let you retire in dignity? Ha, Ha, Ha, Ha ..."
"Where do you think the Chinese and the Indians learned their skills? You mean you didn't know? From our clients of course. They built their manufacturing factories abroad with borrowed funds from American banks, through a variety of sources (including foreign governments), collateralised by the profits generated by your rapidly increasing productivity, your stagnant compensation, and the suddenly lower wages paid to foreign labor?"
"You didn't believe your labor unions when they told you that, because they too were lazy, corrupt and sooooo 19th century."
"What do you mean we should be taxed on profits made on stuff made abroad and sold in America? Don't you know anything about free trade and Adam Smith?"
"You now want a job? You need to be trained? Go join the army you stupid f#@%*s. They are recruiting. They will always have jobs. We bankers will need all the protection we can get. It will be a long time before Americans lose the ability to buy crap, and we have long sea lanes and airways to protect for oil, iPad imports and other toys for the amusement of our unemployed citizens."
"You always wanted the freedom of a volunteer army. No mandatory government service you said. Well, you now have a volunteer army and all its works and pomps. Enjoy it. Our American heroes will educate your children -- if they enlist."
Structure of Excuses
By PAUL KRUGMAN
What can be done about mass unemployment? All the wise heads agree: there are no quick or easy answers. There is work to be done, but workers aren’t ready to do it — they’re in the wrong places, or they have the wrong skills. Our problems are “structural,” and will take many years to solve.But don’t bother asking for evidence that justifies this bleak view. There isn’t any. On the contrary, all the facts suggest that high unemployment in America is the result of inadequate demand — full stop. Saying that there are no easy answers sounds wise, but it’s actually foolish: our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act.
In other words, structural unemployment is a fake problem, which mainly serves as an excuse for not pursuing real solutions.
Who are these wise heads I’m talking about? The most widely quoted figure is Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, who has attracted a lot of attention by insisting that dealing with high unemployment isn’t a Fed responsibility: “Firms have jobs, but can’t find appropriate workers. The workers want to work, but can’t find appropriate jobs,” he asserts, concluding that “It is hard to see how the Fed can do much to cure this problem.”
Now, the Minneapolis Fed is known for its conservative outlook, and claims that unemployment is mainly structural do tend to come from the right of the political spectrum. But some people on the other side of the aisle say similar things. For example, former President Bill Clinton recently told an interviewer that unemployment remained high because “people don’t have the job skills for the jobs that are open.”
Well, I’d respectfully suggest that Mr. Clinton talk to researchers at the Roosevelt Institute and the Economic Policy Institute, both of which have recently released important reports completely debunking claims of a surge in structural unemployment.
After all, what should we be seeing if statements like those of Mr. Kocherlakota or Mr. Clinton were true? The answer is, there should be significant labor shortages somewhere in America — major industries that are trying to expand but are having trouble hiring, major classes of workers who find their skills in great demand, major parts of the country with low unemployment even as the rest of the nation suffers.
None of these things exist. Job openings have plunged in every major sector, while the number of workers forced into part-time employment in almost all industries has soared. Unemployment has surged in every major occupational category. Only three states, with a combined population not much larger than that of Brooklyn, have unemployment rates below 5 percent.
Oh, and where are these firms that “can’t find appropriate workers”? The National Federation of Independent Business has been surveying small businesses for many years, asking them to name their most important problem; the percentage citing problems with labor quality is now at an all-time low, reflecting the reality that these days even highly skilled workers are desperate for employment.
So all the evidence contradicts the claim that we’re mainly suffering from structural unemployment. Why, then, has this claim become so popular?
Part of the answer is that this is what always happens during periods of high unemployment — in part because pundits and analysts believe that declaring the problem deeply rooted, with no easy answers, makes them sound serious.
I’ve been looking at what self-proclaimed experts were saying about unemployment during the Great Depression; it was almost identical to what Very Serious People are saying now. Unemployment cannot be brought down rapidly, declared one 1935 analysis, because the work force is “unadaptable and untrained. It cannot respond to the opportunities which industry may offer.” A few years later, a large defense buildup finally provided a fiscal stimulus adequate to the economy’s needs — and suddenly industry was eager to employ those “unadaptable and untrained” workers.
But now, as then, powerful forces are ideologically opposed to the whole idea of government action on a sufficient scale to jump-start the economy. And that, fundamentally, is why claims that we face huge structural problems have been proliferating: they offer a reason to do nothing about the mass unemployment that is crippling our economy and our society.
So what you need to know is that there is no evidence whatsoever to back these claims. We aren’t suffering from a shortage of needed skills; we’re suffering from a lack of policy resolve. As I said, structural unemployment isn’t a real problem, it’s an excuse — a reason not to act on America’s problems at a time when action is desperately needed.
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