Excerpting a paragraph from the full text below: On Tue, 22 Jun 2010, Ed Weick wrote:
> So really, the question is spend on what? How should governments go > about ensuring a higher level of employment in the future? Several > things need to be considered. One is whether spending on investment > banks and shovel-ready projects is really doing anything. Yes indeed > Bear Sterns and AIG will live to scam the public another day. And yes > indeed sidewalks and swimming pools will be built, but then what? If > the money was spent on educational programs aimed at getting the > long-term unemployed back into the work force, might that not be > better than bailing out banks that deserved to go broke or sidewalks > that could be rebuilt if really necessary? The thought immediately occurs to me that it would be wonderful if a lot of jobs that were around before never came back. So, I think, would it be better for people to go back to work, or better in the long run if we find something else for them to do than "work" in the old meaning? Certainly, the planet has been ecologically a bit happier in the last couple of years when the economic slowdown eased the consumption of fossil fuels. If people have to be doing work of some kind, what would I like to see them doing? What could they do which would be a net benefit for the world as a whole, as opposed to just pushing us to oblivion faster? Well, what we need right now is a whole lot of preparations for a world where the petroleum we've depended on for our agriculture and its delivery is scarce and expensive. We should be gearing up for alternatives in energy, fertilizers, vehicles, and travel corridors. Every non-fossil fuel method of producing energy should be being not just explored, but exploited. I expect we'll need everything we can muster. For instance, how will Canada cope with winters for 36 million people when heating energy is the dominant expense for most households. I could see it getting to over 2/3 of the household budget. I expect we'll make a lot of mistakes, but we should be out there making them now, so we can get smarter quickly. There's not much time. -Pete On Tue, 22 Jun 2010, Ed Weick wrote: > New York Times columnist and Nobel Laureate Paul Krugman urges the US > government to keep spending: > > > > Right now, we have a severely depressed economy - and that depressed > economy is inflicting long-run damage. Every year that goes by with > extremely high unemployment increases the chance that many of the > long-term unemployed will never come back to the work force, and > become a permanent underclass. Every year that there are five times as > many people seeking work as there are job openings means that hundreds > of thousands of Americans graduating from school are denied the chance > to get started on their working lives. > > Penny-pinching at a time like this isn't just cruel; it endangers the > nation's future. And it doesn't even do much to reduce our future debt > burden, because stinting on spending now threatens the economic > recovery, and with it the hope for rising revenues. > > > > But how much can high levels of spending really do about the American > unemployment rate? Perhaps a little, but perhaps only a little. > Currently the US unemployment rate is given as 9.7% by the Bureau of > Labor Statistics, down a little from the 10.1% in the latter months of > 2009, but this is an optimistic figure that does not include millions > of "discouraged" workers who have given up searching for work. Nor > does it include those forced to work part-time, whenever some work > comes along. If all of these were included the real jobless rate > could be as high as 17 to 18 percent. > > It is questionable whether continued large-scale spending of the kind > Krugman advocates would do very much about this problem. One question > that needs to be asked concerns just who the unemployed are and, given > the state of the economy, how employable are they? One source states > that > > .unemployment is concentrated among the young, less educated, and low > skilled. For example, according to the March 10th report of the Bureau > of Labor Statistics, (seasonally adjusted) unemployment rates in > February of this year was 16% for high school dropouts, 11% for high > school graduates, only 8% for persons with some college or associate > degrees, and a quite low 5% for persons with a bachelor's degree and > higher levels of education. Similar differences are found by age and > skill level. So .. the burden of increased unemployment is still being > mainly borne by the young and less skilled. (Becker - Posner blog, > 03/15/2010) > > > While many of these workers would have been employable in former times > or in much better economic times, during recent years the US economy > has moved from a major concentration on goods production to an > increased emphasis on services production. Services, such as > financial services require considerably more specialization than most > of the unemployed carry. > > So would the kind of spend, spend, spend remedy envisaged by Krugman > really work? The answer depends in considerable part on what the > money is being spent on. Much of the anti-recessionary money spent in > the US during the past two years has gone toward bailing out banks and > other financial institutions that bought up the 'troubled assets' > created during the sub-prime mortgage crisis - in other words, the > prime beneficiaries were financial institutions and not the long-term > unemployed. > > In Canada, a primary focus of stimulative spending has been on > "shovel-ready" jobs. Via Canada's Economic Action Plan, roads are > widened, swimming pools and sidewalks are built, and community > buildings are repaired. While the plan is useful in providing some > work in communities, the Action Plan will not result in the kind of > change needed to help people move into a future of permanent > employment. > > So really, the question is spend on what? How should governments go > about ensuring a higher level of employment in the future? Several > things need to be considered. One is whether spending on investment > banks and shovel-ready projects is really doing anything. Yes indeed > Bear Sterns and AIG will live to scam the public another day. And yes > indeed sidewalks and swimming pools will be built, but then what? If > the money was spent on educational programs aimed at getting the > long-term unemployed back into the work force, might that not be > better than bailing out banks that deserved to go broke or sidewalks > that could be rebuilt if really necessary? > > So, yes indeed, spend, spend, spend, but do give a lot of thought to > what is being spent on. Otherwise the only thing that will happen is > what is already happening - the build up of huge and unmanageable > deficits. > _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
