At 20:08 08/05/2011, D&N wrote:
(D&N)Thanks again, Keith,
Yes, Presidential Monetary Authority selection is a possible (say
likely) conflict of interests, and would likely be further
jeopardized by his or her lack of education. And I agree with you
that the Federal Reserve serves no public purpose.
With respect to your comment about the record levels of unemployment
and under-employment effect the Nat'l Employment Emergency Defense
Act is attempting to address:
(KH) But here we also have to take into account that the industrial
economy of the last 300 years is now becoming less labour-intensive
from year to year due to increasing automation and (so far)
redundant personnel can't be re-trained quickly enough. This is a
major structural problem for which no-one or no-thing can be held
primarily responsible (unless it be the ever-innovative ability of
the human mind!). Even in China, with 10% p.a. GDP growth,
unemployment is now growing in the prosperous coastal provinces. Not
only are the 200 million temporary migratory factory workers being
sent back to the rural interior but also a few million of the
provinces' own graduates are without jobs (even engineering
graduates!) or have to take menial ones. The great shift of
low-skill employment from the West to China has now probably largely
ceased and China is now beginning to face the same structural
problems as the West.
Because a substantial number of jobs were lost to developing
nations, and presuming nothing would be done to address that, the
Act, in seeking to stimulate job growth by investing in American
infrastructure, should help to stimulate a great number of jobs that
would not require much retraining, and should also give rise to
re-hiring of teachers, medical staff, engineers, technicians, etc.,
who lost jobs due to cutbacks.
Natalia
(KH) The aims as stated in the last paragraph are desirable ones and
I wouldn't want to quarrel with them. But whether they would
necessarily follow the passage of Kucinich's bill is another matter.
Having read through the proposed National Employment Emergency
Defense Act -- which is essentially about the creation of
government-controlled and -directed money -- I'm afraid that I
disagree with its basic premiss. This is that money itself can be the
stimulant for full employment and, presumably, economic growth.
Whether money is created by government (by printing) for worthy aims
and/or by banks (via credit) for possible business success it still
doesn't necessarily produce employment or growth. At best, it can
only produce slight alleviation of unemployment (as in Roosevelt's
New Deal of the 1930s); at worst, it produces inflation (in which the
savings of many are wiped out, and the debts of many of the rich and
comfortably-off are neutralized).
Money is only an intermediary, and the amount of it, and the value of
it, is only a byproduct of the demand of consumers for particular
goods and services. For full employment or for economic growth (as
defined notionally by GDP) there needs to be chain of demand from the
poorest to the richest. High-priced goods or services initially
affordable by the rich, if mass-producible, work their way down
through the social classes as they become cheaper. As some low-priced
goods become affordable by the poor then they have aspirations to own
and enjoy one or more items that the next higher class already has.
It's a two-way chain -- goods and services working downwards, comfort
and status working upwards. So long as the chain is unbroken then
people of all classes will work voluntarily according to their
abilities and the opportunities open to them -- that is, full
employment for all able-bodied adults.
It is this sort of two-way chain which has occurred in fits and
starts through all history, ever since we forsook hunter-gathering
and began to be civilized (that is, living in ever-larger dense
groups of people and having to modify our behaviour accordingly).
When the chain stops in any particular region or civilization, or
indeed goes backwards (for example, when invaded by vandals) then
that culture can be locked into a particular way of life for long
periods, perhaps centuries in many instances. The latest chain is, of
course, the industrial revolution which I would date roughly as
occurring between 1780 and 1980. I would maintain, however, that this
chain has now stopped and that economic growth -- as we presently
measure it -- has halted. In this view, the 2008/9 credit crunch is
not so much a temporary halt in the two-way chain's progress but only
one of several very weak links that must be repaired. Even if Western
countries don't achieve a resumption of economic growth and remains
in a new locked-in condition then several other important reforms
must also be achieved for full employment quite besides the necessary
stabilization of money and putting the banks and financial services
(fools or crooks to a lesser or greater degree at present) in their place.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/05/
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