Eugene Coyle wrote: > It won't go like the '80s. Max asked, (below) how things will go if high > unemployment lasts five years or more. > > First, it seems more than a possibility that high unemployment will persist > for years. More a likelihood of high unemployment. Monetary policy is > already stretched to what we used to think was its limit. Fiscal policy, > i.e. government spending to replace the consumer and investment spending > gone missing seems totally constrained by the hawks on the deficit, by the > decline of the dollar, and by the diminishing (or disappearing?) interest of > other countries to lend to the USA.<
right. > That leaves the third tool of macro policy, cutting working hours offered on > the market. if you're going to rule out further expansionary fiscal policy based on the power of the "deficit hawks," you should rule this one out, too. Capitalists would resist this policy like the plague, likely more than they resist government deficits. This extra resistance is especially likely in that fiscal deficits actually have been acceptable among much of the economic establishment, especially after the melt-down of 2008. > There is, and has been, a surplus of work on offer for years, a cumulatively growing surplus. That leaves wages and consumer buying weak.< This is true, since wages have been growing more slowly that GDP in recent decades. > In other surplus supply conditions, steps are taken to correct the >imbalance. To correct this one the Wages & Hours Act needs to specify a four day week.... < how do we do this? by decree? how do we prevent worker incomes from falling in step with (or even more than) hours? I doubt that labor unions and their allies are strong enough at this dreary point in history to push through this legislation _and_ defend wages. After all, it looks as if the the much milder "Employee Free Choice Act" will lose any of the teeth it had. > Since even "progessive" economists seem reluctant to discuss, never mind > advocate cutting the work week, it will take years to achieve what must in > the end be achieved. why the sneer quotes? BTW, I've discussed this issue before on pen-l. Since "progressive" economists are reluctant to discuss it, I must not be "progressive." That's fine, since the word is pretty meaningless (Carrol alert!!), currently being used as a euphemism for New Deal "liberal." -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list pen-l@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/pen-l
