On Monday, September 19, 2011 at 10:33:17 (-0400) Doug Henwood writes: > >On Sep 19, 2011, at 9:33 AM, Bill Lear wrote: > >> So, in short, anything that might diminish the ability of a government >> to bail out the financial system, say by spending money to push up >> employment, will be fought tooth and nail by these gigantic >> institutions. > >But high unemployment makes it far more likely that banks will need to >be bailed out. If unemployment were 5% and GDP growth was 3%, there'd >be no financial crisis. And it's not like we're anywhere near the >trigger point at which full employment becomes "dangerous," by >increasing the bargaining power of labor vs. capital. So I don't buy >this explanation.
So, how does high unemployment lead to financial instability? Do you mean that low GDP growth (from high unemployment) increases financial instability? Unemployment was well under 5% in 2006 and 2007, and growth, while not terrific, was not terrible, and yet we shortly thereafter had a huge financial crisis. Bill _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
