Tom writes:
> Jim,
> WTF are you talking about?
Tom, as is traditional in serious e-mail discussions, I am simply
responding to what you wrote in your previous missive, after directly
quoting what you said (rather than imagining what I thought you said).
What you say immediately below in this new missive is going back to a
different question, the one that appeared before and started this
thread.
The kind of "topic drift" seen in this thread is normal on pen-l if
not all e-mail discussion groups; I don't know how anyone can insist
that every discussion of this sort can always stay totally on point
(however nice it would be). The effort to keep every discussion
exactly on topic seems worthy of King Canute.
Changing the question once again back to the original one is of course
okay (though asking "WTF" about the new topic differing from the old
seems a bit silly). Your return to the original question is fine by
me.
> If you will recall, I posted an abstract and link to an article about
> President Franklin Roosevelt's Reemployment Agreement of 1933. You went off
> on a dismissive digression "not especially wonderful" in a response to Sean
> Andrews
As seen immediately below, all I said was that in effect the idea is a
lot like the current US system of unemployment insurance (though
sharing jobs instead of money). It's not ideal, but it's not bad
either. The first part ("not ideal" or "nothing especially wonderful")
is not "dismissive" when read in the context set by "not bad" or
"nothing wrong." Both "not especially wonderful" and "nothing wrong"
are part of the standard "let's look at both the bad side and the good
side" approach that most economists use. What's wrong with that
approach? It's used by a hell of a lot of real people, not just by
economists.
This is what I said: >> there's nothing wrong with [the PRA]. It's
also not especially wonderful either. Job-sharing of this sort is a
kind of unemployment insurance. It doesn't deal with the problem of
low aggregate demand, though (like unemployment insurance) it may act
as an automatic stabilizer. It does lower _measured_ unemployment (as
usually measured).<<
> and then yet another digression in a response to Gene Coyle.
I guess that this digression might be my fault because I shouldn't
have replied to Gene at all. (mea culpa!) As far as I can tell, he
suggested that there is _no_ problem of deficient aggregate demand
behind today's high unemployment. I discussed it with him, presenting
references to empirical data, etc., until he got into being insulting.
A total waste of time. (but maybe it's a harmless indoor sport like
masturbation or voting.)
> And now
> you insist on worrying your irrelevant bone about axiomatic identity between
> excess capacity and insufficient aggregate demand as if the real question at
> stake is how many angels can fuck on the head of a pin.
This statement is _totally incorrect_, either a misrepresentation of a
misinterpretation.[*] I did _not_ present any kind of axiomatic
identity between unused capacity and insufficient aggregate demand. I
don't see where anyone could interpret what I wrote in those terms.
In fact, I noted that unused capacity can be associated other causes
besides inadequate aggregate demand (and cited my JEBO article as
evidence, flogging it once again _ad nauseum_).[**] No-one has to read
my papers, but when I write on pen-l I wish that people would please
read what I wrote before responding to it.
I _do_ believe that defining one's terms helps clarifies thought,
which means that some sort of axiomatic thinking is required (even
though it is insufficient).
> Did you read even the abstract of Jason Taylor's article?<
Of course I read the abstract. That's what I was commenting on. See my
comment quoted above. (What does the actual article add?)
> Could you explain what you mean by "not especially wonderful" and tell us
> just what would be "especially wonderful" and why we can expect such an
> especially wonderful policy response to materialize?
I explained that above. It really can't be understood out of context,
i.e., without the phrase "nothing wrong."
How can we get a better policy? why did FDR think of such policies in
the first place? it wasn't because he was a nice guy, but likely
because of "social ferment" (veterans' marches on Washington, farmers
burying live pigs, rent strikes, etc.) How can we get a better policy?
from even more ferment, a more class-conscious and organized working
class. Other dominated groups should be more conscious and organized
too, of course.
--
Jim Devine / "In an ugly and unhappy world the richest man can
purchase nothing but ugliness and unhappiness." -- George Bernard Shaw
[*] I like the metaphor, "worry an irrelevant bone." But I worry about
"relevant to whom?" The unused capacity seen in aftermath of the
aggregate demand failure of 2007-9 seems quite relevant to the Occupy
Wall Street people and my students (who face a horrible job market).
The falling optimal number of work-hours per year over the years seems
less "relevant" to most people, I'd guess.
[**] Specifically, let me state one conclusion of my article as
follows (as I've done on pen-l before). Minsky points to the way that
maintaining full employment in a capitalist economy, however worthy,
encourages excessive leverage in the financial system. Kalecki (and
also the so-called "Austrian" school) point to the way in which
maintaining full employment encourages the existence of unused
industrial capacity (and mismatches between the existing capacity and
the structure of demand). Together that means that even though high
aggregate demand (pumped up by monetary and/or fiscal policy) can get
the economy up to full employment of labor after a recession, it may
not be profitable for business to spend in a way that keeps the
economy there without there being serious inflation. Thus, it's
possible that the "Great Moderation" from the late 1980s to the mid
2000s (with sustained high aggregate demand) created the imbalances
which made the Great Recession of 2007-09 so bad. NB: I don't know if
that's a correct explanation of what happened or not. But even if it
is, it doesn't mean that pumping up aggregate demand is the only
possible angle of attack. Directly attacking the problems of the US
housing market (say, following Dean Baker's plan) would help a lot. Of
course, that's politically infeasible at this point...
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