Chuck wrote: > Yes they seem to understand the statistics they look at, but that leads to > nothing. The use of the word `cyclical' is in contrast to the alternative > `structural'. Cyclic phenomenon go away if you wait. Structural phenomenon > imply that you have to something and take action to change. If it is cyclic > then it's just a matter of time to adjust without action.
To be fair, Yellen is trying to refute a stubborn piece of rightwing propaganda. Rightwing economists are arguing that the reason why unemployment is high is "structural." This does not mean what (e.g.) Marxists usually mean by the term "structural," i.e. that unemployment is an inherent result of capital accumulation. No. What the rightwingers mean by "structural" is that the existing labor force does not have the skills that expanding industries require of them, and that -- therefore -- the government cannot do anything to reduce unemployment. Government spending, in particular, is not going to help. What is required is time and the actions of people and businesses prompted by market signals. Responding to wage differentials, workers are supposed to acquire new sets of skills and make themselves employable in the expanding industries, and so on. Paul Krugman has noted that the same "structural" argument was used during the Great Depression to justify austerity. Yet, WWII dispelled all that nonsense, as farmers became soldiers and housewives became manufacturing workers almost overnight. Government spending pushed the economy to "full employment" in no time prompted by the involvement in the war. (To see how the Great Depression and its aftermath entailed the sectoral restructuring of the economy, google what Joseph Stiglitz has written about the topic.) I know that the underlying argument here is the extent to which a liberal or progressive economist, like Yellen, can make any difference in the class struggle by being at the Fed or at any other government agency for that matter, or the extent to which working people should demand that the government spend and create jobs for the unemployed. But that is a separate discussion. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
