Forum Post: My thoughts on how the Govt can create jobs
Posted 12 years ago on Nov. 13, 2011, 1:31 a.m. EST by VladimirMayakovsky
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There was this old guy called John Maynard Keynes. He was a genius.
He realized that there comes some times in economic history when private sector just shuts down from creating jobs, and the public sector has to step in. The jobs can be completely make work projects. One guy can dig a hole in the ground and another guy can fill it up, and both get paid for this. That gets the economy growing again.
He was right.
Now, Obama would need to do something like that. Problem is, he is a fucking conservative and wouldn't do anything like that. Problem also is that the left is out of power because of the Tea Party, and the radical Left is shitting in Zucchini Park demanding that minimum wage be made $135k/year.
I am a Clinton Democrat. I voted for Hillary, and then for Obama. I think Obama has turned out to be Dubya light. I have no hope for Obama.
So I think we are all fucked. At least the jobless are fucked. The US govt can most certainly create jobs but it won't. Because the POTUS is a pussy.
Is this the same Vladymir that claimed to be part of the 1%, and said that we should just let Chinese slave labour manufacture everything, while everyone in the United State could just get jobs in finance?
Now you seem to be in favour of Keynesian economics, and having the government provide everyone with jobs?
I have heard of the government job creations in the U.S. It's called war. Endless wars on terror, and drugs. Wars for profit. Keep blowing stuff up, keep building stuff. Kill off some surplus unemployed 99% ers. Wash, rinse, repeat.
Keynes was pretty clever in that he created stuff like WELFARE, which made sure that the economy never completely tanked again. Was welfare created so that lazy slobs could sit around and do nothing?
NO, it was created so that if someone didn't have a job, it meant he could still pay his landlord and his green grocer.
You didn't have situations like the great depression (another time capitalism FAILED), where everyone was on the streets while the houses were empty, just because the 1% said so. You didn't have situations where just because the lumber mill shut down, every other business in the town closed as well and the town became a ghost town. Those laid off lumber mill workers could still pay their rent and buy groceries.
I don't think we are ALL fucked. I think the 1% is really fucked. The US President and the US Government are probably fucked too, since this is the end of their power. But the 1% will have no one left to protect them. Not the armies, not the Police. They are also part of the 99%.
I think the rest of us will go back to the slow, gradual process of rebuilding our countries and economies so that it is locally based, with locally grown produce, and rebuilding the manufacturing infrastructure that the 1% shipped overseas. If a new currency is needed, it will be created from a central, government owned bank....a bank by the people, for the people.
No more interest to pay. No more national debt.
Who will be able to force the 99% to pay off the national debt that was so fraudulently constructed?
You are so far removed from reality that I don;t know whether to laugh or cry.
Laugh then, it's a lot more fun. Watch as the clowns dance, and trip over each other in the ridiculous circus. See? Amusing. Save your tears for later.
It does seem a little weird that you are now 'two different people'. First you were one of the 1%, enlightening us as to your thoughts.
Now you claim to be someone different, or at least someone with a radically different perspective. Now you are hiding behind the same Keynesian economics that the 1% tried SO HARD to kill....and claiming that it's not the responsibility of the 1% to create jobs.."it's the responsibility of the government." Yep, the same government the 1% have been railing against right up until the time they needed the government to bail them out of Wall street.
You seem to have conveniently forgotten that the only reason that the corporate tax cuts started under Reagan was so that the ONE PERCENT would create jobs. They would 'trickle down'.
It's been thirty years. That never happened. The people want their tax money back.
Also, I notice that your retort doesn't really constitute a counter point in my argument. If I am wrong, point out why.
I am a Democrat, dude. I believe in higher taxes than is currently in place. I believe that the Govt should do a lot to create jobs. However I am a Clinton Democrat. I believe in free market capitalism. That is not being two different people. In your world people are either the Koch Brothers or they are Che Guevara. There is a big place in between. I believe that people should be paid accordingly to supply and demand of skills, but there should be a modest social safety net as well so that people don't lack shelter, food, and clothing. I also believe that any tax hikes should go into one and only one thing, education. People who want to not educate themselves in an area where there are good jobs - like finance - are shooting themselves in the foot. The society still needs to provide some housing and food and clothing to them, but absolutely nothing more. It is the people's choice to be in a line of work which is depressed. So they better accept a depressed standard of living instead of whining about income inequality. The Govt should provide them with some menial make work that pays very little, but that's it.
Clinton was as much of a criminal as pretty much every President since Kennedy was assassinated. Your 'Democrat' and 'Republican' distinctions mean nothing to those of us that live in the counties that use the metric system.
'Free market Capitalism' is broken. It happens every ten to twenty years. It's not an accident either, it's a deliberate attempt by the 1% to increase their wealth and seize the assets of their fellow countrymen.
Pardon me, 'in my world'? How do you know anything about my world? That's a strawman if I ever saw one, pigeon-hole me into a position of your own creation, then attack that (false) position.
Just why should the social safety net be 'modest'? Why should your fellow Americans suffer, while the 1% enjoy extravagant wealth? What is the point of owning ten houses, when you can only live in one of them at a time? If the middle class were comfortable, whether they were employed or not, then you wouldn't be having the problem that is facing you now. This isn't a daydream fantasy land, this is the way things were in the 40s, 50s, 60s, and 70s.
Why should people get an education to get 'good jobs in finance'? The whole thing is a house of cards, and it's coming down right now. Do you really see the U.S. dollar as being stable after this?
Do you really think America can just keep importing goods from other countries forever? Do you have no idea that the oil is running out, our resources are running out, the world population is increasing while the north American population is shrinking and aging?
Why should the Government provide them with a job that (your words) 'pays very little'? Why not a job that pays enough to buy enough stuff not only to enjoy themselves, but to keep the economy rolling? It sounds like YOU are the one that wants to start a Government run Gulag, where people dig holes all day and fill them in for a dime a day and a bowl of porridge.
Well, given that option the 99% of the people on the planet say no. That 99% includes the Police and the Military. So when all of your savings become worthless paper, what is your next plan?
You are right. Every president since Reagan has been a neoliberal, Clinton included. Nixon, Ford and Carter were the transitional phase. The liberal consensus of the 40s-70s, and the corresponding embedded liberal economic system, offered the greatest prosperity and relative equality the world has ever seen.
I do give Clinton credit for being slightly more faithful to Keynes in his neoliberalism, in that he didn't give away the surplus in tax breaks or blow it on millitary spending, but he was a free market neoliberal nonetheless, and did nothing for the growing inequality and ongoing destruction of the safety net - not to mention the draining of the middle class in the unilateral disarmament that are free trade agreements.
Anyway, the guy you're arguing with is schizophrenic. Barely worth the time.
Yes true. Thanks for that.
But, I am not facing any problems at all, so why should I change?
The social safety net should be modest because otherwise people will stop working and just keep sucking at the public teat. Can't have that.
You seem to think there is a revolution coming. It isn't.
You are right, revolution is not coming. It is here.
Why can't we have people sucking at the public teat? The protestant work ethic? You can't provide people with work, so YOU are deciding they should only get enough food, clothes and shelter to squeak by on?
You think it's a good idea to ship all the jobs over to China, so there is massive unemployment in your own country, then say "You people can't sit around doing nothing?'
But seriously, what do the 1% do? NOTHING??? That is, unless you consider shuffling numbers around in finance as 'work'.
Present Governments cannot create jobs.
There are a huge number of "shovel ready" jobs in forensic accounting, financial transaction analysis, accounting, investigation, prosecution and incarceration of those who have perpetrated crimes against humanity including manipulation of governments, control of sovereign economies, delivery and acceptance of bribes, shadow banking, failure to exercise and enforce existing laws, theft of pension funds, theft of public funds, misuse of tax revenue, etc., etc., etc.
See, you are more angry with the bankers than angry at the lack of jobs. This is precisely why the Govt can get away with not creating jobs.
See, you are more angry with the bankers than angry at the lack of jobs. This is precisely why the Govt can get away with not creating jobs.
Misdirection, misconstruction and utter nonsense. And that's being charitable.
The government is a tool of the corporate financial complex.
I thank you for being charitable.
They could always start world war III and put everyone in military jobs.
Our government is fucked
http://occupywallst.org/forum/the-war-with-america-was-won-before-the-first-shot/
Economics nerd here, despite not quite saying what you describe there Keynesian economics has several flaws when used in that way. Lets look at it another way
The problem with work projects is that they are to simply keep people in a job rather than for any productive value. A good example is men digging a canal with shovels. It would be easier and more cost effective to use a digger to make the canal, however because the main purpose is to employ people they use a more labour intense rather than capital intense means of production. However the logical conclusion to maximise labour usage and minimise capital would to use spoons instead of shovels.
The Bush/Obama fiscal stimulus package did something similar by employing people in various public works projects etc, to the tune of some $1Tn. Obama is definitely not a conservative.
Guys, please. The goal is not to create value for society. The goal is to increase the money supply. When that increases people spend it which creates demand and in turn real jobs.
The goal is to increase the velocity of money within an economy, increasing the money supply on its own won't help an economy.
True. That's what I meant.
Where did all the jobs go? Small and medium-sized businesses are the major source of new job creation, and they are not hiring. Startup businesses, which contribute a fifth of the nation’s new jobs, often can’t even get off the ground. Why?
In a June 30 article in the Wall Street Journal titled “Smaller Businesses Seeking Loans Still Come Up Empty,” Emily Maltby reported that business owners rank access to capital as the most important issue facing them today; and only 17% of smaller businesses said they were able to land needed bank financing. Businesses have to pay for workers and materials before they can get paid for the products they produce, and for that they need bank credit; but they are reporting that their credit lines are being cut. They are being pushed instead into credit card accounts that average 16 percent interest, more than double the rate of the average business loan. It is one of many changes in banking trends that have been very lucrative for Wall Street banks but are killing local businesses.
Why banks aren’t lending is a matter of debate, but the Fed’s decision to pay interest on bank reserves is high on the list of suspects. Bruce Bartlett, writing in the Fiscal Times in July 2010, observed:
Economists are divided on why banks are not lending, but increasingly are focusing on a Fed policy of paying interest on reserves — a policy that began, interestingly enough, on October 9, 2008, at almost exactly the moment when the financial crisis became acute. . .
Historically, the Fed paid banks nothing on required reserves. This was like a tax equivalent to the interest rate banks could have earned if they had been allowed to lend such funds. But in 2006, the Fed requested permission to pay interest on reserves because it believes that it would help control the money supply should inflation reappear.
. . . Many economists believe that the Fed has unwittingly encouraged banks to sit on their cash and not lend it by paying interest on reserves.
At one time, banks collected deposits from their own customers and stored them for their own liquidity needs, using them to back loans and clear outgoing checks. But today banks typically borrow (or “buy”) liquidity, either from other banks, from the money market, or from the commercial paper market. The Fed’s payment of interest on reserves competes with all of these markets for ready-access short-term funds, creating a shortage of the liquidity that banks need to make loans.
By inhibiting interbank lending, the Fed appears to be creating a silent “liquidity squeeze” -- the same sort of thing that brought on the banking crisis of September 2008. According to Jeff Hummel, associate professor of economics at San Jose State University, it could happen again. He warns that paying interest on reserves “may eventually rank with the Fed's doubling of reserve requirements in the 1930s and bringing on the recession of 1937 within the midst of the Great Depression.”
http://www.webofdebt.com/articles/why_banks.php
Banks are not lending because the business plans today suck, as there is no demand. Same reason corporations are sitting on mounds of cash and record profit margins and not hiring. There is no freaking demand. Why is there no demand even though 91% of the population is employed? It's because consumer confidence is low. In the past consumers always would either look at the funny money in their stock portfolio or the funny money in their home equity and then borrow some and blow it on the 11th TV for the small closet in the upstairs attic, just for kicks. Now the home equity is gone so consumers are nervous about borrowing more money. The Govt can lower interest rates as much as it wants. If people are worrying about paying off the principle there will be no traction. Hence, make work jobs for the unemployed will inject some much needed money supply in the system. What we need now is massive inflation. That will do 3 things. First, it will make the debt loads melt away. Two, it will force the savers to start to spend, as saving will just lead to erosion of purchasing power. Third, people will start to buy shit again because shit will cost more the next day. The classic way to engineer massive inflation is to lower interest rates and increase the money supply. That is not working now, hence the Govt has to create make work to directly inject money into the system. We need the real Helicopter Ben to stand up and start throwing money from helicopters into the general population.
Wow ,did you actually read something? Aside from your exaggerations,like the 11th tv for the attic closet, (actually, that was kind of funny), your sort of finally making some sense. So now you have recognized that lack of demand is the problem. So now you should be able to see why the dollar an hour plan wouldn't work too well. Of course hyper-inflation is not a good goal but a little does help debtors, (unless they have an A.R.M.) I don't know if you are really so out of touch to not know that about a third of the households in the country make 25,000 or less, about 16%,under 15,000. (2009 stats) Those people are more likely to have a 15 year old analogue tv with a converter box than the 15 flat screens. Those people don't tend to have any discretionary spending ability at all. Many of these people would be the ones who would have had the manufacturing jobs that have been out sourced. This doesn't even address the unemployed . Keyensian stimulus would be much more effective if it didn't "leak" offshore. If you're going to listen to Keynes, he was quite explicit about the danger of trade imbalances.
Look, the only reason I pushed the dollar per hour plan was to make fun of those who wanted a $135k minimum wage. I also wanted to illustrate something else with the dollar per hour posts. If you want to keep jobs in the USA that can be offshored, you have to pay offshore wages or less. There is no two ways about that. So, you either pay those low salaries, or you get out of those offshorable jobs completely. Household workers, for example, cannot be offshored. Cooks, drivers, cleaners, maids, nannies, butlers, what have you, they must all be local. So low skilled people need to gravitate towards those jobs. Construction by and large cannot be offshored (except through buying equipment and replacing domestic labor, equipment made with foreign labor). Retail services, once again, cannot be offshored, but with technology changes I don't expect much retail services jobs to remain in the near future. Agricultural jobs traditionally done by illegal immigrants cannot be offshored. So those are the kind of jobs that have to replace the manufacturing labor. For that, my friend, are gone forever and won't come back unless wages drop here tremendously.
Well, I don;t suppose you 'll be surprised if I say I don't agree with your "no two ways about it" statement. The jobs that you (and John McCain) say are "gone forever" are only gone if we chose to allow it. As evidence, I return again to history. At the start of the industrialization of the US, Britain, was able to produce goods more cheaply than the US. Not because of cheaper labor at that time, but because of better infrastructure and technology. The US enacted tariffs. The sky didn't fall Manufacturing developed here. Japan accomplished the same thing by the same technique in far more recent times.
Another OWS idiot who needs to use fould language to express his point. That usually means the "poin of it" is useless and empty in meaning. Typical "Life isn't what I wanted it to be" whiner!
Tell me, son, why are you so mad?
You fucking dumbbell...you really wrote... "..jobs can be completely make work projects. One guy can dig a hole in the ground and another guy can fill it up"..
How about this.
One guy can shoot you in the head. and the other guy can bury you. That;'s a good "make work" job
I think you are disturbed.
If the government creates a job, that is a government job. It still takes tax payer money to fund. Is everyone going to work for the government? What then? Can you not see how this line of thinking makes absolutely no sense?
These are not meant to be permanent jobs. These are meant to be temporary jobs which inject massive amounts of cash in the economy directly and not through loans and thus jump start demand which in turn creates other jobs.
The are also jobs that will help rebuild our infrastructure which is dire need of repair.
Our highways are in terrible shape, bridges have collapsed and the cost in life and finance has been huge, many of our public buildings are crumbling for lack of proper maintenance.
It amazes me that a football or baseball team can threaten to move and a state will overwhelmingly vote to build a new multi-million dollar stadium, with it's attending increase in taxes yet when funds are asked for a new school, or to repair an old one there is a hew and cry 'too much taxation'.
I don't know about anyone else, but I LIKE having national parks, I like our highway system (I also use it regularly even though less than I have in the past), I LIKE the concept that our rivers and lakes will be clean (reference the Lake Michigan clean up several years ago) and I am willing to put my share of dollars into these projects.
The Vietnam Memorial was a public works project, the State Capitol buildings are public works projects, the Lincoln Memorial was a public works project.
The nice part about public works projects is the after flow. Highways will need maintenance, buildings need it, parks need it...and meantime funds are injected into the fluid economy...people begin buying products again, this insures manufacturing a market thus the need for hiring workers, which leads to more management.
This is just the simple effects of such projects, temporary as they may be.
Vladimir, you may not be 'all for one and one for all' about OWS, yet it has given you a platform to express your views over a wide base.
I am fully in agreement about the public works projects, but they take a while to start up. Hence my suggestion of make work jobs. There are some jobs that cannot be offshored. Construction is one such sector. Instead of calling for tariffs to increase manufacturing wages to $90/hour as in the golden days of the UAW, people should ask the govt to start massive construction projects.
That takes time too...but the knowing that something positive is being done would go a long way to help people at least feel that the government is being responsive.
Look, when the middle class clamors for blood instead of jobs, and wants fiscal responsibility instead of massive deficit spending, the Govt is not going to create jobs. It is going to make tough statements about the banks while balancing the budget. That's why I think OWS is totally barking up the wrong tree. Fuck the bankers. So what if they make more money. They will always make more money. Instead of trying to pull them down, why not march in DC and only in DC asking for MASSIVE deficit funding to create ditch digging jobs all over the country. Hell, I am OK with just dropping money from helicopters. What do you think would happen if all Americans were given a $100k to spend, with a time limit of a month to spend completely, and no money could be saved or used to pay down debt. That's $30 trillion of paper money created out of nowhere which will cause massive inflation in a matter of days and the economy will get back on track.
I usually don't deal with the shoulda, coulda, woulda line of thought, it's unproductive.
As for the OWS, it's my (unfounded) thought that it's a subscription to the old adage, 'hit them were it hurts', which in this case is the 'visible' money center.
As for making 'demands', first there has to be someone to hear them. So gaining attention is first on the agenda. Then comes the initial offer, when dong the asking portion, asking for more than can be expected to get is always the starting point (horse trading 101). Adding in a few extras that can be dropped along the way is always a good idea too.
If one reads enough it becomes obvious that it isn't so much HOW much banks are being paid but rather the methods used to gain that payment...on the other side is how those methods were able to become common practice.
As for a march on DC I do believe one is planned for some time in the next week or so, but I could be wrong...
But it produces no private goods.
No need for that. The workers are going to spend the cash, and that will create demand for private goods. What we need right now is inflation.