Debate

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16 responses to “Debate”

1. 

   Emery

   January 20, 2014

   What frustrates me about current politics (American politics, anyway) is that the right believes higher growth and a weaker safety net are correlated when I don’t think there’s any evidence of that, while the left resolutely defends labor policies and stands in the way of reform (education, for one, but other government bureaucracies, too) which inhibits the growth needed to pay for the safety net and which in and of itself does more to reduce inequality than any fat cat tax. I dream of a day when the right campaigns to reform the safety net rather than reduce it, because that is what will create the most wealth, and the left campaigns for high growth through greater productivity and a broader safety net, because that is what will help the poor most. Today we have rich people calling for tax cuts on the right, and public sector employees fighting reform to protect their privileges on the left. There is a lot of public enlightenment that needs to happen before politicians even start talking about the right topics in the US. Once again, some of the more interesting experiments on better government are happening in northern Europe, although none of them have all the answers.

2. 

   Mitch Berg

   January 20, 2014

   What frustrates me about current politics (American politics, anyway) is that the right believes higher growth and a weaker safety net are correlated when I don’t think there’s any evidence of that,

   Borderline strawman. “The right” doesn’t believe that, in and of itself. We note, correctly, that productivity absorbed by government is usually wasted.

3. 

   Mitch Berg

   January 20, 2014

   I dream of a day when the right campaigns to reform the safety net rather than reduce it, because that is what will create the most wealth,

   We did. The right pushed hard to implement Tommy Thompson’s welfare reforms nationwide in the nineties. Clinton actually co-opted some of the reforms as part of his triangulation after 1994. It was successful, although both too little and obsoleted by bloat since 2000.

4. 

   Mitch Berg

   January 20, 2014

   There is a lot of public enlightenment that needs to happen before politicians even start talking about the right topics in the US.

   Politicians can’t, under any circumstances, “talk about the right topics”; politics is the single least effective way to allocate resources that could be invented.

   Much more on this coming up, most likely next week.

   Once again, some of the more interesting experiments on better government are happening in northern Europe, although none of them have all the answers.

   True, within some fairly draconian limits.

5. 

   Emery

   January 20, 2014

   There is a supply side economic idea that low taxes on capital encourages investment that generates more growth, which helps the poor (by generating jobs) more than any of the social welfare programs that higher taxes might support.There are economists which help make the case that growth is, in fact, an important part of fighting inequality. Because rich world growth in the 21st century will be due to productivity gains rather than population gains, governments should do all they can to enhance productivity growth, including making hiring and firing easy, and fighting unions that wish to prevent reform and decrease the flexibility of a work force.

   What there is very little evidence for is that there is a shortage of capital to invest in productivity and growth, and that low taxes on capital significantly increases capital and therefore growth. Higher taxes on capital and the rents from capital to pay for both low business taxes and comprehensive social services for a flexible, productive 21st century workforce seem to be the optimal solution. If you’re going to have a democracy where capitalists have a flexible, highly skilled, low cost labor force to use as they need, those capitalists are going to have to invest heavily in health care, elder care, education/training, and some form of unemployment insurance. Whether those services are best delivered by monolithic national monopolies is a very separate question, but the social safety net itself is clearly essential to sustaining an efficient 21st century economy.

6. 

   Mitch Berg

   January 20, 2014

   What there is very little evidence for is that there is a shortage of capital to invest in productivity and growth,

   Actually, at the moment there is an avalanche of evidence of this; corporations are sitting on all the cash they can find. It’s why the Dow is so high, even though there is so little activity.

7. 

   Mitch Berg

   January 20, 2014

   Higher taxes on capital and the rents from capital to pay for both low business taxes and comprehensive social services for a flexible, productive 21st century workforce seem to be the optimal solution.

   Let me ask you this – and please don’t take my tone as being snotty, per se.

   But why do you think government is well-placed to “create” a “flexible, productive” workforce?

8. 

   Emery

   January 20, 2014

   Oh, absolutely. There are high paying jobs available for somebody with moderate intelligence willing to complete 1-2 years of training post-secondary. We are chronically short of good instrument technicians at my plant, electricians of all sorts, skilled machinists, welders, any job where somebody must commit to a course of training or an apprenticeship. Not so much pipe-fitters, and certainly not general labor, but any job where there is a substantial body of training to be completed, there is a shortage of good talent. The same applies with nurses and lab technicians; the more training is required, the greater the shortage is.

   Is this a market failure? Are people ill-informed as to where there are jobs available, or are people just so short–termist or lacking in working capital that they are unwilling to commit to a program of training lasting 12-24 months?

   Rather than giving tax breaks to individual factories, a state government would do more to attract and keep manufacturers by promoting some kind of state sponsored apprenticeship program, actively recruiting high schoolers, providing low cost loans for the training, and acting as a clearing house for skilled tradesman and their employers. I’ve always envied the Germans their apprenticeship programs in many skilled trades which are integrated into the education of 16-18 year olds.

9. 

   Powhatan Mingo

   January 21, 2014

   In your last paragraph you describe what Minnesota does.
   These are not new ideas, Emery.
   A major issue is that small-d democratic politics is crappy at allocating resources in an efficient manner.
   Non-democratically driven resource allocation by government is crappy as well.
   It is worthwhile to remember that in Victorian England, for all its poor-houses and its slums and inequality, there was, essentially, full employment.

10. 

    Powhatan Mingo

    January 21, 2014

    To put it another way –
    If there was a shortage of chicken-pluckers, classical economics says that the wages for chicken-pluckers would rise, more people would take up the trade of chicken-plucking until the market reached equilibrium. Problem solved. Why does this not seem to be working for the skilled and semi-skilled jobs you describe, Emery?
    Keynes had ideas about why you could have shortages of certain types of labor, namely unions that restricted the labor supply, but we don’t have unions anymore.

11. 

    Emery

    January 21, 2014

    I like to look back a century ago when mechanization was making smallholder farms uneconomic and thus causing a large fraction of the workforce to be underemployed. John Steinbeck’s “The Grapes of Wrath” eloquently expresses the anger that the people felt as their lives were overturned and they fell from being working poor (basically peasants) to being destitute. The youngest of these underemployed workers had the flexibility to move to cities and learn to work in manufacturing. The older farm workers chased a dwindling number of jobs, always falling further behind. These transitions have happened several times as the industrial revolution went through its phases, and we are hitting another one now.

    The lesson is that when we hit one of these big transitions, there will be a big group of economic losers who will lose their economic usefulness and never regain it. Their children will be able to find useful work if they adapt well enough, but not the middle-aged. Their loss of economic usefulness will be reflected in lower median wages and wealth and a smaller share of profits going to labor. Governments will need to care for these angry and frustrated citizens, but they are likely to not regain their earning power. This suggests the need for a strong social safety net.

    The faster the transition happens, the shorter the pain. Do nothing to impede investment, even if it will result in job loss. Do nothing to impede trade. Whoever makes it through the transition first wins the next century, so open the economy. Speed and pain now will lead to prosperity later.

    We have some clues as to how the new economy will look. We will need a lot of people who will supervise, train, and maintain robots. These will not be engineering jobs, these will be blue collar jobs. We need trade schools opening to teach this now. We will need a lot of people who will work with intelligent databases. These will not be engineering jobs, these will be tomorrow’s clerical work. We need people learning not so much how to do accounting, but how to work with a computer that does most of the accounting. Other areas sure to need more workers are ecology management, the energy business in all its facets, and elder care.

    This is not all bad news. The Joads in “The Grapes of Wrath” were sharecroppers who lived on the brink of hunger, worked 6.5 long days a week, and died young with broken bodies. That was the life they were trying to preserve. We know the next generation lived much better. Agricultural mechanization decimated agricultural employment as it banished hunger from the rich world. The current economy is losing manufacturing jobs, but the next generation will have manufactured goods so cheap that they will be as ubiquitous as our plentiful food. People with too much stuff will be as common as overweight people today.

    Will there be jobs for everyone? Almost certainly, eventually. Almost certainly because with each of the previous transitions people have worried about work disappearing, and those worries proved misplaced. Eventually, because it will take time for the future to unfold, and some of today’s jobs will certainly disappear.

12. 

    Powhatan Mingo

    January 21, 2014

    “Almost certainly because with each of the previous transitions people have worried about work disappearing, and those worries proved misplaced.”
    Manufacturing jobs haven’t been replaced. They’ve disappeared.
    Nothing is always and everywhere good. Investment isn’t. Hi growth isn’t. Free trade isn’t. Open immigration isn’t.

13. 

    Emery

    January 21, 2014

    Getting back on track.

    /This year, Seifert said, grassroots Republicans are hungry for a win and less concerned about ideological purity./ I hope this is true

    Marty Seifert (most electable) gets my vote.

14. 

    justplainangry

    January 21, 2014

    If you ever wondered what EmeryTheUSAHater sounds like on crack, this thread is it.

15. 

    Powhatan Mingo

    January 21, 2014

    Emery proposes open immigration and a generous social safety net. That is kind of crack-ish. I’d like to find a place like that to retire to. Instead of needing a million bucks in my 401K, hell, I could retire now.

16. 

    Emery

    January 21, 2014

    Yooz two “crack” me up!
    One of the reasons Libertarians and Tea Party types will never form a potent political force is their holier-than-thou one-upmanship when they compare just how libertarian or conservative their views are. It’s like watching a bunch of vegans, another hilariously dogmatic group. Please don’t tell me how you’re more chaste and pure than others. I don’t care.

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