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65 Responses to “Bill Mitchell’s most excellent (long) post”
And Warren’s most excellent comment on Bill’s most excellent post
At one of Mario and Marcs ‘post Canadian’ conferences, I decided to rename my talk at the last minute calling it something like ‘maximizing price stability in a market economy’ and went on to show how price stability is always via some form of buffer stock or another, and how the most stable and the deepest, most liquid ‘commodity’ gives the best results, with unskilled labor being the most stable, deepest and most liquid, etc. concluding that price stability is maximized with a jg policy. And (jesting) that you just have to accept full employment as a side effect.
I waded through that post but I’m not sure I got it all. He is really, make that really, in favor of the JG to solve all kinds of problems. I see Randall Wray also had a post on the subject. But there seemed to be an awful lot of push back on the idea. One of them sounded right. How do you hire anyone to build roads when you need skills to operate the machinery and even if you did, once they get a real job the road building comes to full stop. So that line doesn’t work. But there are likely many more things they could do. Worth a try, I doubt it will happen though.
I think you guys missed something while reading Bill Mitchell’s post. He expressed skepticism towards “infrastructure, infrastructure” cries and suggested what he thought was a better way. His Job Guarantee does not rely on infrastructure spending per se.
There needs to be some type of response program/team for natural disasters such as when a tornado devastated Joplin, MI. A lot of people were needed for cleanup and care for the area after the tornado and a force could have easily been mobilized with the National Guard being the manager of that force.
The skill set of today’s unemployed is very different and also the fact of where those skills are in regards to the skills of the average CCC program worker. The unskilled and uneducated, unemployed do have the basic skills to accomplish large projects, but the more skilled and defineitely more educated do not. If anyone has ever participated on a Habitat For Humanity project, about 5-8% of the volunteer workforce posess the needed skills to actually contribute any labor.
David Listokin at the Center for Urban Policy at Rutgers has done various calculations on the impact of public works projects. He has noted the areas that would have the larger economic effect considering our aging infrastructure and existing systems. I will try to find a post an applicable link to some of his work.
Aside from the MMT economists do we have any politicians that can push the idea of the JG? So a 300 page book is nice to have but it needs to be flushed out and talked about in specific terms and in forums where they will be challenged, like what I saw on Randall Wray’s blog. I’m new to this and other than the WPA, never heard about it in recent times. I venture to say most people not on these blogs are familiar with it either. ( meantime I’ll try to wade thrugh that 300 page report.)
I’ve been trying to formulate a bottom up plan of the JG for my local voluntary sector that does all those things including a new/complementary currency but as we all note getting that currency accepted is the difficult part. The only way I see that working is along the lines of the Brixton Pound (http://en.wikipedia.org/wiki/Brixton_pound#Brixton_Pound) – whatever your new currency it has to be convertible into current currency to gain acceptance.
Again the trouble with that is given it is convertible rather than non-convertible, it will only be viewed as a surrogate for current currency.
Ideally I would like what I’m trying to think of start in the voluntary sector, scale up to the local unemployed sector etc. It is not too difficult (but still difficult) to do it for one sector but to make it scaleable without changing anything is another story.
I haven’t worked anything out yet. And of course I realise the funding of a Federal JG is top-down but if we can show it working – the more success it is likely to have politically.
In summary the UMKC buckaroo currency for the volunteer sector that scales up to the unemployment sector.
I assume the report Scott is referring to at Michell’s blog is this one:
“Creating effective local labour markets:
a new framework for regional employment policy.”
It is lengthy but it has tons of ideas on how such a program should work. I have not waded through it yet, but it does make one think there is more than a little meat to it. Now if we can get some politico to buy into it….. ( now I think I am dreaming. )
I don’t support the hiring or rehiring of all government employees because many of the positions are simply revenue generators/distributors or business inhibition positions. Locally they would hire more people to hand out parking tickets, garbage tickets etc
OK, let me put this more clearly. Given all the push back against the JG even by people that consider themselves to be MMT proponents, there is a problem here. If even many of the people that are on board with MMT don’t support the JG, where is it going politically?
MMT economists assert that they they have done their part in providing what people say they are missing. However, this resides in academic papers for the most part and a few sporadic blogs. A single coherent, popular, convincing argument seems to be lacking. This argument has to be very detailed, answering all probable questions and anticipating all objections insofar as possible. This would require an MMT explanation as to why this would not be redistribution of wealth from the middle class to the poor. It’s really ordinary US workers that oppose these kinds of programs, which they see as wasteful, rewarding indigence, and costing them through higher taxation since a great deal of propaganda has been sewn to this effect for decades.
It looks to me like what is needed is a popular book on the JG and the rationale behind it, written more as a policy proposal and put forward rhetorically as well as logical to persuade readers that this is the most efficient and effective way to proceed with an otherwise intractable problem that is resulting in enormous waste.
This would ideally be undertaken by a professional writer who has a good grasp of economics and politics rather than academic economists who are not trained in this kind of writing. Of course, all claims would have to be documented with reference to the literature, but that would have to be submerged so as not to interfere with the popularity of the presentation. Then this book has to be promoted in such as way that creates a media buzz and ideally hits the best seller list in its genre.
If this kind of public relations approach is not adopted, forget about it unless and until a progressive enough government to be able to pass such legislation is elected sometime in the future.
7DIF was well written and seemed to come from an apolitical direction. Can we get a hold of that writer?
In all seriousness, as a non-academic, non-political, non-elite, struggling for the legal tender layperson, I would be willing to read and help edit anything written by you in-the-trenches MMTers and give my opinion from a man on the streets perspective. It’s taken a while, but I can now get thru a Billyblog (but not Scott Fullwiler) in one sitting. I’ve become familiar with with Randy, Bill Black, Mike Norman, Stephanie, Cullen, Jamie G.,Marshal, et. al. (and you) in the last two years or so. Just throwing it out there.
Happy New Year to all! Here’s to the MMT word going viral in 2012!
Sometimes I think we get too caught up in hypotheticals and don’t trust the theoretical insights we should have learned.
Arguing about what type of government jobs there should be in a JG is like arguing who will buy government debt if the primary dealers go on strike.
If the government sets price with unlimited supply for labor, we should expect that private demand for labor will increase (as aggregate demand increases), and the JG will act as the labor buffer stock for which it was designed.
What exactly the jobs entail is somewhat irrelvant. The JG should be designed to be flexible to respond to local conditions, where the labor is deployed. Sure, for political reasons you need some specifics, how about starting with the often cited need for improving education contrasted with the decimation of our educational system in the US?
Finding meaningful work that can’t be monetized by the private sector is not that difficult.
The debate over whether JG should be part of MMT is not the way to look at things .
Rather any economic approach that can make the JG work should be taken seriously .
JG is the holy grail and not how money functions .