Bill Mitchell’s most excellent (long) post

http://bilbo.economicoutlook.net/blog/?p=17528

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65 Responses to Bill Mitchell’s most excellent (long) post

  1. Walid M says:

    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 .

    Reply

  2. pebird says:

    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.

    Reply

    WARREN MOSLER Reply:

    I’d put the Fed in charge of the JG as its primary function is price stability,
    and then let the fed be responsible for getting useful output from those in the transition jobs,
    and keeping them ‘shovel ready’ to be hired by the private sector.

    Reply

    Robert Kelly Reply:

    @WARREN MOSLER, How would that work with Congress and it’s role in appropriations?

    Reply

    WARREN MOSLER Reply:

    Congress would task the Fed. And with the Fed doing the spending it would reduce the funds the fed turns over to the tsy at year end.

    beowulf Reply:

    @Robert Kelly,
    The spending would have to be at the state level. Not sure how Fed could fund it except by creating a 13(3) facility to lend the money to states at 0 interest.
    Obama’s ill-fated American Jobs Act from last fall was a pretty remarkable bill (its wage insurance and work-sharing programs were pretty innovate) that included a embryonic Jobs Guarantee program called “Bridge to Work”. It was funded out of Unemployment Benefits so it was limited to unemployment recipients (most of the unemployed don’t qualify for benefits) and to private employers (vs govt jobs), but if one wanted to create a Jobs Guarantee/Workfare program, Bridge to Work is your jumping off point.
    SEC. 324. BRIDGE TO WORK PROGRAM
    …In order to increase individuals’ opportunities to move to permanent employment, a State may establish a Bridge to Work program to provide an EUC claimant with short-term work experience placements with an eligible employer…

    http://www.scribd.com/doc/64723281/American-Jobs-Act

    Personally, I’d back the Fed into fiscal policy by Congress mandating the following:
    1. The Fed levy a bank transaction fee on (at a uniform percentage of value) on everything — wire transfer, securities clearing, check cashing, etc. Edgar Feige’s APT tax on FRS payments, in other words.
    2. The Fed rebate to Tsy annually a sum equal to net interest (inclusive of current Fed rebate) and trade deficit (so a rebate of approx $800B in 2011). The Fed rebate is currently added on-budget by Tsy as “miscellaneous receipts” and so it should continue.
    3. The Fed governors would have complete discretion to set transaction fee at any positive rate. So Congress would be indifferent whether rate was 1.0% or 0.0001%, Tsy rebate is due regardless and would reduce the budget deficit by the same amount.

    Whatever rate the Fed set would determine if the Tsy rebate was $800B to $0 (or even a negative sum) of fiscal stimulus. The Tsy rebate could be paid by any combination of fee revenue, proceeds from Fed CD sales (TDF facility) or the magic asterisk which is “negative capital” (account for Fed losses which are attributed to Tsy; the operational equivalent of loading debt onto rocket and then shot into the Sun).

  3. Mario says:

    Rogue Economist is chiming in on the JG as well by attempting to find “middle ground” between the non-JG’ers and the more “pure” MMT-ers.

    perhaps go take a look at what’s he saying….namely he agrees with a JG…just not a permanent one.

    http://rogueeconomistrants.blogspot.com/2011/12/keeping-jg-during-boom-and-private.html

    Reply

    WARREN MOSLER Reply:

    there will always be a buffer stock. it’s a matter of ‘pick one’

    Reply

    Matt Franko Reply:

    @WARREN MOSLER, But Warren what if they don’t pick one?

    To me they have not “picked one”, they dont even know what is going on in all of this. We have to be operating in some sort of a “default mode” or “failure mode”.

    What is the “default mode” of a FFNC system in which no buffer has been included in the design? And correspondingly no “buffer stock” has been selected and priced? Does it logically default automatically to a “buffer” of people with a $0 value?

    Resp,

    Reply

    WARREN MOSLER Reply:

    yes, they’ve picked ‘unemployment’ as their buffer stock and price anchor, as you say, by default.

  4. Robert Kelly says:

    @Tom Hickey,
    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!

    Reply

    Tom Hickey Reply:

    @Robert Kelly,

    I’ve already implored Warren for a sequel. Maybe if we all lobby him harder.

    Reply

    WARREN MOSLER Reply:

    the 7dif was the sequel to Soft Currency Economic ;)

    Reply

    WARREN MOSLER Reply:

    thanks, and much appreciated!

    Reply

  5. Tom Hickey says:

    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.

    Reply

    Robert Kelly Reply:

    @Tom Hickey,
    How about Matt Taibbi? Anyone know him? He seems to be on board from what I’ve read in Rolling Stone, etc.

    Reply

    Tom Hickey Reply:

    @Robert Kelly,

    Matt would be great if he could be enlisted in the cause, but he comes with a pretty sharp left edge. It would be better to have a more moderate approach that could appeal to more of a popular demographic.

    Reply

    jonf Reply:

    @Tom Hickey, Indeed. Maybe we will get it in the far future, since our President seems only to know about unemployment around election time or tangentally and the other guys couldn’t care less.

    Reply

    Tom Hickey Reply:

    @jonf,

    There why we need to bring some pressure to bear. They don’t care because the big donors either don’t care are opposed — remember that in the minds of ownership unemployment is a tool for controlling wages and salaries, essentially getting more from workers for less. They like unemployment, and they pay the campaign bills. Also, as Bernie Sanders has been saying, it not only the contributions but the threat of massive funding for a primary challenger if one strays out of the pasture.

    The only thing that politicians fear more than big contributors and that’s angry voters banging on the door with pitchforks.

    Reply

    Talvez... Reply:

    @Tom Hickey,
    These things work in a (somewhat) long term approach. They start to be taught in college and faculties right when the students are too young to perceive the flaws. Those students will ingrain those teachings through memorisation study, until a dogma forms in them. Afterwards, they will join political parties, “think tanks”, etc. with likeminded persons. There, they will reinforce their dogmas mutually.

    But some of them go another way. Some of them don’t study by memorisation – they reflect and they notice something is not right there. In this other group, a seed of doubt was planted.
    Water it, and the seed of doubt will flourish in a tree of a new-found truth. Some of those will end up teaching in colleges themselves, thus breaking the circle and starting a new one.

    Don’t underestimate the power of academics – they are everywhere, they train the elites that will rule the countries. Elites that will take care, themselves, of the details, the rhetoric, the propaganda.
    Or you can reach directly to the people and hope their will is strong enough so that politics get decided from bottom to top (which can occur).

    Reply

    Tom Hickey Reply:

    @Talvez…,

    Agree Talvez. We don’t have time for the old fogies to die off. We have to figure out how to put the pressure on the system for change in way that reflects reality instead of economic fantasy and self-serving propaganda. Great for the MMT economists to be striking at the academy with professional publications, but that’s nowhere near what’s needed to shape events in a more timely fashion. No time to wait of the next generation of economists and hope they turn out better than the previous one.

    Reply

    Talvez... Reply:

    @Tom Hickey,
    That requires a good amount of propaganda, and an aggressive one. More than a book very few will read :P

    Tom Hickey Reply:

    @Tom Hickey,

    Agree, Talvez. I have been saying for some time that there needs to be an agressive PR campaign mounted that is comparable to what we are up against. It’s an incremental process given the numbers. But we are a way ahead of where we were last New Year’s. It’s happening, just not fast enough considering conditions.

    Neil Wilson Reply:

    @Tom Hickey,

    ” If even many of the people that are on board with MMT don’t support the JG, where is it going politically?”

    Without a nominal price anchor the ideas of MMT are potentially destabilising.

    Its utterly vital that we don’t forget how important it is to let malinvestment unwind. Bad investment must die, but it needs to be allowed to die in such a way that sound investment isn’t destroyed along with it.

    We are in this mess because the powers that be were too terrified (or too bought) to allow malinvestment to die.

    Reply

    Hugo Heden Reply:

    @Neil Wilson,

    hm, interesting – haven’t thought of it like that

    Reply

    WARREN MOSLER Reply:

    without a nominal price anchor any currency is chaotic.
    there is always a buffer stock/price anchor with fiat currency.

    Reply

    john f Reply:

    @Tom Hickey, I was thinking of someone like Thom Hartmann. He has a business background and his writing is succinct in getting ideas like this across without being too polemical.

    Reply

  6. Jackson says:

    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

    Reply

  7. jonf says:

    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. )

    Reply

    Neil Wilson Reply:

    @jonf,

    I have put up a Google view of the document for faster viewing (and less load on Bill’s servers).

    “Creating effective local labour markets:
    a new framework for regional employment policy.”

    Reply

  8. Senexx says:

    @Neil & @Scott

    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.

    Reply

  9. jonf says:

    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.)

    Reply

  10. Fredisinmyhead says:

    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.

    Reply

    john f Reply:

    @Fredisinmyhead, There is the existing CERT program that the Bush administration created after 9/11.http://www.citizencorps.gov/cert/

    Reply

  11. Paulie46 says:

    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.

    Reply

    ESM Reply:

    @Paulie46,

    My post wasn’t a response to Bill’s (which I hadn’t actually read until now — he’s a good writer, but it’s very tedious to read the same ideas over and over and over again).

    Of course I agree with Bill on the theory, but I still think he needs to be more specific about what a JG would entail, if only to gain wider acceptance of the idea. He does write:

    “JG workers could participate in many community-based, socially beneficial activities that have intergenerational payoffs, including urban renewal projects, community and personal care, and environmental schemes such as reforestation, sand dune stabilisation, and river valley and erosion control.”

    But that’s not really going to cut it. I think MMT people need to compile a list of specific projects that are scalable (both up and down), useful, easy to administer, and which can be done by people with varying levels of skill and education. I have no doubt that, as Warren likes to say, there is more work that needs to be done than we have people to do, but it is a useful exercise to show it with actual analysis.

    Reply

    Tom Hickey Reply:

    @ESM,

    Agree again. Mirabile dictu!

    As long as the JG is viewed as “redistribution of wealth from the top to the bottom” it won’t fly in the US politically. The case has to be made how it makes the pie bigger for everyone, while accomplishing worthwhile results for the money with controls on “waste, fraud and abuse.” The specifics have to be laid out in detail to get a widespread hearing, or it will just be dismissed by many as another nutty “Keynesian” notion.

    Reply

    Scott Fullwiler Reply:

    @Tom Hickey,

    Have neither you nor ESM seen the several dozens of publications on this issue? These things have been laid out so many times I’m tired of reading them–I just skip over them anymore. Bill even linked to a 300-page report in his post, for heaven’s sake.

    Yes, I suppose there could be more done for mass consumption, if that’s your point. But your comments do not read that way, at least to me.

    Tom Hickey Reply:

    @STF,

    Scott, I am not espousing the conservative position regarding government spending, but simply agreeing that it as an obstacle to ever getting anything like a JG passed in the current political stalemate, which portends to last for some time, there being no end it sight.

    Unless the issue can be framed in a politically practical way, the JG is going nowhere in the US. There just are not the votes in the Senate to overcome a filibuster, even if the Democrats were to take the House back and keep the presidency in ’12.

    This has to be taken from the professional papers and framed in a way to convince enough elected representatives of both parties to bak it and it also has to be disseminated widely through the mainstream media to get enough public support.

    Moreover, as I understand it, the MMT position is different from the infrastructure spending proposals of many others, including many Post Keynesians, in that it holds that to be effective, the income injection has to reach the bottom and the only way that will happen is if it is injected there. It’s not going to trickle down from massive infrastructure spending that will not go to unskilled workers since we no longer use unskilled or semi-skilled workers in construction and repair of highways, bridges, and buildings.

    Not that infrastructure should not be a component of countercyclical stimulus, but it should not be relied on to do what it does not actually do wrt providing jobs and income to ordinary workers who will spend it into the economy quickly instead of saving it. A significant portion of infrastructure spending is profit to the owners that just gets saved.

    As far as cronyism goes wrt to infrastructure spending it may not be too severe in smaller states, but in large states, like New Jersey, it is notorious, where it goes beyond cronyism to outright corruption. The public knows this since it has been at least rumored for decades, and there are plenty of prosecutions that show it is not always just a rumor.

    These are real political obstacles in the way of fiscal policy recommended by MMT and if we don’t overcome those obstacles, then the policy recommendations are going nowhere in the current environment.

    WARREN MOSLER Reply:

    fundamentally, JG isn’t about the ‘income injection’ whatever that means.

    it’s about choices.

    it’s about what your choice is for the buffer stock- gold, unemployment, or JG

    Neil Wilson Reply:

    @ESM,

    “. I think MMT people need to compile a list of specific projects”

    Don’t you have a charity sector in the US. Look up what ‘volunteers’ do in the charity and church sectors. And there you go.

    What JG allows you to do is massively expand your voluntary and charitable support sectors – which by definition are areas where the private sector presence is low to non-existent – otherwise they wouldn’t be charities.

    The volunteer sector already has the skills to handle stop-start employment – since that is what they are used to. What needs to happen is to scale that up and widen its scope.

    My first Job Guarantee training scheme would be volunteer management and deployment.

    Reply

    Scott Fullwiler Reply:

    @Neil Wilson,

    Exactly. I’ve been saying this for some time. Years even.

    And note that there are MANY places in the JG literature that get very specific about what sorts of things could be done. Bill linked to a 300 page report, for instance. So critics should stop saying that and go acutally look for once.

    Finally, remember that the opportunity cost of the JG is involuntary unemployment along with all the social/economic costs that entails–not “productive” work. “Productive work” is the wrong comparison, though I think the JG would be reasonably productive. I’m still waiting for all the critics to ask themselves “what are all the unemployed people going to do?” We already know, of course, and society bears a tremendous cost as a result.

    Fredisinmyhead Reply:

    @Neil Wilson,

    I read one of your comments at the Billy Blog and you mentioned the stand of living costs in regards to the JG wage. The current systems for applying for and tracking unemployment can be used to determine the JG wage depending on the region or locale. This data along with the available skills can be used to determine the wage so as not to compete with current wages.

    One area that needs to be considered is recycling of discarded items such as computers. The private, for-profit prison industry is exploiting prison labor to extract usable resources for re-use in the computer manufacturing/raw resources area. Most munincipalities already have a recycling program in place(or mandated), and this could create a new industry that could benefit from the available resources that are now being discarded, while at the same time create a some demand for convertible labor(from a JG program to private industry).

    Neil Wilson Reply:

    Sorting yoghurt pots from pet bottles (or at the very least refining the output of automatic waste sorting machines) should be on the list. The Japanese have the tech to do plastic recycling at almost a 100% level. So for the rest of the world its a lack of will (and a greater availability of land fill sites!)

    Neil Wilson Reply:

    ‘“Productive work” is the wrong comparison, though I think the JG would be reasonably productive.’

    I would counter that by saying that we don’t want the JG to be too efficient. That lack of efficiency is space for the private sector to make a profit, by hiring the individual and managing them better.

    The JG only needs to be effective as a price and quality anchor for labour. Efficiency is for the private sector to drive once they see what people can do while working on the JG.

    Unforgiven Reply:

    @ESM,

    How about incorporating training programs that allow one to add to their skills or even change careers? Seem you hear companies saying that they don’t have enough skilled candidates as of late. That would help JG workers get hired out of the program more quickly.

    Programs that help to discover/develop latent skills might be worth considering too.

    Reply

    Scott Fullwiler Reply:

    @Unforgiven,

    Yes, I wrote about such a program here . . . http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1838648

    Unforgiven Reply:

    @Scott Fullwiler,

    Checkin’ it out, thanks!

    beowulf Reply:

    @ESM,
    Well, if nothing else it will create all sorts of white collar make-work jobs just to organize and supervise all of these govt/nonprofit projects. :o)
    I’ll give them a head-start, copy the Hands-On Atlanta template.
    http://www.handsonatlanta.org/HOC__Volunteer_Opportunity_Search_Page?p=vct

    Reply

    Scott Fullwiler Reply:

    @beowulf,

    Even easier is to allow existing non-profits to apply to some local authority for funds to employ people at the minimum wage. No need to hire “white collars” at the govt’s expense. When I was on the United Way board, every single agency asking for money without fail said they never had enough volunteers to meet all the needs–how many more might they get if they offered minimum wage to volunteers? And it’s a perfect fit, since the needs non-profits face are countercyclical, just as the JG should be.

    But your suggestion is good, too. There’s no 1 model to follow here.

    WARREN MOSLER Reply:

    then there’s always holding hands at the old age home

    Reply

    WARREN MOSLER Reply:

    right, but not to say he’s against public infrastructure. quite the opposite. the trick is to keep the legislature from using it for crony enrichment

    Reply

    Robert Kelly Reply:

    @WARREN MOSLER,
    See “Big Dig” in Boston. A modern day political Houdini does not exist to pull off such a trick.

    Reply

  12. jonf says:

    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.

    Reply

    ESM Reply:

    @jonf,

    I’ve felt for a long time now that the idea of increasing “investment in roads and bridges” is a cop-out. I’m skeptical that you could find a material number of projects where the benefits outweigh the opportunity costs. It certainly seems like the road-building industry has its hands full, given how long it takes to repave a 1/4 mile stretch of highway.

    I think it would behoove JG supporters, or supporters of increased government spending in general, to come up with more detailed and intelligent examples of things for the government to do.

    For example, I think it makes sense to expand (but modify) Boston’s “The Ride” service, which provides almost free round-trip taxi service to elderly or handicapped people. I would modify it to only give subsidized taxi service to elderly people who agree to give up their driver’s licenses.

    Reply

    jonf Reply:

    @ESM, It does seem like road building these days is something more than a crew with shovels. But there may be other things the JG can do. Those who support it should come up with a list of things and the numbers it could employ. You have one it appears. I’m pretty confident we can do something but at the moment the whole thing sounds like a great theory with no where to go. Still if you are going to pay unemployment insurance, get something in return and let people feel they are contributing. Government these days are keen at helping Wall Street but not so the unemployed. It’s the deficit you know.

    Reply

    kkken530 Reply:

    @jonf, How about giving county commissioners a bunch of workers based on unemployment numbers to do things for the county ??

    Tom Hickey Reply:

    @ESM,

    Agree. The infrastructure thing that many Keynesian propose injects NFA into non-government through fiscal policy but it doesn’t do much for employment since the introduction of heavy machinery. Moreover, public spending like this which is administered regionally or local is notoriously crony-laden. It ends up being a transfer payment to the well-connected instead of being put in workers hands as income to add to effective demand.

    Not saying that we shouldn’t have any infrastructure spending to inject NFA at all, but just that it is not very efficient and is open to abuse. There are plenty of hands on jobs to do locally, such as elder care, that would be more efficient in getting income injected at the bottom, which would be spent locally.

    Reply

    jonf Reply:

    @Tom Hickey, I can buy into the JG idea easily. But I think we, collectively, have to put meat on the bones, what jobs and how many? I think there will be plenty of push back on it, but if we have the detail we just might succeed. Meantime, I still have lots of bridges and roadways around here need fixin. So let’s get that done.

    Dan Kervick Reply:

    @Tom Hickey,

    One thing that was proposed on one of the blogs yesterday, I believe, was that part of the job guarantee could simply involve providing the states with the funds they need to hire back most of the people they have been forced to dismiss over the past three years. Since these are primarily jobs that existed very recently, and for which the material infrastructure and bureaucracy already exists, the bureaucratic overhead and organizational investment shouldn’t be that high.

    There are some lovely state highway rest areas and state parks that have been operational ever since I moved to New Hampshire in 1990, but have been abandoned and are now falling into weed and ruin. It makes me sick to see that kind of neglect and decline. No heavy machinery or extensive training required. Just hammers, nails, paint, weed-whackers and lawn-mowers.

    Since the MMT job guarantee proposal is for the federal government to set the wage, couldn’t we ramp up a very simple system soon in which the states hire people up through the same offices that hired them before, but the paychecks check comes from the federal government a the federal wage?

    I recall reading some statistics earlier this year which showed that the drop in state and local government employment was a *huge* proportion of the job losses in the recession.

    WARREN MOSLER Reply:

    and, of course, make that fiscal adjustment to keep the jg pool to a minimum

    Reply

    Jim Thomson Reply:

    @jonf, They can clean all the bird do do off our public buildings in Washington, DC, so we don’t look like a pig sty to all our foreign guests, and domestic guests, as well. When that’s done they could start on all the other public buildings across the country. I can’t believe that state and local officials would love to have crews to address all sorts of local projects. And the size of the crews would clearly fluctuate, so what.

    Reply

    WARREN MOSLER Reply:

    using unemployed as a buffer stock creates heaps of problems that switching to an employed buffer stock obviates.

    or, why would a govt tax enough to create 10 million unemployed when it only wanted to hire 8 million of them, etc?

    Reply

  13. Neil Wilson says:

    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.

    Reply

    WARREN MOSLER Reply:

    thanks!

    Reply

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