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Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●Austerity is the government’s method for widening the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive, and the motive is the Gap.
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Regular readers of this blog know I believe Modern Monetary Theory (MMT)to be an excellent, perhaps only, accurate description of financial reality and the differences between Monetarily Sovereign and monetarily non-sovereign finances.
However, when MMT begins making recommendations, presumably based on these differences, it sometimes gets into a bit of trouble. Specifically, its Jobs Guarantee (JG, formerly Employer of Last Resort) departs from reality and drifts into wishful, academic dreaming.
You can read Why Modern Monetary Theory’s Employer of Last Resort is a bad idea and MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” to see some of my many, many objections to this program.
Now comes the blog, naked capitalism, with the article titled, “The Rise of Bullshit Jobs.” The article quotes from other contradicting authors.
But the following quotes constitute the gist:
Back in the early-1930s, renowned economist, John Maynard Keynes, predicted that technical innovations and rising productivity would mean that advanced country workers would be able to work only 15 hours and still enjoy rising living standards.
David Graeber asks why Keynes’ prophecy has not come true and instead we find ourselves working a range of meaningless “bullshit jobs” that many of us hate:
Technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless.
The number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically (while) “professional, managerial, clerical, sales, and service workers” tripled.”
Productive jobs have, just as predicted, been largely automated away.
But rather than allowing a massive reduction of working hours, we have seen the . . . creation of whole new industries . . . what I propose to call “bullshit jobs.”
It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working.
The idea that the lower classes needed to be kept busy for their own sake was presented in moralistic terms but was in fact ruthlessly economic.
Historically . . .the whole point of making the peasants work . . . was to enable them to be exploited by the newly-emerging entrepreneurial class.
And there it is. The rich have brainwashed the not-rich into believing that labor itself, even pointless labor, is ethically superior, and that people accepting “freebies” from the government are moral cripples, to be despised.
Anyone proposing increases for unemployment compensation, food stamps and other aids to the poor, receives sneering and angry diatribes about lazy, good-for-nothing sloths.
So indoctrinated are the commoners, they believe it is far better to live modestly and labor for scant money, than to live like billionaires and receive money for scant labor.
Remarkably, they become hostile to anyone suggesting that the goal of government should be to improve their lives, not merely to give them work.
Does this mean that the regal likes of Bill Gates, Warren Buffett, Larry Ellison, the Koch brothers, the Waltons, and all those other billionaires, whose primary “work” consists bending over to allow for sycophant butt kissing — does it mean these royalty feel inferior and immoral for not digging ditches?
One thing that the historical record makes obviously clear is that Adam Smith and his laissez-faire buddies were a bunch of closet-case statists, who needed brutal government policies to whip the English peasantry into a good capitalistic workforce willing to accept wage slavery.
Historian Michael Perelman outlined the many different policies through which peasants were forced off the land—from the enactment of so-called Game Laws that prohibited peasants from hunting, to the destruction of the peasant productivity by fencing the commons into smaller lots.
Read of Adam Smith’s proto-capitalist colleagues complaining and whining about how peasants are too independent and comfortable to be properly exploited, and trying to figure out how to force them to accept a life of wage slavery.
“The possession of a cow or two, with a hog, and a few geese, naturally exalts the peasant. . . . In sauntering after his cattle, he acquires a habit of indolence. Quarter, half, and occasionally whole days, are imperceptibly lost. Day labour becomes disgusting; the aversion in- creases by indulgence. And at length the sale of a half-fed calf, or hog, furnishes the means of adding intemperance to idleness.”
Note the words used to describe peasants who do not work hard — “indolence,” “days lost,” “indulgence,” “intemperance” and “idleness” — words seldom used when describing political or capitalistic royalty.
Thus, by acquiescing to the belief that being beasts of burden is exalting, they live as beasts of burden, and resent those who do not. They say, “If I have to work, he should too,” completely neglecting the reality that today’s technology should allow them to work less, while living better.
MMT’s JG is built to provide “bullshit jobs” at minimum wages, which tell the peasants to hold their heads up high for doing such work. How a “bullshit” job accomplishes this is not readily explained, except that supposedly, it is the sweat labor in of itself that is ennobling.
The MMT people are good people and they are smart people, but they have bought into the “labor = godliness,” “ant vs. grasshopper” myths provided by the rich, and cannot imagine a world where the goal is not work, but life.
So they bang on, telling themselves and anyone who will listen, how much they love working, and everyone else should love it, too (while they look forward to weekends and vacations and retirement, where they can live the way the rich people do).
Sorry, MMT. Don’t show Americans how they can work more, for less. Show Americans how they can work less, for more.
Rodger Malcolm Mitchell
Monetary Sovereignty
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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually. (Refer to this.)
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
THE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.
#MONETARYSOVEREIGNTY
#Monetary Sovereignty - Mitchell 
No doubt there are some people who could stop working, and nobody would notice. However, to live like rich people do you need not the money, but the stuff that rich people have. That stuff comes from people working. If we all stop working, and try to live like rich people, where will the stuff come from?
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golfer,
I expect more from you than to use the “if everyone did this” argument — along with the extreme “If we all stop working.”
You can do better. Read the article, again, including the last line.
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You’re right, I exaggerate.
How do we get more from working less? More money doesn’t make more stuff. More work (or more efficient work, but that’s a technology problem not an economic problem and we’re already making progress on that every day) makes more stuff.
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“Bullshit” jobs don’t make more stuff. They just make more work. Dig a hole; fill it in.
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Yes, but how do we get more stuff from less work?
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Since millions of people are engaged in the above-mentioned “bullshit” dig-hole: fill-hole jobs, would you settle for the same amount of real productivity from less work?
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No. With a constantly increasing population, and the desire to meet the needs of the many who haven’t enough, we need more stuff, and will need more each year than the last. And that’s just the US. To bring the rest of the world to the same standard of living as the poor in America, we need lots more stuff.
Are you saying that “professional, managerial, clerical, sales, and service workers” are the ones digging and filling holes? I expect that their employers would disagree. Big companies are not at all reluctant to lay off workers who are not contributing to profits.
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And if you don’t have that answer, what makes you think that MMT or anyone else should be able to provide it?
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Jeez, gofer. It was a rhetorical question. Get serious.
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Depends on what you consider a “bullshit job.” Humans are given brains. What we don’t use, we lose.
If your job is one that requires little mental ability, or leads nowhere, or is compensated very little, or has little benefit to the world — if it has any of those characteristics — I’d call it a bullshit job.
Many people are stuck in the mindless, useless, daily drudgery of bullshit jobs. They have jobs because they work cheaper than a machine.
“Welcome to Walmart.”
“Sir, shall I make me 1,000 copies of this?”
“How soon can I go on coffee break?”
“Thank you for calling; how may I direct your call?”
“Take me to 5th Street.”
“Be careful carrying my furniture.”
“Look busy.”
Those are the jobs JG would have to provide.
Do you have a bullshit job?
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No, I’m retired. No more bullshit.
So, if a job pays little and contributes little to society, even if it makes maximum utilization of someone’s skills and mental abilities, and contributes to the employer’s profit, (s)he should not do it. If a machine can do it, switch to the machine at higher cost. Or else society just does without. Is that your plan? Sure, you can give that person money, more than they could earn on their own, and make them happy. But who will create the goods and services that person will want to buy, if somebody else doesn’t do more work to create them?
Even if working less doesn’t reduce output, because companies are foolishly paying employees they don’t really need, your 10 steps are going to increase demand. Where will the supply come from if there are not more people working, doing more work?
Walmart doesn’t hire greeters out of the goodness of their hearts. Greeters contribute to Walmart’s bottom line. JG workers will not be Walmart greeters.
JG workers would do jobs that make substantive positive contributions to society, but for which society can’t find a way to pay. Like working at the food bank, or building houses for the poor. Those jobs already exist, but are going unfilled because they don’t pay any wages.
JG workers won’t be doing jobs that private enterprise (or government) is already paying people to do. More of those jobs can be created by a simple tax cut, you don’t need a new program for them. You need a new program to hire the last few (million) workers that can’t be employed in the marketplace without causing unacceptably high inflation rates.
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Your position is understood:
That sound about right?
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“That sound about right?”
No, not at all. Nobody will quit any jobs. We will still make the same amount of stuff as before … UNLESS PEOPLE DO MORE WORK.
Companies don’t create machines the way government creates money. To make machines, PEOPLE HAVE TO WORK.
I have answered your questions many times.
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Do “more” work? I hope you’re not talking about a 50 hour week.
Anyway, perhaps you can help Mike Wright respond to the comment numbered #9.
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Not more work per person. This is MACROeconomics. More people working.
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Yes indeed, a big oops there. Yes, g1j is way too intelligent to mimic LMAO.
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Roger, I tolerate a lot of your anti-‘those MMT folks’ rhetoric, and your general ignorance of everything economics *except* the basic principle of monetary sovereignty, but your anti-JG tirades are where I draw a line.
Your criticisms of the JG are grossly mis(/mal)informed, ignorant of the robust array of literature on the subject, and utterly devoid of any recognition of the political and cultural context in which the program would exist, in America.
You seem to propose that MMT not only try to change everyone’s minds about how money works, and thus how to best use it for the common good (an already supremely daunting task), but you also want us (us, not you, because you’re not helping) to pick a fight over WHETHER OUR ECONOMY WILL BE BASED ON EMPLOYMENT AT ALL.
For what it’s worth, I AGREE WITH THE GOAL of what I call ‘maximum leisure,’ as opposed to full or maximum employment, but this is an incredibly long-term goal (approaching utopianism, it’s so far off), and widespread adoption & acceptance of MMT is a prerequisite to achieving that goal.
You, sir, have not merely placed the cart before the horse, but you’re trying to convince others to build a hovercar from scratch (with no blueprints) before anybody’s ever even heard of horses.
And this, of course, is not to mention all the ways that your criticisms of the JG itself are negligently (and clearly willfully) ignorant of the thousands of pages of published research on the subject.
I appreciate that you talk a lot about ‘the gap,’ and economic inequality generally, and the impact those things have on the proper functioning of our democratic systems. I don’t appreciate that you overextend yourself far beyond your own understanding of economics, nor your willfully ignorant criticisms of a very well-fleshed-out policy proposal.
And don’t even get me started on your ridiculous idea to get rid of the MOST progressive taxation system in the country (the Federal individual income tax, which you don’t single out, but is implicit in your proposal to eliminate *all* Federal taxation), and allow it to be fully replaced with the typically-very-regressive systems of taxation commonly deployed by state governments. You preach economic equality (or reduction of inequality), but then you enthusiastically advocate for what would likely be the most regressive tax policy change in American history.
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It appears you went way beyond, “don’t get me started.” I missed the MS blog post(s) on the necessity of implementing regressive taxation at the federal level. Please enlighten me. I don’t remember RMM saying anything more than federal taxes are not necessary to fund government. (See 10 steps above, #6-8).However, I always appreciate a good rant. In closing-the JG will never happen.
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Actually, I’ve read quite a lot of the literature. After some of the reading, I wrote this. You should read it.
When I’ve asked those questions of JG supporters, I’ve received contradictory answers (One of my complaints about JG). Apparently there are not one, but many, ill-considered versions of JG.
Actually, JG is less an economics program than a business program, and if there is one thing I do know, it’s business. I spent 50 years of my life building companies, most of which were on the edge of bankruptcy when I came in to save them, and by the time I left were among the largest in the nation in their niche.
As a businessman, I see many flaws in JG, not the least of which is the “bullshit jobs” problem.
But, I’d like to learn, what you seem to know. If you would please give me your answers to the questions, I will very much appreciate the education. I would do the same for you, regarding Monetary Sovereignty.
(Or you can simply call me a “crazy, rightwing, Austrian nutjob,” as a (the?) leading JG proponent did, when I asked him to answer a couple of those questions.)
By the way, your comment that I want the federal taxes to “be fully replaced with the typically-very-regressive systems of taxation commonly deployed by state governments,” not only is ridiculous, but demonstrates surprising ignorance of Monetary Sovereignty:
1. Federal taxes do not need to be “replaced” by anything.
2. If the federal government adopted the Ten Steps to Prosperity, state and local taxes could be reduced, too.
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Yeah, I read it. Long time ago, and a few times since. I’m not talking out of my ass (as you seem to be doing); I actually read what I’m criticizing *before* criticizing it (or even deciding to do so!). That post demonstrates that you have NOT read very much, if any, of the literature at all. And by ‘the literature,’ I don’t mean NEP blog posts, or even any of those Bill Mitchell treatises which are also technically blog posts (but might as well be informal papers). I’m talking about actual formal papers, written by MMT *academics* (not just fans with blogs), among which are found inquiries into every facet of the JG you could ponder (far more questions are posed, and many answered, than the measly 8 you came up with).
But what’s more important here is your dishonest treatment of the JG. Name me a SINGLE policy proposal, in all of human history, for which there is just ONE unified interpretation and set of details. I’ll give you everything I own, and everything I earn for the rest of my life if you can do it, because you absolutely can’t, because there isn’t any such thing.
IT IS DISHONEST to criticize the JG on the grounds that <100% of its proponents agree on the details of how to run it. You must be joking.
And I'm smart enough, sir, that I'm not going to fall into the trap of parsing your (least?) favorite details of the JG in order to allow you to prove that my answers contradict those of someone else you've asked about it, and declare (a false) victory. I'm not that dumb, though I'm sure you've lured a few into your little web of dishonest debate tactics.
"Or you can simply call me a “crazy, rightwing, Austrian nutjob,” as a (the?) leading JG proponent did, when I asked him to answer a couple of those questions."
I won't, because I know that's not what you are. You are a liberal/progressive/whatever-you-prefer-to-call-it lefty. In fact, I'd like some proof or evidence that Dr. Wray or Mr. Mosler (presumably it's one of the two; correct me if I'm wrong) called you that, because I'd bet that either it didn't happen at all, you misunderstood what was meant, or you presented yourself as a crazy nutjob *of some sort* and were appropriately labeled as such, in public, and now your feelings are hurt because they embarrassed you. My guess would probably be that you phrased and presented your question(s) in such an overtly insulting and/or confrontational way as to make yourself look like said nutjob (unwittingly, no doubt). I wouldn't put money on it, but I figure that's most likely.
"By the way, your comment that I want the federal taxes to “be fully replaced with the typically-very-regressive systems of taxation commonly deployed by state governments,” not only is ridiculous, but demonstrates surprising ignorance of Monetary Sovereignty…"
This was simply an unfortunate choice of words, and my mistake. I shouldn't have said 'replaced' (and believe me, I know better), but I didn't anticipate that you'd take it that way. My point was that, if you eliminate Federal taxation, which includes progressive individual income taxation, *all that's left* are the generally highly regressive state (& local) taxes. I meant 'replace' in the sense of taking over as the primary means of taxation in the US, not in the sense of funding anything (though they do, at the state level and below…but you know that).
Further, you don't need to threaten to lecture me on monetary sovereignty, sir, I'm quite well-versed, and I daresay I've got a much deeper grasp of it than you do, because instead of barking all over my shadowy corner of the internet about This One New Thing I Learned About Money That One Time (with nary a new idea, EVER), I actually study it at the theoretical (and historical) level. You don't wanna go there, trust me (though I know you don't).
"As a businessman, I see many flaws in JG, not the least of which is the “bullshit jobs” problem."
looooooooooolololololol
Please explain in detail how your 'business experience' led you to this particular (and notably inhospitable to business) criticism. I could use a good laugh.
You're criticizing capitalism (with this particular post), Rodger, not the JG. You're just using the JG as an example, but dishonestly placing the blame on the example, rather than the root cause. Again, this is putting the hovercar before the horse.
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Got it. You won’t (can’t) answer legitimate questions about JG, because answering questions is a “trap.” Truly sad.
I always am glad to answer questions about Monetary Sovereignty, and never worry that my answers might differ from Warren’s or Randy’s.
In business, we used business plans. These plans addressed the possible problems that might emerge. The questions I asked about JG were of the type that answers would elicit a business plan.
Since you think answering questions is a “trap,” you must not know of any business plan for JG.
Years ago, I was an owner of an advertising agency. If I walked into a client and said, “It’s a trap. I won’t answer questions about this marketing plan, because other people at the agency might have different answers.” the client rightfully would have kicked my butt.
Be honest. You have no clue about the answers to the questions. You just love that name, “Jobs Guarantee,” and hope that somehow, everything works out.
Isn’t it typical that questions bring out the anger, when people can’t admit they don’t know?
One last thing: The Ten Steps to Prosperity would reduce state taxes, too. But, if we only eliminated federal taxes (including FICA), and “all that’s left” are state taxes, would you be better off or worse off?
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Wow.
Could you be more dishonest about this?
THE ANSWERS TO YOUR QUESTIONS ARE OUT THERE. However, they’re not monolithic- there’s not just ONE answer for each question.
If *I* offer you *my* preferred answers to your questions, you would- undoubtedly- claim victory because my answers don’t match those of *some other* MMTer (didn’t I JUST explain this? WTF??). It’s a schiesty debate tactic with which I’m all too familiar…and you know it.
So let’s just be clear: ‘answering questions’ is NOT a trap; answering YOUR questions HERE, in THIS context, most definitely is.
Where’s that proof of your story about being called names by a ‘prominent MMTer’? Still waiting for that, but not holding my breath, because I can plainly see how dishonest you can be, when it serves the rhetorical needs of the moment.
“Be honest.”
YOU FIRST.
I’ll happily and readily admit that I DON’T know all the details of how the JG would work. NOBODY DOES. You are setting impossible standards for your opponents, then claiming victory when they are unmet. That’s a very dishonest way to debate, among other things.
As I said before, THERE IS NO POLICY PROPOSAL IN ALL OF HUMAN HISTORY for which its supporters held a monolithic interpretation. NONE. What you’re criticizing the JG for (having conflicting variations) is true of literally ALL POLICIES EVER PROPOSED. Dishonest again.
Let me know when you decide you’d like to debate honestly. Until then, enjoy your tower of solitude, looking down on us idiots and hoarding all the answers to life’s biggest problems. What an ego.
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Read this, from 2012: https://mythfighter.com/2012/01/12/mmts-job-guarantee-jg-another-crazy-rightwing-austrian-nutjob/
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I’d like to add that I admire and appreciate the fact that you’ll allow such disagreement on your blog. Many don’t, and I want it to be clear that I’m not against *you*, just some of the things you’ve been saying.
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Thanks.
This is an educational site.
I learn from disagreement. Also, disagreement allows me to respond, which is educational.
When someone answers the questions I referenced in the above comment, I’ll learn or the questioner will.
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By the way, I’m pleased you’re not against me. You just call everyone dishonest.
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“After some of the reading, I wrote this. You should read it.”
And read my answers, too, please.
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Anything imaginable that is feasible and doable, is certainly affordable .Beautifully simple. The only honest question relates to whether or not we should. Our culture is embedded in a seventeenth century mindset. Science and technology have advanced way past cultural perceptions.But unfortunately adherents arent making enough waves.
. The rich enjoy being privileged, as can be expected. Unfortunately since they make the rules, using artificially constrained point systems rigged in their favor, one must aspire and succeed to be rich as well, or make due with scraps in our wasteful, most consider wonderful , ultra competitive free market system. Then if by a miracle you make it, you too can fall into the trap of believing your exceptional and deserving of the rewards. .Religions bring up the rear with a menagerie of traditions exercising sad limits on impoverished , maybe, well meaning mental midgets. If you ever wondered what it would be like to live in a world where fear of falling off the edge was palatable, dont conjure too hard , cause we’re still there.
. Sadly, maybe ironically, i cant help but wish i didnt know the truth. Knowledge of the monetary system and federal financing operations doesnt actually help my finances much , it just torments and frustrates me. Explaining reality to friends or family results in a serious castigation, relegating me as some sort of conspiracy socialist nut bag. No different then when discussing animal sentience before they devour a poor pigs carcass. , I wish i didnt know about all that unnecessary pain either, endured at our bequest. Feels like useless information, just thrust upon me because i happened to be curious and skeptical. .
Perception is reality, the rich own the government, and most people are self centered sycophants. The purpose of life is to work hard and make a living, while surplus extractions are exponentially propelled up to the well deserved elite classes. Sadly science and technology follows the same pathway. With all the necessary rudiments and know how to live in a veritable Utopia , which of course is a bad word or goal, we instead cleverly schlep further towards mindless oblivion, working harder and longer for less , engaged in ever more meaningless redundant occupations, while accepting onerous private debts we cant pay back, assuring maximum stress, and hopefully compliance. We live to pay bills. Money must be earned through good old hard work, unless of course your lucky enough to be in the right place at the right time, so to speak. Humans serve an economy that provides ostentatious rewards for the few, whom most believe deserve it via hard work,, and won the lottery. Such an inspiring myth. Sadly , the only two things i see Americans exceptional at is waging war and playing three card Monte. We excel at that game , inventing complex financial products, behind a plethora of professional sounding jargon.
Damn, if i had to do it all over again, finance, that would have been my meal ticket. Should have delved into math with far more interest.
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Well, if your criticisms of jg are all held up what is the solution to the extreme low employment we see today? Some ideas like reversing austerity would have a quick effect. Others would involve a whole new mindset and take a generation. What do we do in the meantime?
We can’t stop bullshit jobs [we can when our civilization crashes, which is already overdue] And most workers don’t enjoy their jobs already.
Many will take on whatever is on offer, for obvious reasons, so a JG will help such people. It’s a form of welfare but as Warren Mosler writes, not having a job is a major impediment to getting a job. So having any job will make them more employable in the private sector.
There is plenty of latent capacity in the economy [be interested to get figures on that!] so Bullshit jobs might still be useful, such as infrastructure maintenance, which can be paid for by the federal govt.
Then with work comes better self esteem less stress on welfare and health services and so on. We are maybe conditioned to it but it’s the reality. Look at this about drug addiction and how it results from our chains:http://www.democracynow.org/2015/2/4/johann_hari_everything_we_know_about
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1. Low employment today is not the problem. The unemployment rate has fallen from 10% to about 5.8%. There are lots of crap jobs available. (“Fries with that, sir?” “Welcome to Walmart.”)
2. Low employment never is THE problem. The real problem is the wide income/wealth/power Gap between the rich and the rest..
3. The solution to the Gap is implementation of the Ten Steps to Prosperity.
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Based on this article, I’m tempted to say that the Social Security Trustees have a “bullshit job,” not because it pays too little (It pays too much), or because it is completely mindless (just mostly), and not because it’s a job JG would provide, but because what they say is complete nonsense:
They can’t even get the thing done on time!
They ignore the facts that there is no trust and there are funds and the federal government never can run out of dollars . . .
. . . and that FICA does not fund Social Security payments.</b.
So, I guess this — along with most jobs at the major banks — could fall under one definition of "bullshit jobs" — a job meant to mislead.
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Amen!!!
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Guaranty Minimum Income or Social Security for everyone?
The Fed could Start QE 5 and pay for all of it.
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Sadly, QE creates no money. But happily, the federal government can pay for anything, simply because it’s Monetarily Sovereign.
Your suggestion is similar to Step #3 in the Ten Steps to Prosperity
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“How do we get more from working less?”
Answer: By sending people to full scholarship, all expenses paid, schooling who would rather go to school than do a job pushing a pencil. If 1 out of 10,000 people going back to school can come up with a good idea that will benefit the other 9999, then you’ll get more from working less. This won’t happen quite so well if everyone has to get a job to be part of the working class struggle. Good ideas happen not so much from struggle and unhappiness but from doing what you love and want to do. This is what education is all about. Mind-full-ness, not muscle-full-ness.
You can see what benefits there are to having time on your hands. Prisoners art work and capacity for thought even in the worst conditions are notable. (Birdman of Alcatraz).
Don’t sell anyone short. MS has the capacity to reach our most important asset–mindful education and, in turn, a 1 in 10,000 (or better) ROV.
Silence is golden.
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And teaching those 10,000 people is another one of Rodger’s “bullshit jobs”, not real work?
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Apparently Mike Wright thinks asking him to answer basic questions about a program he supports is dishonest.
Perhaps, it’s too much all at one time. So let’s take a different tack. Mike, have you ever built a business plan?
I’ll show you how. Let’s build one for JG.
We can begin by answering question #1:What are the jobs?
There are many reasons for individual unemployment, including:
a. Unavailability of a specifically desired job
b. Unavailability of jobs that pay “enough.”
c. Unavailability of jobs near home
d. Job seeker’s lack of qualifications or over-qualifications for available jobs
e. Job seeker’s personal background, including age, education, personality, illness, criminal history, etc.
Let’s assume most unemployed people have access to the “help wanted” pages in the local newspaper or a website like Monster.com.
Thousands of jobs are available, but still he has accepted no job nor been accepted by any employer..
How will JG overcome problems a. – e. regarding acceptance by the job-seeker and the employer?
To start building the JG business plan, fill in the blanks:
a.________________
b. ________________
c._________________
d._________________
e._________________
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1. The jobs are those done now only by volunteers.
a. This person is not involuntarily unemployed. He still can work in JG if he wants, but is not now counted as unemployed, and would not be counted under JG either.
b. If he’s turned down jobs like the last one he had because they don’t “pay enough”, he’s also not involuntarily unemployed. JG pays “enough” to live on, and includes child care for situations in which that is the source of the “not enough” concern.
c. JG jobs are all “near home”. It is a locally-run program in each community. Transportation to/from work is included if necessary.
d. No special qualifications are needed for JG. Workers will be matched to jobs that they are capable of doing.
e. JG would have no age limits, education requirements, or disqualifications for criminal history. Health insurance and “sick pay” is included. Workers have only to show up willing and able to work, and behave appropriately on the job.
It’s true there are thousands of jobs available, but there are about twice as many people looking as there are jobs. No matter what the individual reasons or qualifications, as long as there are more people than jobs somebody will be unemployed. That is the fault of the system, not of the unemployed individuals.
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Good. Now we’re talking.
a. Not sure that “jobs by volunteers” answers “unavailability of a specifically desired job,” but do you mean: “If the guy is desperate, he should take any job given to him”?
For instance, a laid-off CEO, who refuses a Walmart greeter job is not “involuntarily unemployed”? Or someone who can’t survive on minimum wage is not “involuntarily unemployed?
Seems like JG is defining out lots of people.
Has there been any research done to determine how many of these “volunteer jobs” are available, or is it intuitive that “there must be lots of those jobs”? Remember, we’re talking about millions of unemployed people.
And aren’t many volunteer jobs in America religion-based? Would the government be paying people to work for a church or synagogue?
b. As for JG paying “enough,” Randy Wray already has said that at most, the pay would be minimum wage. Do you consider that “enough,” say for a typical family of 4?
As for “child care,” is this an extra stipend, or are you talking about setting up actual child care facilities?
c. Locally run? Has any thought be given to how many localities there are in America? Who will run all these local employment agencies? Who will train and supervise these employment agency people?
At one time, Randy Wray said the program could be run without hiring anyone. Perhaps that has changed.
And will the program really provide transportation to and from jobs? In rural, suburban and urban areas? Sounds like a monumental undertaking.
d. Who will “match” the workers to the jobs? Think about it. This is not trivial.
e. No age limits, education requirements, or disqualifications for criminal history?? So this convicted rapist walks in the door . . . Is this a joke?
And what happens when a JG person is fired for cause. Does he get another job, and another, and another . . . ?
“Health insurance and ‘sick pay’ is included.” This is a problem that Randy understood, when he said the maximum pay would be no more than minimum wage.
The problem is, that if pay + benefits exceeds the going private wage + benefits, it becomes the new minimum.
So, if an $8 per hour minimum, is paired with free transportation, free health insurance and free sick pay, you now have gone well above the $8 minimum wage.
That means, JG would compete with private industry, something that JG proponents always swear they will not do.
Doesn’t it seem to you to be a very complex program, requiring massive supervision, training, decision-making and logistics?
Compare that Rube Goldbergian complexity with the simplicity of the Ten Steps to Prosperity, which also has the advantage of less direct bureaucratic government control rather than more.
Review the Ten Steps and tell me. Wouldn’t they better stimulate the economy, faster and simpler, while closing the Gap rather than widening it?
To my businessman’s eyes, JG is a logistical nightmare, with minimal benefit.
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Last one first, MMT, like you, advocates more spending or tax cuts (or both) to reduce unemployment. Not all of the 26 million left behind today will be in JG. The vast majority will be in private sector jobs. The JG workforce, when implemented, will be just enough to prevent high and rising inflation, comparable to the U3 unemployment rate during our best times. JG is an automatic stabilizer, preventing demand from slumping as much in slowdowns (it pays more than unemployment), and from rising so much in booms (workers hired away from JG pay more taxes).
a. A laid-off CEO might opt to wait, live off his millions for a few years, until the next cushy opportunity comes along. I expect he wouldn’t do much JG, and the program really isn’t directed at him. He will continue to have all the programs at his disposal that he has today. And maybe more CEO jobs, if the economy picks up. No tears shed for laid-off CEOs. The program is for the people who are unemployed even when the economy is booming.
More generally, yes, if you refuse a job offer without good cause you don’t collect unemployment, because you are not considered involuntarily unemployed. To collect unemployment you have to say that you’re looking for work and have not turned down any suitable jobs. If the previous job was CEO, I think you’re allowed to turn down Walmart greeter and still collect. And you can still do JG, or not. If you want to say that the few people who can afford to turn down the JG job are still involuntarily unemployed, I’ll grant you the semantic point. The program is aimed toward the low end, as you have noted: to people who want jobs and are not fussy about them, but still can’t find one today. It’s relatively few being “defined out”, and they are welcome to define themselves in.
I know of no research to determine the number of vacant volunteer jobs. I know charities are always looking for volunteers. JG can pay people to do training and education and resume-polishing as well.
I would like to think that JG would pay people working for places like soup kitchens run by religious groups, but if that is not allowed maybe some non-religious ones could be set up by the local government.
b. What you quoted Randy as saying is that the JG wage (compensation package, more precisely) would become the de facto minimum. $10/hr for both adults in the family of 4 puts them over the poverty line, much better than unemployment. They may still qualify for other assistance, too.
These are PROGRESSIVES proposing this, not Tea/Republicans. They would not set the wage at $7.25 with no benefits. Many advocate a living wage, not minimum. They have no sympathy for companies that cannot succeed if they have to offer more than JG. Some would raise prices. There may be a one-time bump in the general price level. This is considered a good trade-off.
Were it not for licensing requirements, I would think that some of the JG workers could work providing child care for JG workers’ kids. But, it would be an in-kind benefit, like health care. Existing private sector facilities would be hiring, due to the added demand, so maybe some JG workers would find jobs there.
c. No need for more local employment agencies, as such. Most localities already have them. The local UI office would be a logical manager of this program. I would defer to Randy, but I think I’ve also seen him (could have been someone else, though) say that 25% of the workers’ wages could be provided to the towns and cities to cover the overhead of running the program. I should think there would have to be some permanent employees.
Most of the unemployed are in cities. Transportation might involve as little as a subway token. In rural areas, yes, it could be a bigger deal. But all it takes is money, right? No problem. Workers could carpool, or one’s “job” might be to drive the others in a program van.
d. Lots of possibilities. Workers could select from available assignments, in a randomly assigned order, or by seniority in the program, or given preferred choice as a reward. Without special skill requirements, mostly any job could be done by any worker. Some small number might be an obvious match. Employers might request specific workers.
e. Like any employer, the JG program would have to be cognizant of the safety of their stakeholders. Would the rapist be any more dangerous in JG than loose in the community, and unemployed? If you want life imprisonment for rape in some obvious cases, I’d be sympathetic. But if they’ve served their sentence and been released, are they to be further sentenced to life unemployed?
Firing: could use the same standards as for unionized municipal employees. This is not an unfamiliar problem.
Yes, the JG compensation package becomes the new de facto minimum. JG would, by definition, compete with private business for employees, in the same way that UI competes today. JG would not compete with private business for customers. Many, if not all, Progressives believe that in a just society there should be no jobs that pay less than a living wage. Businesses that can’t survive without substandard wages are not considered worthy of survival.
Unemployment insurance is just as much a “very complex program, requiring massive supervision, training, decision-making and logistics”. JG would involve fewer workers than the current number of unemployed and underemployed. There are many examples of massive complex Federal programs. There are also examples of massive complex local programs in large cities. Getting 3 feet of snow out of Boston is more difficult than JG, but they do it.
Back to the beginning, MMT advocates many of your 10 steps. Personally, I think all 10 of them would create too much demand, but that’s a matter for learning by doing. JG is to take care of what is left when demand gets to the edge of “too much”, and there are still people who want jobs and can’t find them.
The benefit is not minimal, it is HUGE. It negates the Phillips Curve. It would virtually eliminate all the social ills of 4-5% unemployment – the best that can be done with the 10 steps alone – and that’s a much bigger deal than the economic ills.
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JG and MS seem to agree on affordability; it’s a matter of how the affordability will be best spent. Shall it be putting people to low pay work, trying to fit square pegs into round holes and forcing the work force, or let the individual decide on what the best fit is? We can go either way but simpler is better. The JG seems like such a bureaucratic mess all in the name of tradition. What was once the way to go and be accepted in society is disappearing.
Education and automation are the future. Mind will win over matter (& muscle and jobs, jobs, jobs that don’t, don’t, don’t, spontaneously exist.)
Evolution (mechanization) is trying to relieve humans of drudgery. JG appears to be fighting both history and the future. It means well but it’s stuck in the obsolete reflex of the “hard working man” of decades gone by. That’s not a fight that can be won.
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Jobs don’t spontaneously exist, you’re right. They exist because of demand for the work. There is plenty of work to be done, just a lack of money to pay the workers.
In the private sector, incomes lead to spending leads to hiring. The good thing about BIG is that it gooses incomes, but that will never be able to generate just the right demand for just the right skills in just the right places to hire the last 3% or so of job-seekers. JG provides jobs that satisfy all those limiting factors.
Even if all the jobs in the economy are interesting and intellectual and mechanized, there will still be unemployment (or unacceptable inflation) in a large monetary economy. The question is, can we or can we not do better than that?
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Note to all contributors. I am the publisher of this blog.
As has been noted by several contributors, I welcome sincere disagreement, because it provides a platform for discussion and learning.
However, when you send in your comments, it is not smart to call your potential publisher names or claim he is “dishonest.”
My tolerance level is high, but not infinite. Over the years, several people no longer are considered for publication, because they crossed the line and became far too abusive.
If you want your comments to see the light, try to be courteous.
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golfer,
Vast amount of wishful thinking in your response, so let’s focus on one key point.
You said:
Presumably, you designate volunteer jobs, because you recognize the problems inherent in competing with private industry. But:
1. You have no idea how many of these jobs exist in total. and how many are run by religions.
This is Marketing 101, and a demonstration of the shallow thinking in JG. It’s like building a Catholic church in a town, without first knowing how many Catholics there are in the area.
2. You do not know the legality of supporting religion-based organizations, many of which include proselytization as part of their raison d’etre. How could you not know this, when this is fundamental to a plan you so strongly suport?
3. Many charitable organizations suffer minimal paperwork. They may have one or two paid employees, along with dozens of unpaid volunteers. JG would require these organizations to track and report on all the new employees and maintain these records for the required number of years.
Anyone who has run a business knows about the legal red-tape involved with employees: Record-keeping and reporting, hiring/firing. Even stupid things like defending lawsuits from fired employees.
Everywhere JG goes, it turns the simple into complex, but this last one is a doozy:“Maybe some non-religious ones could be set up by the local government.”
Really? The local government will expend time and manpower to set up charities for the purpose of hiring JG employees? That’s the solution??
As I’ve said numerous times, JG is a business only a non-businessperson could love. Rube Goldberg would love it as a solution to unemployment — especially since unemployment is not even the problem (the income Gap is the problem).
You excuse all this by saying, “There are many examples of massive complex Federal programs.” (So let’s create another one??)
And finally, the saddest comment of all: “I think all 10 of them (The Ten Steps to Prosperity) would create too much demand, but that’s a matter for learning by doing. JG is to take care of what is left when demand gets to the edge of “too much”, and there are still people who want jobs and can’t find them.
Aside from this making no sense whatsoever, it seems to be saying that you would like to install a massive undertaking in order to cut the unemployment rate from what? — 2%?, 1%? — down to zero? What is your goal?
You are worried that the Ten Steps would create inflation, but are not worried about the inflation resulting from a very low unemployment rate.
Bottom line, JG is a Rube Goldberg solution to the wrong “problem,” when much easier solutions to the right problem are available.
How about if we forget about Rube Goldberg and simply do what we already know how to do: Start with the first 3 Steps, sequentially.
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1.Just because I don’t know doesn’t mean nobody knows.
It occurs to me that there might be opportunities for JG workers to be “supplementals” on city payrolls. It would have to be worked out with the unions, but in times of unusual demand (e.g., lots of potholes after an especially severe winter) maybe the permanent workforce could be augmented with JG workers. We should avoid letting the city take advantage of lower wages for jobs they should be doing all the time, or substituting JG workers for FTEs. Others have less severe restrictions than I for “what they should do”.
2.Yeah, I’m not a lawyer. I have a vague recollection of a case than hinged on the presence or absence of proselytizing. Maybe only organizations that refrain can participate. Maybe religions can set up secular subsidiaries to work with JG, serving the same clients without involving religion. It’s a shame we can’t distinguish between allowing the practice of religion and endorsing a particular brand of it.
3.I’d like it to be set up so that the workers are employees of government, not the charity. You’re right, the paperwork is onerous. It should be included in the program, not imposed on participants. Part of the 25% overhead allowance.
4.Not set up charities, set up food banks and such things that charities do. Government has taken up a lot of space that used to be the province of charity. Expenses, including people to set up and oversee the program, are overhead of the program, borne by the Feds, not the local government.
5.0% unemployment is the goal. You can’t get to 2% on a continuing basis without war or inflation. Even if you could get to 2%, what do you say to those last 3 million people who want jobs? It’s not worth our effort to employ you all, so just suck it up and quit complaining?
6. JG cannot cause inflation. All it does is give jobs to people in the private sector’s labor buffer, instead of leaving them unemployed. It is the buffer that prevents inflation. As long as there are unused resources (their labor) then an increase in demand can be matched by an increase in production, and prices can remain constant. Without JG, those people “on standby” waiting for increased demand would be unemployed, “on the dole”, and after a time become unemployable. They lose hope and self-esteem, and are vulnerable to all manner of social ills.
First three steps, all at once. Good start. You still need to do something about the people who remain unemployed when inflation starts to accelerate.
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Wow, i understand disagreements help find solutions, but it seems like macroeconomic realities are getting confused with subjective sociological issues and their further subjective effects. Probably, at the end of the day, its all sort of related anyway, but i see the biggest problem being wealth gaps and the lack of general understanding behind monetary sovereignty. Obviously understanding the latter should initiate some correction of the former, if people have any decency and sensibility at their core. Though that may be the bigger issue. It just seems depressing that even with similar comprehensions of fiscal operations and modern monetary mechanics, adherents still get so upset over essentially trivial differences. But maybe thats the problem, once we get past the whole whose gona pay for it issue, everybody has a different perspective and objective.
Obviously once wealthy people achieve positions of power, and thats who gets it, its much easier to pander back to the ignorant crowd, ” I’d love to help you’ll, but damn, we broke, we havent any money or financing, so until we do , lets not waste any time on wishful thinking we cant do anything about anyways”. This line of reasoning , is what good minds like yours need to solve, not unanswerable questions concerning how best to spend unlimited federal points. Heck the truth is , if people were ever convinced of monetary sovereignty to the point a jobs guarantee was feasibly acceptable, chances are you wouldnt need one anyway. Everything would eventually settle, and those socially able to be productive would be so, and those unable, for what ever reason, would simply be a political problem for the rest of that society. Our country would behave similarly to Finland, Norway, and Sweden. Happy people are less apt to be disruptive anyway, and at the end of the day this monetary sovereignty idea allows function to supersede market inadequacies that perpetually enslave victims into unhappy existences. .
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What to do about unemployment is not “essentially trivial differences”. It is incredibly disruptive and destructive to people’s lives.
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I somehow think this should be MS and MMT working together to complement each other’s strengths, not one OR the other in a battle to the finish. MS provides the demand and subsequent employment followed by the JG to capture what the private sector cannot. No?
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Rodger, I agree with this blog. Thanks for saying it.
As you have discovered, if you criticize MMT, you will be attacked personally, to the extent that they even bother to take you seriously. It’s almost as if MMT is a religious cult rather than a branch of economics.
As I have commented before, I enthusiastically support some direct job creation, to the extent that there is meaningful public work that needs to be done — for example, a CCC to help maintain our public lands. But creating a few thousand CCC jobs is a far cry from creating millions of jobs, suitable for every single unemployed person.
Consider the likely limitations on a JG:
— it should not compete with the private sector
— it should not duplicate existing government programs
— no more than 20% of the JG budget should be spent on materials, equipment, and overhead (a rule commonly advocated by MMT and similar to the WPA’s guidelines, except the WPA actually spent nearly 40% on non-labor.)
— it should not attempt to do stuff that needs to be done on an ongoing basis, like caring for the elderly, because then who would care for the elderly during booms when the JG labor pool shrinks? “Sorry Granny, but there won’t be anyone available to change your diaper until the next recession.”
Most of the JG activities proposed by MMT do not fit within those limitations. Infrastructure? That’s mostly materials and equipment. Day Care? That would compete with private day care, and who would take care of the kids during booms? Maintaining city parks? That would duplicate existing parks department jobs. And so forth and so on. So that brings us back to the CCC.
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Isn’t maintaining public lands something we need to do on an ongoing basis? Can we stop when the economy is good, let them go to seed?
I’m not an expert on Depression-era programs, but didn’t they do things like build roads and dams and such? That would be more materials-intensive than JG. And if it turns out that the overhead is more than 20%, that is easily changed.
I see JG using day care, not doing it. Being a customer of private day care, not a competitor. During booms, if the JG workers get hired away by private industry, they will still need day care services.
If a JG worker works in the food bank, and the economy improves, there will be fewer poor families needing food bank services. Most charity-oriented volunteer activities are like that, the demand for them is counter-cyclical.
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Rodger, I have a more general economic question about your preferred inflation cure, raising interest rates.
If it works as you say, the increased demand for money caused by the higher rates means that people hold on to (add to savings) more of their money, money that otherwise they would have spent. It is the reduced spending that reduces the upward pressure on prices, reducing the inflation.
But more saving and less spending means reduced sales for business. And what does business do when sales go down? They lay people off.
How do higher interest rates not simply move the economy along the Phillips curve, to a point of lower inflation and higher unemployment?
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If you’re referring to the increased demand for corporate or state bonds, the money goes to the corporation or the state, which have borrowed the money in order to spend it. So there is no “hold on to.” Money is transferred.
If you’re talking about federal bonds, higher interest increases the demand, but does not increase the supply, so there is no additional “hold on to.”
Raising interest rates “strengthens” a currency, so that imports become less expensive, and more is imported, both of which work against inflation.
You are correct that every anti-inflation measure (decreased federal spending, increased federal taxing, higher interest rates) can have anti-business implications.
One advantage to increasing interest rates is that this also pumps more dollars into the economy, via federal interest payments, which is stimulative.
Historically, raising interest rates has not negatively affected GDP growth. See: http://goo.gl/v09EuQ
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Yes, “hold on to” is wrong. People would put more money into savings of one sort or another. The point is that they won’t spend it.
The way the Fed raises the interest rate is by selling Treasuries (increasing the supply and driving down the price), reducing deposits and reserves. Supply and demand is always balanced. If the supply of Treasuries were not increased, the price would not fall and the Fed would not hit its new interest rate target.
If the currency rises on FX markets, cheaper imports would shift some spending from domestic to imported goods. Exports would fall, which is also reduced demand for domestic goods. Even if government pays more interest to the private sector, that must not fully offset the reduced spending, else you have accomplished nothing on balance. (MMT disagrees on this point, but let’s ignore that for now.)
So the reason higher interest rates reduce inflation is because they reduce spending and employment. Do you agree?
(That link is about inflation generally compared to specific prices: oil, food. There’s nothing there about interest rates.)
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I compared the 3-month T-bill rate to the change in GDP 9 months later, for 1970-1990. The correlation is -.54. Higher rates, or at least rising rates, would seem to cause lower growth, and vice verse.
I picked that time frame because of the large changes, up and down, in interest rates during that period, so that any relationship would not be obscured by other factors.
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https://mythfighter.com/2009/09/09/low-interest-rates-do-not-help-the-economy/
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the problem with economics is the Faith in Cost. The belief that Cost exists and that every Thing that exists costs (or has a price). Cost is a creation of intersubjective relationships, meaning it exists only because of Man. And it exists because Man decided to believe in its existence. Economic Theories created within this Faith are all wrong as they are grounded on something that doesn’t exist. Humanity must first get rid of this perversion of Cost and then remains to be seen if Economic Theories will still have a place outside that Faith.
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Interesting. While we do assign a cost/price to physical things, the only real cost of anything is the human labor that is required to reproduce it.
Some things, like a copy of a software program, or a single pill of a new drug, can be reproduced for virtually nothing, but the production of the very first copy had a very high cost. Thus the price often deviates from the cost. As a society, we establish protections to prevent anyone but the producer of the original item to profit from the low cost of producing copies, so that others will still expend great amounts of labor to produce more of such highly beneficial things.
Natural resources can be said to have no cost, but people often expend great amounts of labor in exchange for the right to control them. Thus the cost is transferred to the resources, via that right, which usually is one created by social systems. Even in the absence of social systems that enforce such rights, owners protect their control by expending labor on the defense of it; by guarding access to it, for example.
I don’t see anything here, though, that is not (at least implicitly) recognized by most economic theories.
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