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Bob Herbert: Maybe Next Time You'll Know What To Do About It

letsgetitdone's picture
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Bob Herbert, in his column on June 7th said:

There is no plan that I can see to get us out of this fix. Drastic cuts in government spending would only compound the crisis. State and local governments, for example, are shedding workers as we speak.

And by July 26th he still hadn't come up with a solution and began his column with:

The pain coursing through American families is all too real and no one seems to know what to do about it.

Bob continued with a discussion of a study by the Rockefeller Foundation using an economic security index to measure economic insecurity. the study headed by Jacob Hacker found:

. . . that more than 20 percent of Americans experienced a 25 percent or greater loss of household income (without a financial cushion) over the prior year — the highest in at least a quarter of a century.

After discussing this finding at some length and quoting Hacker, Bob concludes with:

Policy makers have dropped the ball completely in terms of dealing with this devastating long-term trend of ever-increasing economic insecurity for American families. Long-term solutions that have to do with extensive job creation and a strengthening of the safety net are required. But that doesn’t seem to be on anyone’s agenda.

Meaning, it seems that Bob Herbert may be someone who does know what to do how about it, who is playing the game of: "I'm no gonna say." So, my question is: Why don't you propose something Bob?

In my reply to Bob's June 7th post, I pointed to Warren Mosler's three-part solution to the problem of unemployment including: a FICA Tax holiday; revenue sharing of $500 per person for the States; and a Federal Job Guarantee (FJG).

More recently, L. Randall Wray discusses the Federal Job Guarantee in a post explaining MMT to the Libertarian/Austrian School of thought and making it clear that an FJG doesn't have to be an enormous Government program.

Also, Bill Mitchell has a recent post on a Job Guarantee proposal in the Australian context discussing in part how a program like this can be regionalized to benefit areas that need it most. And here's a multi-part program from Marshall Auerback with a number of elements expanding Warren Mosler's three-part program.

In short, there's a lot of good work out there, Bob. If you read it, you'll be able to write columns proposing solutions, and not just grieving over our problems. And you won't have to say things like:

The pain coursing through American families is all too real and no one seems to know what to do about it . . .

anymore. Because, you'll know what to do about it.

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vastleft's picture
Submitted by vastleft on

... a really bad economic period in America's past, a Grave Recession we could call this hypothetical construct, we might have learned some lessons about how to get out of such a jam.

Unfortunately there's no history to draw upon about how to trade in an Old Deal for something better. No wonder our greatest minds are stumped!

Stirling Newberry's picture
Submitted by Stirling Newberry on

In post-war history there were three relatively large periods of economic crisis. The demobilization crisis from 1946-1949, the late 1950's crisis from 1957-1961, and the inflationary crisis from 1974-1983. In each case the solution was to generate government demand, though in the case of the 1974-83 crisis, this demand ultimately did not generate enough follow on consumer demand to raise wages.

Government demand can also be structured to deal with the pollitarky problems faced in the present.

vastleft's picture
Submitted by vastleft on

... your comment was in response to mine, please note that I was being ironic, talking past the obvious facts of the Great Depression and New Deal... just as Versailles denizens do as a matter of course.

The post-war examples are a handy reference as well, thx.

letsgetitdone's picture
Submitted by letsgetitdone on

I don't remember 1974-1983 as a period in which Government demand was used strongly to lift the economy. On the contrary, both Ford and Carter were concerned with balancing the budget. They didn't make it; but they tried awfully hard.

If you check, I think you'll see that the post-war low of the debt to GDP ratio actually occurs during Carter's Administration, and that it is low throughout his presidency. His deficits were also pretty small, showing that there was not much Government-generated aggregate demand going on.

During most of this period also the Fed was working against fiscal policy with a conservative monetary policy. When Volcker got in as head of the Federal Reserve he was determined to use monetary policy to fight the oil cost push inflation that was going on. This created or at least reinforced stagflation. When Reagan took over and began to employ militantly anti-union policies at the same time as Volcker's very tight monetary policy, there was no way for labor to counter the stagflation.

This was good in the short run because the reflexive effects needed to keep inflation spiraling up were no longer there. The American people had less money for oil and the Saudis and other oil suppliers had to give way and lower prices because demand was not there.

Submitted by lambert on

The onlie begetter of the Public Option Sparkle Pony!

Gawd help us all if he comes up with another solution, and the career "progressives" try to fuck us over with it again...

letsgetitdone's picture
Submitted by letsgetitdone on

I didn't want to bring up that connection because it says nothing about this study. But, the same thought crossed my mind. Jacob Hacker will never outlive his little sparkle pony that did so much damage,