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Reality Check Plus

letsgetitdone's picture

After reviewing the terrible state of our economy and the need to reconstruct it so that people can find work and a vibrant middle class can be rebuilt. Bob Borosage suggests that Congress go back to first principles. he briefly reviews the post- WWII history of employment legislation and says:

That debate was revisited in the 1978 Humphrey Hawkins Full Employment Act, which initially sought to revive the mandate to full employment, and the right to a job. In the end, it too was diluted, offering five ultimate goals: full employment, growth in production, price stability, balance of trade and balanced budgets. It was this act that gave the Federal Reserve the dual mandate of pursing both full employment and price stability. Needless to say, over the last decade, the goals were distorted in practice, with price stability becoming primary, while trade deficits soared, manufacturing was shipped overseas, and budget deficits rose -- before the collapse.

Glad to see an "access" progressive talking about this, but I think these goals have been "distorted" for a lot longer than the past decade. In fact, I seem to remember that the Federal Reserve never tried to pursue its mandated full employment goal during any of the Carter, Reagan, Bush 41 and Bush 43 Administrations. And even during the Clinton Administration, when full employment was approached, it is debatable whether this was due to Fed actions taken with the intent of getting to full employment. I think the history of the Humphrey-Hawkins act is one of continuous violation of its mandate to place price stability and full employment on an equal footing.

Borosage goes on:

It is time to reassert that full employment is the primary measure of our economy: "Continuous and useful employment for those willing and seeking to work." Mass unemployment is an unacceptable failure. We will not learn to live with it. We will keep pushing until we eliminate it. Government will strive to create the conditions for the private market to create the jobs we need. But it will act as an employer of last resort for those unable to find work over a long period of time.

Welcome to the fight Bob, others have been calling for Federal Job Guarantees for a long time now. It's good to have you aboard with a good direct statement of the need and its basis in US Law.

It is easy to scorn such admonitions. Congress excels at setting high sounding goals that it is certain to ignore. But we've got an economy where corporate profits are up, bank profits are up, inequality is rising -- and there are no jobs. This cannot become the new normal. However naïve it may sound, it would be good for the congress and the president to have the debate. Commit clearly that full employment is the measure by which their actions should be judged. Or alternatively, admit that full employment is no longer plausible, so we will build a strong social contract -- of training, guaranteed income, health care -- for those discarded from the workforce. Let's have the debate -- for the one choice that is socially ruinous is the one we seem to be drifting towards -- mass unemployment without a safety net.

Let's indeed have the debate, but let us not have it take too long, and while it is happening, let's have no more trouble from the Republicans about extending unemployment insurance for people who can't find work. In particular, let's have no more trouble about legislation that will give a break to the '99ers. They are most in need, and none of us ought to have a bit of patience for the Hooverite BS of some Republicans, saying that they don't want to to work, or they'd find a job.

You say, what about the filibuster?

Well, the Democrats need to get rid of the filibuster tomorrow. What is the filibuster worth? The filibuster is not worth the job of a single laid-off American.

Finally, for Borosage, it would be good if he started to give some recognition to those hard-working prophets among us who have been advocating for a Federal Job Guarantee for many years now. People like L. Randall Wray, of the University of Missouri at Kansas City, and Warren Mosler, Independent Candidate for the US Senate in CT, along with Bill Mitchell of the University of Newcastle in Australia, in particular, have been advocating for a Federal Job Guarantees program and illuminating the issues connected to it for many years. Bob Borosage never seems to get much beyond Paul Krugman, Joe Stieglitz, Dean Baker, and perhaps Yves Smith when he writes about economic recovery.

Perhaps it's time he looked into Modern Monetary Theory (MMT). It might free him from having to agree with the deficit hawks and other deficit doves that: Of course, the US has a long-term deficit problem, so eventually we'll have to cut some Government programs before we run out of money, or cause hyperinflation.

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability).

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