This diary is not a ‘feels good’ diary so if you don’t want info that will make your stomach go into knots (before you use meditation to undo the knots), just skip it.
But if you want reality and are ‘prepping’ prior to hearing what Obama will say, it will serve you well.
And what the info will show is that the economics currently used as the basis for decision making is truly flawed and that the idea inherent in MMT(modern monetary theory) of ‘full employment’ is the only way to address what is coming ‘down the pike’.
“But there was an interesting Bloomberg article (August 29, 2011) – Give Karl Marx a Chance to Save the World Economy – by one George Magnus, who is listed as a senior economic adviser at UBS Investment Bank. Confused? Why would a banker invoke the thoughts of the long-dead and usually vilified (by bankers) philosopher? For me it is always a normal part of thinking to go back to Marx because his dissection of capitalism – the sources of profits and the importance of seeing beyond the superficial exchange relations and thus understanding class relations embedded in production – has not, in my view, been bettered. And now a banker is suggesting that need to read Karl Marx.”
“We cannot really understand the crisis unless we understand the underlying class dynamics. Sure enough I usually say that the crisis is the result of poor government policy and a failure to employ the fiscal tools at the disposal of governments in an appropriate way. But the question that follows is WHY?
Why are our governments coming under pressure to tighten fiscal policy when it is clear that more spending is desperately required and it doesn’t look like it will come from the non-government sector?”
“The US has roughly the same number of jobs today as it had in 2000, but the population is well over 30,000,000 larger. To get to a civilian employment-to-population ratio equal to that in 2000, we would have to gain some 18 MILLION jobs. ”
“But if more and more Boomers stay in the workforce, the number of new jobs needed to get back to what we think of as “full employment” will be just that much higher. Think about it. If only 25,000 Boomers don’t retire each month (not a stretch) for another ten years, that adds 300,000 jobs a year we need just to break even. That is 20% more than we currently think of as the minimum number of new jobs needed per month (125,000). Talk about moving the goal posts just as we start to get there!”
“This table shows the number of jobs we would need to create on a consecutive monthly basis to get back to a given level of the labor force as a percentage of population, starting at 64%. Remember the chart above that shows we are barely above 58% now.
Note that simply to reduce the unemployment rate to 8% over two years at the lowest participation rate of 64% would require 157,000 jobs a month. If those jobs started showing up, the number of people looking for jobs would increase, thus increasing the “official” unemployment rate. Most of the numbers of required new jobs are simply not possible, if history is any guide. (This is a politician’s nightmare. It will be years before they can take credit for something they didn’t do.)
Of the 36 numbers in the table, only 6 have historically ever been achieved, and then only in rousing economies. Certainly not in an economy that is at stall speed at best.”
Goldman Sachs notes that historically 90% of new jobs come from small businesses, with 75% coming from firms with less than 20 employees. (PDF) . Some of those become Google, but a lot of them are simply small, local services. But every job, if it is yours, is important. Even if somehow a Republican appeared in the White House tomorrow, there is no magic he (or she!) could bring with him/her to fix the unemployment problem.
So now you’re prepared to rebut whatever Obama says.
This song has nothing to do with the topic of this diary; just something to share of an artist that never got his due.