Remarks may be a bit brief and sporadic at times this week.
Have a pleasant evening.
09 March 2015
C. K. Michaelson: The American Economy - A Minority Report
Some Assembly Required
A Minority Report
by C. K. Michaelson
The jobs report is all about inflation and interest rates and only incidentally about workers and jobs. Economists claim, with little evidence, that mother nature or the universe or Keynes' ghost has an immutable law decreeing that a certain level of unemployment triggers a certain amount of inflation. Right now they pretend that 5.5% unemployment is the tipping point for this see-saw. If unemployment edges lower than that, inflation will pick up. In fact, hyperinflation may well appear, magically, overnight. It's called NAIRU – the Non-Accelerating Inflation Rate of Unemployment. The idea was first introduced as NIRU (non-inflationary rate of unemployment) in 1975. which was supposedly an improvement over the "natural rate" of unemployment made up Milton Friedman in 1968.
The idea is that as employers create more jobs, they have to compete for workers by offering higher wages, workers can demand higher wages for making the same number of widgets or threaten to go down the street and make widgets for the next guy. And to pay the higher wages, companies have to raise the price of widgets. The customers – who are the workers when they are not at work – will spend the extra wage income on the higher priced widgets and pretty soon they'll want more money for their labor. Round and round it goes and the first thing you know we're the Wiemar Republic.
Many things wrong with this idea, the biggest being the rather quaint pretense that today's American worker any clout when it comes to wages. First there's the huge number of workers who are AWOL from the labor pooI right now. And if the workers unite (ha)! to demand more wages, the companies will just move the jobs to Bangladesh or some other right-to-work place. Oh, wait, they already did, except for baristas, burger flippers and bedpan bangers.
If there is such a thing as NAIRU, it obviously isn't 5.5%, for wages went up a whopping 0.1% with the latest 0.2% fall in unemployment.
And then there's the definitional problem: What is unemployment? How big is the work force and who are all those guys sitting on the bench waiting to get into the game?
For that matter, what is employment? Is working 17 hours a week at Wally World or 22 hours a week at Macky D's 'employment'?
What would full employment look like, the kind that might, just might, lead to wage inflation? Would all workers who wanted a job have a job and would that job be commensurate with their skill and experience? Would that job provide the hours and wages they need to provide a decent life for themselves and their families – or would their kids still qualify for free breakfast and lunch at school and go to the emergency room for their healthcare?
Some data: There are 92,898,000 Americans currently not working. We have a 62.8% labor force participation rate, a 37 year low. Just last month another 390,000 Americans became invisible to the BLS. Officially, there are 8.7 million people who were actively searching for work last month, plus another 6.5 million people who didn’t look last month but who say they want a job. Plus another 6.6 million who want to work full-time but can only get a part-time job. That’s nearly 22 million people who are unemployed or underemployed.
The unemployment rate for blacks is nearly twice the national average.
American added 58,700 waiters and bartenders – pretty much earning minimum wage or less - as part of those 300,000 new jobs.
The unemployment rate would have been unchanged at 5.7% - safely out of the inflationary swamp – if the labor force participation rate had stayed steady. The big improvement didn't come from jobs, it came from despair of ever finding a job.
We're still about 1 million full-time jobs short of where we were pre-recession, and that's not even adjusting for population growth. All told, we're still about 4 million jobs away from the economy being okay;. At this rate we'll break even in September 2016.
Go Recovery!
The Will To Power in the Exceptional
"Christianity is called the religion of pity. Pity stands opposed to the powerful emotions which heighten our vitality; it has a depressing effect. We are deprived of strength when we feel pity...What is good? All that heightens the feeling of power in a man, the will to power, power itself. What is bad? All that is born of weakness. What is happiness? The feeling that power is growing, that resistance is overcome."Friedrich Nietzsche, The Antichrist
'What is truth?' asked the cynical bureaucrat Pilate, and then turned and washed his hands of it.
"Cultures that do not recognize that human life and the natural world have a sacred dimension, an intrinsic value beyond monetary value, cannibalize themselves until they die. They ruthlessly exploit the natural world and the members of their society in the name of progress until exhaustion or collapse, blind to the fury of their own self-destruction...The corporations, and those who run them, consume, pollute, oppress and kill. The little Eichmanns who manage them reside in a parallel universe of staggering wealth, luxury and splendid isolation that rivals that of the closed court of Versailles. The elite, sheltered and enriched, continue to prosper even as the rest of us and the natural world start to die. They are numb. They will drain the last drop of profit from us until there is nothing left. And our business schools and elite universities churn out tens of thousands of these deaf, dumb and blind systems managers who are endowed with sophisticated skills of management and the incapacity for common sense, compassion or remorse. These technocrats mistake the art of manipulation with knowledge."Chris Hedges“All life has inestimable value even the weakest and most vulnerable, the sick, the old, the unborn and the poor, are masterpieces of God’s creation, made in his own image, destined to live forever, and deserving of the utmost reverence and respect...All too often, as we know from experience, people do not choose life, they do not accept the Gospel of Life but let themselves be led by ideologies and ways of thinking that block life, that do not respect life, because they are dictated by selfishness, self-interest, profit, power and pleasure, and not by love, by concern for the good of others...As a result, the living God is replaced by fleeting human idols which offer the intoxication of a flash of freedom, but in the end bring new forms of slavery and death...Francis I
I have long felt that the basis of our economic and political discussions are a distraction, and by design. They force us to operate from some fundamental policy assumptions that prevent a discussion of our current state of affairs in a necessarily frank and fundamental manner.
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El Greco, Fábula of Boy Lighting Candle With a Fool and an Ape
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With regard to economics and political systems, a 'practical person' may decide on whichever form of government serves their own private interests best.
The amoral person chooses what is expedient, and in this they are little different from the worst, because they will go along with whatever serves their own power and self-interest above all. They will rationalize themselves into a hell on earth, or hereafter.
A 'moral being' must choose what is just, as defined by some higher principle of justice for all. And that choice must be made because it is inherent in being human.
Just as love is the touchstone in religion, justice is the touchstone in public policy.
Exceptionalism is no virtue, no mark of the chosen, but merely the sin of pride, wearing the silks of rationalization and self-delusion. And this is at the root of every fallen angel, every lost soul, and every failing nation.
I am not here making an appeal to the careless few based on either faith or reason. Alas, I fear they are now beyond both morality and common sense, until a reckoning comes.
Rather, in this solemn season I am reminding the faithful and the many of a message they have probably heard, and forgotten, so often. A man cannot serve two masters. He will love the one, and hate the other.
The ultimate question is, 'whom do you serve?' Choose as you will, but you will live with your choice, forever. We do not choose all at once, but every day, and in all our actions, whether we are consciously aware of our choice or not.
Your carelessness and self-approval, your reputation and connections, your associations and positions, will be of no comfort and value to you then. When exposed by the light your life of self-absorption and exceptional selfishness will be an ever stinging rebuke of burning regret and torment. Not that you have betrayed and traded away so much that is good, but that you have done it for so little.
“A true opium of the people is a belief in nothingness after death - the huge solace of thinking that for our betrayals, greed, cowardice, and murders that we are not going to be judged.”Czesław Miłosz
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