Sunday, May 22, 2011

The Day After the Rapture

Now that we know we're not entering the post-Rapture period--no crashed vehicles at the side of the road, for instance--I suppose I should get back to work. Today's work will largely involve the yard, as we will receive our first visit from The Claw since February, and the last one until September. I'll post a picture of the pile when we've finished.

But a couple of notes on my way out. First Dan Walters has this for our edification and delight. The problem is that his proposal takes any downturn in California's fortunes and makes it a lot worse. If it's true that "[w]ith a high tax burden, a dense regulatory structure, a decaying transportation system, still-high housing costs, an uncertain water supply, a failing education system, a chronically imbalanced state budget, and a growing underclass, California is not attractive to the massive investment it needs to employ 2 million jobless workers."

This pessimistic view assumes that California will have at least a decade or two of stagnation. I'm inclined to agree with that, but not because it's the view of William Watkins, an economic forecaster at California Lutheran University. It's because Immanuel Wallerstein noted, on the election of Ronald Reagan in 1980, that we would have to suffer 50 years of neoliberal economics. My optimistic will hated the very idea, but my pessimistic intellect, said, "Yeah, probably." And we're only in year 31. We can expect that the financial powers what be will spend the next 19 years desperately trying to make neoliberalism work, perhaps with a couple more bubbles, if they can find anything to exploit. It's possible that they'll glom onto Social Security, the only resource most Americans have left. The problem with that, of course, is that the boomers are many, and we still do have elections in the US. And of course, because it's the only resource most Americans have left.

So what course of action does Walters propose? Well, let's take a bad situation and make it very much worse. We'll cut government! "Reducing safety net services to the poor, slashing pensions for public employees and prison spending, and increasing college fees and other non-tax revenue would become a stark necessity, not merely a topic for detached political debate." Huh? Have the problems noted above? Then do a bunch of stuff that will make them all a great deal worse. Really trash the place! J noted that it was kind of like the "heightening the contradictions" of some left groups in the 1970s. Make things worse and bring on the Revolution. Uh huh.

Getting down off the soapbox, I'll note a good paper by CEPR's John Schmitt on the respective unemployment policies of Denmark and Germany, and their usefulness in theUnited States. The basic argument is that in a demand crash, Germany's work sharing policies are far more effective than worker training for jobs that don't exist. I skimmed the paper which has formulas (a big no-no if you want me to read it), but you can get the main points here.

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