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View Diary: Structural Stupidity on PBS, Debunked by Krugman and Baker (123 comments)

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  •  Here's the full quote, RFK Lives, ... (4+ / 0-)
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    akeitz, chira2, Upper West, Aramis Wyler

    ... without the ellipses, as well as some commentary from Matthew Yglesias at Think Progress (emphasis added):

    There are some structural issues with our economy where a lot of businesses have learned to be much more efficient with fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller. Or you see it when you go to the airport and you use a kiosk instead of checking at the gate. What we have to do now, and this is what the jobs council is all about, is identifying where the jobs for the future are going to be, how do we make sure that there’s a match between what people are getting trained for and the jobs that exist, how do we make sure that capital is flowing in those places with the greatest opportunity.
    [Yglesias writes] Now obviously this is true. One thing that people do is they try to invent machines such that they can then go to businessmen and say, “Buying my machine would be cheaper than paying a worker.” This causes job losses. The invention of the answering machine reduced the need for secretaries. Advances in electronic filing further reduced the need. Cell phones and email have even further reduced the need. ATMs reduce the need for bank tellers. Self-serve checkout machines reduce the need for grocery store clerks. And this is, indeed, one reason why people are unemployed. It’s also the source of progress over the long term. But technological change is a constant. Firms were seeking to adopt labor-saving technology in 1998 and 2006 and 1967 just as much as they are today in 2011. And yet the unemployment rate was much lower in 1998 and 2006 and 1967 than it is today. Indeed, it seems to me that firms probably try harder to find ways to economize on labor when the unemployment rate is low. The fewer unemployed workers there are, the more expensive it is to hire an extra worker and the more desirable labor-saving technology is.
    Now, it seems to me that a fair interpretation would be that President Obama sees certain structural problems in certain industries, and he's offering a solution to help workers who may have been involved in those industries such as bank tellers, airport workers, etc. To say that the President thinks that that's the only problem is silly. Hell, he was the guy who sought tax cuts for people who would actually use the money to pump into the economy and not a tax shelter in Bermuda.

    He gave us the Stimulus in 2009 and wanted more. He saved the auto industry because of the autos, but mostly because of the millions of jobs in the automobile and automobile-related industry involving workers who would also pump money into the economy and not into a tax shelter in the Caymans. Doing all of that while having to deal with Tea Party nuts who wanted to sink the economy.  

    I would tip you, but the man took away my tips.

    by Tortmaster on Sun Aug 04, 2013 at 05:56:51 AM PDT

    [ Parent ]

    •  Pump your own gas, (no attendants)checkout your (5+ / 0-)

      items at Walmart, (no cashier) buy your own subway fare card at a machine (no token booth clerk). HOw is this not structural?

      •  Structural v. not structural? (3+ / 0-)

        I wouldn't really like to get into using those words, because I don't know how we are defining "structural" here.

        I do think you've hit the nail on the head, however, in your first sentence.

        Like the 18th-19th century transition of the industrial revolution, "modern" technology means that much less labor seems to be necessary, but this is true then like now only because the maximization of profit is the first impulse.

        It is not true that less labor is necessary--what is true instead is that "consumers" (a/k/a citizens) are getting shafted by a lack of service because no one has figured out how to make a profit out of this.

        One example--if we as consumers (and workers) could start to demand service workers to help with online activities--getting a green card, a license, a passport, a savings bond, applying for a job, and on and on--life would be so much easier.

        As a former reference librarian, I saw these needs presented every day, but we did not have the time--or even the training--to give these people the help they truly needed.  And now reference librarians are also, ironically, being replaced by automation, even as the needs still go unmet.

        There are certainly many other examples than you and I have mentioned of services going unmet because no one wants to cut into profits or pay taxes--debris-strewn highways and beaches, a lack of interstate and state rest stops, and on and on.

        It's really a question of priorities.

        Just because the government keeps a record of real property transfers, it doesn't mean that the government wants to confiscate your home.

        by NCJan on Sun Aug 04, 2013 at 08:17:12 AM PDT

        [ Parent ]

      •  Look at what Baker says. (4+ / 0-)
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        Val, jeopardydd, Roger Fox, JVolvo
        If this claim were true it would mean that there are substantial segments of the labor market where we are seeing labor shortages. That would mean that workers in some occupations would be seeing rapidly rising wages. We should also see industries or occupations where the length of the average workweek is increasing rapidly. Employers would be trying to get the workers they have to put in more hours, since they can't find additional workers. In these industries/occupations we should also see a high ratio of job openings to unemployed workers. There are no major areas of the labor market where we see this evidence of labor shortages. In other words, Brooks is just making this up out of thin air.
        Saying there are no changes due to technological advances resulting in some jobs becoming obsolete would be idiotic. That sort of shit goes on all the time. Saying it's responsible for the bulk of our unemployment is idiocy. What, did we suddenly get a massive influx of technology that magically coincided with the Wall St ripoff of 2008 that sent our economy into a downward spiral?

        That's what this "structural unemployment" line is for; it's designed to get the perps off the hook. Buy into it at your peril. It's a scam.

        Ou sont les neigedens d'antan?

        by SouthernLiberalinMD on Sun Aug 04, 2013 at 10:54:12 AM PDT

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    •  He DIDN'T seek more Stim in '09, which was a (7+ / 0-)

      big problem.  His leading choice for Fed Chair vetoed that idea, as did his COS who has gone on to win friends and influence people w/ Chicago's teachers:

      There was an obvious tension between the warning about the extent of the financial crisis, which would require large-scale spending, and the warning about the looming federal budget deficits, which would require fiscal restraint. The tension reflected the competing concerns of two of Obama’s advisers. Christina Romer, the incoming chairman of the Council of Economic Advisers, drafted the stimulus material. A Berkeley economist, she was new to government. She believed that she had persuaded Summers to raise the stimulus recommendation above the initial estimate, six hundred billion dollars, to something closer to eight hundred billion dollars, but she was frustrated that she wasn’t allowed to present an even larger option. When she had done so in earlier meetings, the incoming chief of staff, Rahm Emanuel, asked her, “What are you smoking?” She was warned that her credibility as an adviser would be damaged if she pushed beyond the consensus recommendation.


      Since 2009, some economists have insisted that the stimulus was too small. White House defenders have responded that a larger stimulus would not have moved through Congress. But the Summers memo barely mentioned Congress, noting only that his recommendation of a stimulus above six hundred billion dollars was “an economic judgment that would need to be combined with political judgments about what is feasible.”

      He offered the President four illustrative stimulus plans: $550 billion, $665 billion, $810 billion, and $890 billion. Obama was never offered the option of a stimulus package commensurate with the size of the hole in the economy––known by economists as the “output gap”––which was estimated at two trillion dollars during 2009 and 2010. Summers advised the President that a larger stimulus could actually make things worse. “An excessive recovery package could spook markets or the public and be counterproductive,” he wrote, and added that none of his recommendations “returns the unemployment rate to its normal, pre-recession level. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.”

      This guy named Krugman expressed concern at the time:
      Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

      Yet the centrists did their best to make the plan weaker and worse.

      One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

      The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.

      The president essentially got what he asked for w/ the Stim.  Even worse, he's still vigorously defending the guy who made the Stim too small:
      Speaking up for a contentious former aide, President Barack Obama pushed back Wednesday against liberal Democrats who are urging the president not to pick Lawrence Summers to run the Federal Reserve.

      In a closed-door session with House Democrats, Obama offered what participants in the meeting described as a keen defense of Summers after being pressed by Rep. Ed Perlmutter of Colorado about his controversial consideration of Summers to replace the Fed's outgoing chairman, Ben Bernanke. The defense continued at the White House, where press secretary Jay Carney said Summers had "stood shoulder to shoulder" with Obama during an economic crisis.

      "He made decisions and put forth the policies that helped reverse the tragic economic decline that this country faced in the beginning of 2009," Carney said, adding that Obama's kind words about his former aide shouldn't be misconstrued as an omen about whether Obama would pick him for the top Fed post.

      Whether or not Summers is eventually picked is, in this context, secondary to the fact that, to this day, the WH publicly proclaims that he did a bang-up job back then.  They still think that a Stim that they were warned was too small at the time was just right.  The argument that the president "wanted more" has no basis in fact.

      Some men see things as they are and ask why. I dream of things that never were and ask why not?

      by RFK Lives on Sun Aug 04, 2013 at 07:26:23 AM PDT

      [ Parent ]

      •  Christine ROmer wanted a 1.6b stim (2+ / 0-)
        Recommended by:
        JVolvo, RFK Lives

        she was incoming WH Econ Advisors. Dean Baker wanted 1.2 billion.

        And the 800 billion we got was hardly real stim, only 175 billion was for infrastructure. Using a multiplier of 2.5 it created 4.2 million jobs. None of the other 625 billion really created any new jobs.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Sun Aug 04, 2013 at 01:03:56 PM PDT

        [ Parent ]

    •  Just because ATMs replaced tellers (1+ / 0-)
      Recommended by:
      Hillbilly Dem

      does not mean that people don't WANT to still go to human tellers.

      The banks have forced us to use the ATMs and fired the human employees to save money on the bottom line.

      Sure, they are a convenience if you just want to pull money out of an account, but it's difficult to use one for multiple complicated transactions or various kinds of accounts. And some people just want a real, live person to hand their money to -- not some faceless machine that might eat their deposit and give no proof that the transaction was properly recorded.

      "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

      by Brooke In Seattle on Sun Aug 04, 2013 at 09:51:15 AM PDT

      [ Parent ]

      •  Just because ATMs replaced tellers doesn't (0+ / 0-)

        mean that only Executives and Stock owners should reap the benefit of increased productivity.

        Mr. Universe is a known degenerate Robotophile, and his sources include former Browncoat Traitors. What is their agenda in leaking top secret information about the Reavers and endangering us all?

        by JesseCW on Sun Aug 04, 2013 at 10:54:31 AM PDT

        [ Parent ]

    •  There's a simple answer. Clear as fucking day. (2+ / 0-)
      Recommended by:
      Roger Fox, JVolvo

      Not one of the corporate assholes Obama golfs with and put on his "Jobs Council" will ever suggest it.

      Tax the profits that resulted from the increased productivity created by the capital investment in that ATM machine or Self-Serve checkout machine, and hire more teachers.   Hire young people to plant trees. Hire more cops and outlaw police except in declared emergencies.  

      Slash the work week and raise the minimum wage.

      Demand employers use that increased productivity to shoulder more of the health care burden.

      You think his stacked "Jobs Council" is going to come up with that simple proven solution?


      He "wanted more"?  How the fuck do you know?  He got the stimulus he asked for, slanted just a bit more heavily toward tax incentives.

      He followed Rahms Advice to "Fuck the UAW" and destroyed the promises made to workers while protecting executive compensation.  You think that deserves a cookie?

      I don't know if you noticed, but Detroit is bankrupt.  That how well he "saved" it.  

      Then you fall back on the excuse of Tea Party that had no political power for the first two years?  That only got political power because President Obama grinned widely and told a nation of unemployed people that "the car is out of the ditch" while claiming to have "prevented a Depression"?

      You're as willfully out of touch as the NeoLiberals you support.

      Mr. Universe is a known degenerate Robotophile, and his sources include former Browncoat Traitors. What is their agenda in leaking top secret information about the Reavers and endangering us all?

      by JesseCW on Sun Aug 04, 2013 at 10:53:23 AM PDT

      [ Parent ]

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