Who Will Speak for the Rich?

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Paul Krugman on the recent outbreak of arguments that America’s unemployment problem is structural and can’t be fixed anytime soon:

Claims that there has been a huge jump in structural unemployment — that is, unemployment that can’t be cured by increasing aggregate demand — are playing a large role in the argument that we should basically do nothing in the face of a terrible economy. No need for the Fed to do more; no need for more fiscal stimulus — hey, it’s all about defective labor markets, and we should work on structural reform, one of these days. And don’t expect improvement for years to come. Structural unemployment is invoked by Fed presidents who want to raise rates, not cut them, by economists who want austerity now now now, and in general by almost everyone in the pain caucus.

….I really don’t think there’s any way to make sense of the fuss about structural unemployment unless you posit that a lot of influential people are looking for reasons not to act. Based on everything we know, this just shouldn’t be an issue. What the economy needs is more demand; provide that, and you’ll be amazed at how many willing, productive workers there are, currently sitting idle.

Italics mine. And yes, of course lots of influential people are looking for reasons not to act. Our economic discourse of the past 30 years has been almost exclusively defined by an endless succession of shiny new arguments from conservatives that provide an intellectual superstructure for policies that favor business interests and the rich. Arguments on trade, arguments on taxes, arguments on unions, arguments on the minimum wage, arguments on financial deregulation, arguments on income inequality, and arguments on environmental rules. Lately, it’s mostly been arguments on deficits and unemployment. And always couched in technical terms of capital formation, liquidity, credit allocation, globalization, comparative advantage, crowding out, multipliers, solar forcing levels, Gaussian copulas, labor market rigidities, alternative measures of inflation, deadweight losses, default premia, and hedonic adjustments.

That’s for the chattering classes, of course. For the rubes it’s socialism and arrogant elites and death panels.

After all, except on rare occasions when their tongues slip, they can hardly come right out and say that what they really care about is making sure that rich people continue to grab an ever bigger share of the economic pie, can they? And the fact that all of their arguments just happen to promote exactly that? Just a coincidence, my friends, just a coincidence.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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