Americans Who’ll Never Work Again
July 8, 2010
David P. Goldman
How many Americans will never work again? Perhaps a lot. A close look at the Bureau of Labor Statistics’ Current Population Survey raises some alarming questions about the prospects of significant parts of the American population.
Thirteen percent of Americans twenty-five years and over without a high school diploma were unemployed in June (down from a peak of 17.9 percent in February, but much of that decline was due to a fall in the labor force participation rate from 62.4 percent in February to 61.4 percent in June). Ten percent of workers with only a high school diploma, were unemployed in June. Workers with a Bachelor’s degree, by contrast, had an unemployment rate of only 4.5 percent that month.
For African Americans over twenty years of age, the official unemployment rate in June stood at 17 percent. Most striking, only 58 percent of African-American men over twenty are employed, compared to 67.7 percent in 2000. For white Americans over twenty, the employment-population ratio fell from 64.9 percent in 2002 to 60.2 percent in 2009, a far smaller decline. There is almost no decline for Hispanics; the employment-population ratio stayed around 68 percent between 2000 and 2009.
The data suggest that black men with a high school education or less are dropping through the cracks in the economy. Adjusting for the decline in the employment-population ratio, the true unemployment rate for African-American men probably stands close to 30 percent. That is a frightening number.
Another striking data point is the collapse of employment for labor-force entrants aged sixteen to nineteen years. Jobseekers of this age have a low educational level and seek unskilled positions. In 2000, 45 percent of this population was in the labor force, but by 2009 the level had dropped almost to 28.4 percent. While unskilled workers of all ages are having difficulty finding work, young unskilled workers are finding it even harder.
Why is this significant? Unemployment for African Americans and those with less education has always been higher than for others, but most were eventually employed. The economic crisis has only magnified the differences. That would be bad enough. As matters stand, many of these workers may never find a steady job again.
As of June, 6.4 million Americans were on unemployment for more than 27 weeks, and the average duration of unemployment doubled from sixteen weeks in early 2008 to 32 weeks in June. These figures are, for the workers we are discussing, only going to get worse. Americans without educational qualifications are suffering levels of unemployment on the scale of the Great Depression, and for them that Depression may never end.
The sectors of the economy in which workers with less educational attainment were likely to find employment will continue to shrink. Foremost among these is home construction, where recovery may be decades away. By some estimates the US faces a 40 percent oversupply of large lot family homes by 2020, as the great retirement wave of the Baby Boomers leaves empty nesters with larger homes than they require.
Another sector is state and municipal employment. A significant proportion of job losses during the next several years will include unskilled workers employed by local governments.
Why should the discrepancy between white college-educated workers and others be so great? The world economy has changed, permanently. America once enjoyed a monopoly as a destination for capital and labor. The world’s savings poured into America during the 1990s and 2000s, contributing among other things to the homebuilding boom that employed many of the unskilled.
The fall of communism in 1989 and the incorporation of many countries from what we used to call the Third World into the global economy have eroded that monopoly. It has sharply reduced the number of jobs in manufacturing, which now employs only 15 percent of the workforce, and no longer offer unskilled labor an entry-point into the labor force. Again, the end of the housing boom and the decline in public employment in the wake of the financial crisis have also closed off other sources of employment.
There are three ways the situation could evolve, and two of them are bad. The first is that the American underclass might expand drastically, with attendant social and political problems. The second is that we will revert to methods last used during the Great Depression, when the Civilian Conservation Corps employed a tenth of America’s young men, encouraging the growth of government as an employer, even though governments are bad at providing jobs and the economy cannot sustain such programs.
The third way is the restoration of an economic regime that promotes entrepreneurship. The employment situation will not improve until small businesses begin to hire. In America’s creative-destruction economy, jobs lost by big companies usually are lost forever; they are replaced by jobs created by startups. Startups created two-thirds of all new jobs in the U.S. during the past three decades. This is the only real hope for the unskilled — but small business remains dead in the water.
We simply don’t know whether the next wave of entrepreneurship—if we are able to launch it—will absorb the millions of young, less-educated men who seem lost to economic activity. I fear that something like Roosevelt’s CCC may be required, despite my conservative’s aversion to government spending. There is, after all, a good deal of infrastructure to be repaired.
David P. Goldman is a senior editor of First Things and author of the Spengler blog as well as the Spengler column in the Asia Times.
RESOURCES
Bureau of Labor Statistics’ Current Population Survey
David P. Goldman, The Long Term Employment Bust
David P. Goldman, Clinton as Cargo Cult
Spengler, Bah, Humbug, and Labor Statistics
Comments:
7.8.2010 | 7:00am
sanpietrini says:
I am quite sure the economy has changed - what hasn't? Well, one of those other things that has changed is the "work ethic." Like Gordon, I am 56, and have always had a job - seldom a job that excited me, but always a paycheck. While I'd dearly love to stop exchanging my days for dollars (and nothing else), I don't see that happening for at least 10 years if not longer; too many others are depending on my paycheck for their bread (literally). And that's ok - not great, but ok.
I just don't see the "roll up your sleeves" and be responsible for yourself in the younger workforce anymore. Sure, things have changed, and one of those things is the desire to contribute something. Much more frighening than the economy, the mindset is more "what can I get," and less "what can I give."
I just don't see the "roll up your sleeves" and be responsible for yourself in the younger workforce anymore. Sure, things have changed, and one of those things is the desire to contribute something. Much more frighening than the economy, the mindset is more "what can I get," and less "what can I give."
7.8.2010 | 7:00am
Stuart Koehl says:
The problem is really two-fold: on the one hand, the failure of the public schools to provide an adequate education to the majority of students who attend them; and on the other hand, the rise in credentialism that pushes unqualified students to seek a four-year undergraduate degree as the passport to a "good job".
The former is undoubtedly due to the stranglehold of the iron triangle of teachers unions, education schools and the Democratic party upon the form and substance of public education, resulting in a lack of standards, a lack of accountability and a lack of performance. One unfortunate result of their monopoly has been the doctrine that "every child should go to college"--which is, of course, arrant nonsense. Not every person has the intelligence or aptitude to attend college. Not every person who does has the desire or inclination to do so. Yet we keep trying to shoehorn these people into a pedagogical model that does not fit them, because of the mistaken belief that "a college degree is the gateway to a good job".
Part of that belief comes from mirror imaging on the part of the educational elite: their idea of a "good job" is one the resembles their jobs; since they had to go to college to get their jobs, everybody has to go to college. But the greater responsibility rests with the business community. In response to the collapse of the public education system, in which a high school diploma is not worth the paper on which it is printed, and in which vocational training is neglected, businesses have taken to using a bachelor's degree as a screening mechanism, the assumption being someone who can stick it through four years of college has some degree of self-discipline and a minimal capacity to be trained. College is the new high school. Most of the jobs today requiring a bachelor's degree do not in any way call upon the knowledge or skills one ought to have acquired along with such a degree. Yet we send kids off to college, at the cost of tens of thousands of dollars (even for state schools) to pick up the magic sheepskin.
As colleges deal with the increasing number of marginal students entering their institutions, the quality of instruction and the content of the curriculum has become devalued (see the proliferation of courses ending in the word "studies"). Unless one goes into the hard sciences or a technical discipline (e.g., foreign languages), one can go through the entire four years of undergraduate education without taking a single rigorous class. Pretty soon, a BA will be worth as much as a high school diploma is today.
We need to reinject some common sense into our educational policies, instead of looking to a utopian future in which every child has a BA in English Lit, or Women's Studies, or Anime, or whatever. The first step is recognizing most people don't need a college education and don't belong in college. What they need is suitable vocational education, and here Charles Murray's proposal that various trades and industries set up certification programs has real merit.
A certificate would cost a fraction of a four year degree, would be tightly focused on skills needed to perform a specific type of job, and would skip the extraneous requirements that have no meaning to people who are not interested in a liberal arts education. A certificate program could be completed either in high school, or in a year or two afterwards, allowing people to enter the workforce at 18-20, instead of 22-24. A certificate would not require a student to go deeply into debt, but would allow him to begin earning a meaningful wage very quickly, which would also put him in a position to marry and begin a family sooner. Since trades and industries would set the standards for certification, requirements would evolve to keep pace with changing technology, and establish in workers the habit of life-long education (something taken for granted in the professions).
Some (mainly on the left) will complain that this will lead to a system of "apartheid", in which minority children are shunted into a vocational "track" that will lead them into a lifetime of low-paying manual labor. Bunk! Check what your plumber, electrician, heating and air conditioning technician, or auto mechanic charges. They frequently pull down a lot more than your liberal arts grad now working retail at Banana Republic--and they don't have $100 K in student loans to pay off.
And, as if it needs a Good Housekeeping Seal of Approval, this kind of two-track system, combined with certificate and apprenticeship programs, is found in almost every one of the social democratic countries of Western Europe that liberal normally want us to emulate. Stripped of those countries' rigid and restrictive labor laws (which are largely responsible for their high structural unemployment), a similar system in the United States would create many new opportunities for the underclass and chronically under-employed, and go a long way to rectifying the problems that afflict the very people about whom Goldman worries so much.
The former is undoubtedly due to the stranglehold of the iron triangle of teachers unions, education schools and the Democratic party upon the form and substance of public education, resulting in a lack of standards, a lack of accountability and a lack of performance. One unfortunate result of their monopoly has been the doctrine that "every child should go to college"--which is, of course, arrant nonsense. Not every person has the intelligence or aptitude to attend college. Not every person who does has the desire or inclination to do so. Yet we keep trying to shoehorn these people into a pedagogical model that does not fit them, because of the mistaken belief that "a college degree is the gateway to a good job".
Part of that belief comes from mirror imaging on the part of the educational elite: their idea of a "good job" is one the resembles their jobs; since they had to go to college to get their jobs, everybody has to go to college. But the greater responsibility rests with the business community. In response to the collapse of the public education system, in which a high school diploma is not worth the paper on which it is printed, and in which vocational training is neglected, businesses have taken to using a bachelor's degree as a screening mechanism, the assumption being someone who can stick it through four years of college has some degree of self-discipline and a minimal capacity to be trained. College is the new high school. Most of the jobs today requiring a bachelor's degree do not in any way call upon the knowledge or skills one ought to have acquired along with such a degree. Yet we send kids off to college, at the cost of tens of thousands of dollars (even for state schools) to pick up the magic sheepskin.
As colleges deal with the increasing number of marginal students entering their institutions, the quality of instruction and the content of the curriculum has become devalued (see the proliferation of courses ending in the word "studies"). Unless one goes into the hard sciences or a technical discipline (e.g., foreign languages), one can go through the entire four years of undergraduate education without taking a single rigorous class. Pretty soon, a BA will be worth as much as a high school diploma is today.
We need to reinject some common sense into our educational policies, instead of looking to a utopian future in which every child has a BA in English Lit, or Women's Studies, or Anime, or whatever. The first step is recognizing most people don't need a college education and don't belong in college. What they need is suitable vocational education, and here Charles Murray's proposal that various trades and industries set up certification programs has real merit.
A certificate would cost a fraction of a four year degree, would be tightly focused on skills needed to perform a specific type of job, and would skip the extraneous requirements that have no meaning to people who are not interested in a liberal arts education. A certificate program could be completed either in high school, or in a year or two afterwards, allowing people to enter the workforce at 18-20, instead of 22-24. A certificate would not require a student to go deeply into debt, but would allow him to begin earning a meaningful wage very quickly, which would also put him in a position to marry and begin a family sooner. Since trades and industries would set the standards for certification, requirements would evolve to keep pace with changing technology, and establish in workers the habit of life-long education (something taken for granted in the professions).
Some (mainly on the left) will complain that this will lead to a system of "apartheid", in which minority children are shunted into a vocational "track" that will lead them into a lifetime of low-paying manual labor. Bunk! Check what your plumber, electrician, heating and air conditioning technician, or auto mechanic charges. They frequently pull down a lot more than your liberal arts grad now working retail at Banana Republic--and they don't have $100 K in student loans to pay off.
And, as if it needs a Good Housekeeping Seal of Approval, this kind of two-track system, combined with certificate and apprenticeship programs, is found in almost every one of the social democratic countries of Western Europe that liberal normally want us to emulate. Stripped of those countries' rigid and restrictive labor laws (which are largely responsible for their high structural unemployment), a similar system in the United States would create many new opportunities for the underclass and chronically under-employed, and go a long way to rectifying the problems that afflict the very people about whom Goldman worries so much.
7.8.2010 | 8:26am
John Wickey says:
What we are witnessing is the fruit of the cultural changes of the post fifty years. A sizeable segment of our youth have grown up without fathers or fathers of their own. They have been socially educated in the public schools to not respect parental moral standards, challenging particularly the authority of their fathers. Their respect for their parents, particularly their fathers, is less than that of previous generations. The public schools have also taught them to conduct themselves as they like, that moral expectations are situation determined, and that no matter what they do or how well they do, they need to think of themselves as good people. Their parents have indulged their wishes as they were growing up and the public school has taught them to not be critical of themselves or their efforts. They have been taught that religion is ephemeral, having little to do with substantive moral issues or the moral foundation of our culture, but that it concerns an extension of feelings, in that God wishes only good for humankind, and that if they feel good about themselves, they are sufficiently spiritual and have God in their hearts. They lack a sense of purpose and are generally not that interested in hard work or the pursuit of a difficult future. They lack a broad knowledge of the world or history. Further, their judgment is generally faulty when it comes to the management of their lives or their money. They contribute to the costs of social dysfunction in the form of social services and prison space. Unfortunately, they also are the future, in that the proportion of such youth in our population will likely increase. Government programs will not help a great deal. An improving economy would somewhat mitigate the problems of absorbing this population into the productive society, though not much. The underlying ideas that have resulted in our present cultural trends need to be re-examined.
7.8.2010 | 8:26am
dissident says:
That's funny you say that Gordon, since there are many anecdotes of overqualified degreed candidates these days settling for anything. I'm an intern myself and I feel underpaid and overworked compared to the rest that have been employed for a while. But I guess everyplace is different.
If the military ever experiences wage pressures, they'll have an army of unemployed to choose from, should we ever need a lot more..
If the military ever experiences wage pressures, they'll have an army of unemployed to choose from, should we ever need a lot more..
7.8.2010 | 10:24am
William L. Harnist says:
It is obvious that the Federal Government's intention is to create a permanent segment of the population to be on the "dole," much like the UK has. This will solidify the government's power over a huge portion of the economy.
7.8.2010 | 11:29am
Edward Alleyn says:
I imagine (i. e., I don't know for sure) that there are many PhD graduates in, say, Cultural or Women's Studies who are driving taxis. Still, some people are catching on to what's happening. For example, just yesterday I met a young woman who has a bachelor's degree in History and is now working on an MBA — she said she wanted to combine a liberal arts degree and a more practical degree.
"Highly trained graduates in English literature" has become an oxymoron, in my experience.
Please forgive me if I seem a one topic contributor, but surely the 11 million or so ILLEGAL ALIENS figure in this discussion. How many of them are holding jobs that citizens and legal immigrants could use?
"Highly trained graduates in English literature" has become an oxymoron, in my experience.
Please forgive me if I seem a one topic contributor, but surely the 11 million or so ILLEGAL ALIENS figure in this discussion. How many of them are holding jobs that citizens and legal immigrants could use?
7.8.2010 | 11:45am
Matt says:
According to one study I read, people over 45 who are better-educated are also struggling to find work. Perhaps this is in part because 500,000 jobs left the country in the early 2000s, many of them high-tech jobs to India and China.
Green energy and health care are two fields set for growth. With the realization growing that anthropogenic global warming is real, the disaster in the Gulf, and dependence on Middle East oil a source of constant problems, motivation to produce green energy is growing. More people receiving health care means a greater need for doctors and nurses. I hope that, as a country, we can provide the infrastructure and education to grow these industries. I also like David Goldman's idea of providing a CCC-type of enterprise to repair our country's neglected infrastructure. This would be a perfect time to start laying the foundation for new types of energy production.
We came very close to another Great Depression, and it's going to take a long time for the economy to recover. I have great faith in the American exceptionalism and spirit of innovation I expect to take us into new economic territory.
Green energy and health care are two fields set for growth. With the realization growing that anthropogenic global warming is real, the disaster in the Gulf, and dependence on Middle East oil a source of constant problems, motivation to produce green energy is growing. More people receiving health care means a greater need for doctors and nurses. I hope that, as a country, we can provide the infrastructure and education to grow these industries. I also like David Goldman's idea of providing a CCC-type of enterprise to repair our country's neglected infrastructure. This would be a perfect time to start laying the foundation for new types of energy production.
We came very close to another Great Depression, and it's going to take a long time for the economy to recover. I have great faith in the American exceptionalism and spirit of innovation I expect to take us into new economic territory.
7.8.2010 | 11:53am
David Goldman says:
Some part of the problem is undoubtedly due to poor education, demoralization, social pathologies, and so forth. But that does not explain the whole picture. A great deal of the pain is being felt by solid working-class families who were accustomed to a high price for American labor in the past, and now are beached by the global economic tide. There simply isn't enough granularity in the BLS data to assign numbers to these different factors. What is important, in my view, is to keep in mind that we are not dealing with a conventional business cycle, in which GM first lays off workers and then hires them back. On several levels (demographic, technological, social) we have hit an air pocket. Prof. Edmund Phelps, a Nobel laureate in economics, calls it a "structural slump."
7.8.2010 | 12:44pm
Bob G says:
A wonderful summary of the jobs situation by Mr. Goldman.
Then a host of commentators jumped in to say the "real" cause of trouble is cultural, mainly the decline of the work ethic.
Mr. Goldman really hit the target when he said "we are not dealing with a conventional business cycle." But this isn't just an "air pocket" either. Our whole conception of how the economy operates has been subtly wrong for almost 200 years. That false conception was necessary so that the economy could become the organizing principle of our culture. But those days are over. This economy will be going down for years until we admit what is really wrong. Alan Greenspan came close a week or so ago, when he said we need a whole new "model" of how to fit the pieces together. But he has no idea how that model would look. This is a new ball game, folks, but it's no longer just an "economics" ball game; it's a cultural ball game in which the Church, if it only realized it, could have a powerful advantage. The media are (rightly) beating up on the Church at present, but the media have no idea what kind of sinkhole they (the secularists) are sitting on. We are heading into a profound cultural shift unlike anything seen in the last 500 (sic) years--and that includes the Enlightenment.
Then a host of commentators jumped in to say the "real" cause of trouble is cultural, mainly the decline of the work ethic.
Mr. Goldman really hit the target when he said "we are not dealing with a conventional business cycle." But this isn't just an "air pocket" either. Our whole conception of how the economy operates has been subtly wrong for almost 200 years. That false conception was necessary so that the economy could become the organizing principle of our culture. But those days are over. This economy will be going down for years until we admit what is really wrong. Alan Greenspan came close a week or so ago, when he said we need a whole new "model" of how to fit the pieces together. But he has no idea how that model would look. This is a new ball game, folks, but it's no longer just an "economics" ball game; it's a cultural ball game in which the Church, if it only realized it, could have a powerful advantage. The media are (rightly) beating up on the Church at present, but the media have no idea what kind of sinkhole they (the secularists) are sitting on. We are heading into a profound cultural shift unlike anything seen in the last 500 (sic) years--and that includes the Enlightenment.
7.8.2010 | 1:37pm
fresh iced tea says:
Mr. Goldman, I'd be very interested in your take on the relationship between the cost of health care coverage for the 50+ age group and the difficulty of this group to find permanent employment in the current job market. Anecdotally speaking it is next to impossible even for those with marketable skills. Work as a temp and you spend most of the paycheck on coverage at exhorbitant rates; remain jobless and you may be eligible for state-subsidised coverage but then there's no way to cover the mortgage. Even with a gonzo work ethic we don't get a second look.
7.8.2010 | 1:38pm
Bob G says:
Everyone realizes by now that Mr. Goldman is a polymath. The drawback in that condition is a tendency to spread oneself too thinly.
Mr. Goldman, as part of your excellent analysis, why not point out the obvious: that if the younger generation on which the retirement, even solvency, of the older generations obviously depends cannot even find jobs, that spells ruin for the elders as well? By refusing to retire after the destruction of their retirement savings, the generations that have jobs are making the situation worse even for those coming out of college. So even education will not save them. Catch 22. There is no way out of this by conventional or even known means--except perhaps by the rapid appearance of some new hi-tech savior on which many are now pinning their hopes. It won't happen: as Greenspan says, the ever growing debt problem ensures that even the markets for such a savior will be unable to lift the load.
Mr. Goldman, as part of your excellent analysis, why not point out the obvious: that if the younger generation on which the retirement, even solvency, of the older generations obviously depends cannot even find jobs, that spells ruin for the elders as well? By refusing to retire after the destruction of their retirement savings, the generations that have jobs are making the situation worse even for those coming out of college. So even education will not save them. Catch 22. There is no way out of this by conventional or even known means--except perhaps by the rapid appearance of some new hi-tech savior on which many are now pinning their hopes. It won't happen: as Greenspan says, the ever growing debt problem ensures that even the markets for such a savior will be unable to lift the load.
7.8.2010 | 1:52pm
claudio says:
Here in Europe, the failure of the social democratic model of education (based on the constructivist learning theory) has made the schools more classist than ever. The poor people are the ones more in need of the help than education can provide.
This joke explains it very well:
http://www.youtube.com/watch?v=kGA11A340Ck
This joke explains it very well:
http://www.youtube.com/watch?v=kGA11A340Ck
7.8.2010 | 1:54pm
Stuart Koehl says:
I think Mr. Goldman, like many people, errs in considering the period of 1945-1975 somehow to be economically normative, rather than being the extraordinary exception that they were. Prior to World War II, U.S. wages were more or less on par with wages in other industrialized countries. The War changed everything. In the first place, with its excess industrial capacity and isolation from hostile powers, the United States was able to act as "arsenal of democracy" without fear of strategic bombardment. It emerged from the war with its hard currency reserves at an all time high, and the only intact industrial base in the world.
For the following three decades, the United States held an unprecedented position of economic leadership while the rest of the world either rebuilt its industrial capacity (as in Europe and Japan) or began building one from scratch (as in much of Asia and later Latin America). During this time, America could afford to be sloppy, paying its workers far more than their peers in other countries, providing them with benefits far beyond what was sustainable, and getting complacent about essentials like industrial processes and quality control.
One concomitant of this extraordinary period was the plethora of semi-skilled production line manufacturing jobs that allowed young men, with nothing more than high school diplomas (granted, diplomas that were still worth something) to get high-paying jobs with generous benefits and (thanks to union contracts) almost guaranteed lifetime employment. Before World War II, American men tended to marry around age 25 (women married around 20-22). In the period between 1945 and 1965, that figure dropped to 22 for men and 18 for women. This was possible because (a) the tax burden was low; and (b) the abundance of high-paying entry-level jobs.
By 1975, the rest of the world was catching up, and the fat years were over.
As was the case before the War, the United States now had to compete in a global marketplace, only now it was the one with the obsolescent industrial plant and protected work force. From the 1980s through 2005, capitalist renewal allowed America to become the leading economic force once more. But there would be casualties, of course.
The manufacturing sector suffered the hardest because it had the most fat to cut. It was not a matter of the U.S. exporting manufacturing jobs overseas; the manufacturing sector in almost every country shed jobs in the decades since the mid-1960s, because automation is more efficient, and because, truth be told, assembly line jobs are boring and dangerous--machines do them much better, improving quality and reducing costs along the way. As a percentage of GDP, the U.S. economy gets as much from manufacturing today as it did four decades ago. It just employs fewer people. Complaining about the loss of manufacturing jobs is like complaining about the loss of agricultural jobs--without taking into account how much more productive the agricultural sector is today.
I anticipate that manufacturing will continue to shed jobs, while still maintaining roughly the same level of output. In Europe, the process is further along due to restrictive labor laws aimed (ironically) at protecting manufacturing jobs. Since it is expensive to employ a worker and almost impossible to fire one, European companies have eschewed low value added production and focused on complex products that leverage skilled labor. And when they need to increase production, the invest in more industrial automation, not in headcount.
So what opening is there for the lower half of the bell curve? There are only so many service jobs that will open, and the "knowledge-based economy" Robert Reich liked to talk up will never employ the vast majority of workers who just don't have the smarts to do the work. Part of the solution lies in the rediscovery of craftsmanship--small-scale, customized manufacturing, as well as in the maintenance and repair of manufactured products. Its in this area, as well as in residual industrial manufacturing, that the notion of a certification program makes the most sense. A good carpenter, plumber, electrician, welder, or appliance technician is worth his weight in gold.
Of course, entrepreneurship is at the heart of this sector of the economy, as well the innovation sector of which Mr. Goldman writes. I doubt that we are in a structural slump, so much as we are in a government-induced hiatus caused by a combination of debt- and regulation-induced credit crunch and lingering uncertainty with regard to the Administration's legislative agenda--which appears to be hostile to all forms of productive activity not directly or indirectly controlled by the government. Until that cloud is removed, the economy will stay mired in a rut. Had the Administration not tried to implement its aggressively anti-business agenda or intervene actively in the business cycle, it is likely the economy would have recovered much more rapidly, and without incurring any crippling debt burden.
To use a 1930s analogy, FDR's New Deal might have been more flashy and dramatic, but Neville Chamberlain's stodgy policies of fiscal restraint brought Britain out of the Depression a lot more quickly. Had not Hitler and Tojo saved Roosevelt's bacon by declaring war on us (the best of all possible stimulus programs!), Keynsian economic would have been discredited much sooner, and Chamberlain, instead of being remembered as a failed war leader, would be remembered as a successful economic leader.
For the following three decades, the United States held an unprecedented position of economic leadership while the rest of the world either rebuilt its industrial capacity (as in Europe and Japan) or began building one from scratch (as in much of Asia and later Latin America). During this time, America could afford to be sloppy, paying its workers far more than their peers in other countries, providing them with benefits far beyond what was sustainable, and getting complacent about essentials like industrial processes and quality control.
One concomitant of this extraordinary period was the plethora of semi-skilled production line manufacturing jobs that allowed young men, with nothing more than high school diplomas (granted, diplomas that were still worth something) to get high-paying jobs with generous benefits and (thanks to union contracts) almost guaranteed lifetime employment. Before World War II, American men tended to marry around age 25 (women married around 20-22). In the period between 1945 and 1965, that figure dropped to 22 for men and 18 for women. This was possible because (a) the tax burden was low; and (b) the abundance of high-paying entry-level jobs.
By 1975, the rest of the world was catching up, and the fat years were over.
As was the case before the War, the United States now had to compete in a global marketplace, only now it was the one with the obsolescent industrial plant and protected work force. From the 1980s through 2005, capitalist renewal allowed America to become the leading economic force once more. But there would be casualties, of course.
The manufacturing sector suffered the hardest because it had the most fat to cut. It was not a matter of the U.S. exporting manufacturing jobs overseas; the manufacturing sector in almost every country shed jobs in the decades since the mid-1960s, because automation is more efficient, and because, truth be told, assembly line jobs are boring and dangerous--machines do them much better, improving quality and reducing costs along the way. As a percentage of GDP, the U.S. economy gets as much from manufacturing today as it did four decades ago. It just employs fewer people. Complaining about the loss of manufacturing jobs is like complaining about the loss of agricultural jobs--without taking into account how much more productive the agricultural sector is today.
I anticipate that manufacturing will continue to shed jobs, while still maintaining roughly the same level of output. In Europe, the process is further along due to restrictive labor laws aimed (ironically) at protecting manufacturing jobs. Since it is expensive to employ a worker and almost impossible to fire one, European companies have eschewed low value added production and focused on complex products that leverage skilled labor. And when they need to increase production, the invest in more industrial automation, not in headcount.
So what opening is there for the lower half of the bell curve? There are only so many service jobs that will open, and the "knowledge-based economy" Robert Reich liked to talk up will never employ the vast majority of workers who just don't have the smarts to do the work. Part of the solution lies in the rediscovery of craftsmanship--small-scale, customized manufacturing, as well as in the maintenance and repair of manufactured products. Its in this area, as well as in residual industrial manufacturing, that the notion of a certification program makes the most sense. A good carpenter, plumber, electrician, welder, or appliance technician is worth his weight in gold.
Of course, entrepreneurship is at the heart of this sector of the economy, as well the innovation sector of which Mr. Goldman writes. I doubt that we are in a structural slump, so much as we are in a government-induced hiatus caused by a combination of debt- and regulation-induced credit crunch and lingering uncertainty with regard to the Administration's legislative agenda--which appears to be hostile to all forms of productive activity not directly or indirectly controlled by the government. Until that cloud is removed, the economy will stay mired in a rut. Had the Administration not tried to implement its aggressively anti-business agenda or intervene actively in the business cycle, it is likely the economy would have recovered much more rapidly, and without incurring any crippling debt burden.
To use a 1930s analogy, FDR's New Deal might have been more flashy and dramatic, but Neville Chamberlain's stodgy policies of fiscal restraint brought Britain out of the Depression a lot more quickly. Had not Hitler and Tojo saved Roosevelt's bacon by declaring war on us (the best of all possible stimulus programs!), Keynsian economic would have been discredited much sooner, and Chamberlain, instead of being remembered as a failed war leader, would be remembered as a successful economic leader.
7.8.2010 | 1:55pm
Stuart Koehl says:
Ah, Bob--still dreaming the distributionist, communitarian dream.
7.8.2010 | 2:52pm
frank says:
This article and several posters touched upon what I consider a principal, if not the root, cause of much of this, too much government generally with public schooling deep in the mix. The late 20th century public school experience bears little similarity to that which preceded. These articles on eliminating the public schools struck a cord with me, though I am certain that inertia will prevent this approach from even being tried,
http://www.lewrockwell.com/orig10/galvin4.1.1.html
http://www.lewrockwell.com/orig10/galvin5.1.1.html
http://www.lewrockwell.com/orig10/galvin4.1.1.html
http://www.lewrockwell.com/orig10/galvin5.1.1.html
7.8.2010 | 3:03pm
Bob G says:
To Stuart Koehl: I admire your very concise and informative post. The 1945-1970 (Keynesian) period many economists consider normative worked for the US because all the other post-war economies were prostrate and had no choice but to pay the prices we charged them. So that situation actually was an anomaly.
As to the "distributionist, communitarian dream" I supposedly admire: I guess it's inevitable that a conventional economist such as you would reach for the clichés. Chesterton and Belloc were distributists, though, and the current pope is an economic communitarian. Hmmm.
I think the Achilles' heel of your argument is the claim that had Obama not acted as he did (stimulus, etc.) the economy would have quickly recovered on its own. This is a fantasy. If Bush or any Republican had been in office he/she would have done essentially the same. Otherwise the economy would have collapsed to the ground, taking the rest of the world with it. It's very possible, though, that the intervention only kicked the can down the road. Your dismissal of the need to do something drastic and unprecedented shows you don't understand what happened: the Capitalist economy had reached the end of its road--for that economy was above all a cultural phenomenon whose time had run out. Obama did what he "had" to do--but in the long run it solved nothing. And if we follow your counsels we'll bring the calamity upon ourselves even faster. I say your conventional conception that the economy operates by its own own inner laws in a self-encapsulating cocoon is a grand delusion, the greatest of the modern era.
As to the "distributionist, communitarian dream" I supposedly admire: I guess it's inevitable that a conventional economist such as you would reach for the clichés. Chesterton and Belloc were distributists, though, and the current pope is an economic communitarian. Hmmm.
I think the Achilles' heel of your argument is the claim that had Obama not acted as he did (stimulus, etc.) the economy would have quickly recovered on its own. This is a fantasy. If Bush or any Republican had been in office he/she would have done essentially the same. Otherwise the economy would have collapsed to the ground, taking the rest of the world with it. It's very possible, though, that the intervention only kicked the can down the road. Your dismissal of the need to do something drastic and unprecedented shows you don't understand what happened: the Capitalist economy had reached the end of its road--for that economy was above all a cultural phenomenon whose time had run out. Obama did what he "had" to do--but in the long run it solved nothing. And if we follow your counsels we'll bring the calamity upon ourselves even faster. I say your conventional conception that the economy operates by its own own inner laws in a self-encapsulating cocoon is a grand delusion, the greatest of the modern era.
7.8.2010 | 3:07pm
sillyme says:
I think the high unemployment among African Americans has more to do with the illegal immigrants. Where I live, places like MacDonalds and other fast food restaurants, hotel work, food service, were mainly occupied by young African Americans. That has changed over the years and now all I see in those positions is Mexicans/Latinos, many of whom can barely speak English. (And, one thing about Mexicans/Latinos is they DON'T hire African American workers.) It's the same with construction and gardening work. I used to hear a saying that Mexicans take jobs that Americans don't want. I think it should be that they take jobs that used to go to young black kids. But, where I live in Maryland, the change has been very dramatic. It's very sad to watch...
7.8.2010 | 3:13pm
Ben says:
As a twenty-year-old, I feel an obligation to stand up for "the young" in response to some of the criticisms directed at them. I don’t know if I will be able to exonerate them, but I will at least plead for understanding and sympathy.
Before jumping into that, however, I should point out the impossibility of ever characterizing a single generation. There are too many cultures, subcultures, and countercultures in a generation for any one characterization to ever hold. At best, we know only what we see--that is, we might be able to understand people we come into contact with. It is important to remember, then, how much we do not see. I can make no claims to universality--but neither can anyone else. So as intellectually satisfying as it might be to claim that the problem is the failure of public schools, or changes in culture, or a lack of "try," it's best to remember that these explanations can never tell an adequate story. It's also incredibly frustrating to the young, who are justifiably irritated when older people communicate, consciously or not, that they know everything that’s wrong with the younger generation.
With that in mind, I'll try to offer a glimpse into the mind of one young person, and hopefully that will shed a bit of light on the situation. First, I don't think I have an obligation to society to be productive. I think I have an obligation to do God's will, which may or may not involve employment. In short, I'm not asking, "What can I get," but I'm not asking, "What can I give," either. I'm asking, "What can I do?" If money were no object, I would probably be a perpetual volunteer, working for organizations like Habitat for Humanity. Money IS an object, though, and I am hoping to land a job that would allow me to support a family (as the sole breadwinner, if necessary) while still offering positive contributions to society. This is obviously a difficult task, and I’m still trying to figure out a solution. The point, though, is that contrary to what some other posters seem to think, I am convinced it’s wrong to see employment as an ethical imperative. God calls many people to work, but many are called to follow different paths.
Second, several posters have complained that my generation lacks work ethic. I can only speak of what I know, but I’ve found that claim pretty baseless. I think that our attitude towards work is different. I, at least, was never sold on the mythic power of self-reliance and entrepreneurship. Of course you can start your own business—if you can get the capital, and that isn’t easy to come by if you’re fresh out of high school or college. Even if you can get your business up and running, there’s no guarantee you’ll be successful. With the rise of huge corporations, it is harder and harder for small businesses to compete. Granted, there’s no need to start your own business. You can work for someone else. However, with the economy at its worst in living memory, a lot of us, particularly humanities majors, are justifiably nervous about finding an employer. As much as our culture extols the values of self-reliance, a lot of my friends are waking up to the frightening realization that they may not be able to support themselves, let alone anyone else, for years to come. It’s difficult to work day and night when there’s no guarantee that, at the end of the week, you have earned enough to eat.
Finally, and most importantly, I think that most of my generation wants meaning in their work. Each of us draws that desire for meaning from a different source—from a pop-culture induced disdain for normalcy, from a determination to follow one’s dreams no matter the cost, or simply from a conviction that if one is going to spend half of one’s waking hours doing something, it ought to be something deeply important. My own desire for meaning came from an encounter with a Gospel fundamentally opposed to much of modern society. I have always wanted my life—and my job—to be a reflection of that Gospel, and not of the society in which I live. This has put me in the terribly ironic position of being deeply critical of a social order that has benefited me at the expense of others. So when my generation looks at the typical entry-level white collar job, we don’t see the meaning that we crave. We see a dull, painful march from Monday to Friday that drains away our time, energy, and enthusiasm. Of course, the typical job isn’t that awful, but it’s the picture we’ve been raised with, and old prejudices die hard.
It may well be that most of my generation won’t ever find that meaning in their work, and it certainly won’t be the end of the world. We were all told with a relentless optimism, though, that we should find what we loved and do that, and not worry about the money. We’re now reaching the age when we realize that we CAN’T ignore the money. So if my generation seems so lost, have a little compassion for us. We’re being forced to give up long-cherished dreams in order to land some work, any work, and we don’t have much hope that it will get better anytime soon.
Before jumping into that, however, I should point out the impossibility of ever characterizing a single generation. There are too many cultures, subcultures, and countercultures in a generation for any one characterization to ever hold. At best, we know only what we see--that is, we might be able to understand people we come into contact with. It is important to remember, then, how much we do not see. I can make no claims to universality--but neither can anyone else. So as intellectually satisfying as it might be to claim that the problem is the failure of public schools, or changes in culture, or a lack of "try," it's best to remember that these explanations can never tell an adequate story. It's also incredibly frustrating to the young, who are justifiably irritated when older people communicate, consciously or not, that they know everything that’s wrong with the younger generation.
With that in mind, I'll try to offer a glimpse into the mind of one young person, and hopefully that will shed a bit of light on the situation. First, I don't think I have an obligation to society to be productive. I think I have an obligation to do God's will, which may or may not involve employment. In short, I'm not asking, "What can I get," but I'm not asking, "What can I give," either. I'm asking, "What can I do?" If money were no object, I would probably be a perpetual volunteer, working for organizations like Habitat for Humanity. Money IS an object, though, and I am hoping to land a job that would allow me to support a family (as the sole breadwinner, if necessary) while still offering positive contributions to society. This is obviously a difficult task, and I’m still trying to figure out a solution. The point, though, is that contrary to what some other posters seem to think, I am convinced it’s wrong to see employment as an ethical imperative. God calls many people to work, but many are called to follow different paths.
Second, several posters have complained that my generation lacks work ethic. I can only speak of what I know, but I’ve found that claim pretty baseless. I think that our attitude towards work is different. I, at least, was never sold on the mythic power of self-reliance and entrepreneurship. Of course you can start your own business—if you can get the capital, and that isn’t easy to come by if you’re fresh out of high school or college. Even if you can get your business up and running, there’s no guarantee you’ll be successful. With the rise of huge corporations, it is harder and harder for small businesses to compete. Granted, there’s no need to start your own business. You can work for someone else. However, with the economy at its worst in living memory, a lot of us, particularly humanities majors, are justifiably nervous about finding an employer. As much as our culture extols the values of self-reliance, a lot of my friends are waking up to the frightening realization that they may not be able to support themselves, let alone anyone else, for years to come. It’s difficult to work day and night when there’s no guarantee that, at the end of the week, you have earned enough to eat.
Finally, and most importantly, I think that most of my generation wants meaning in their work. Each of us draws that desire for meaning from a different source—from a pop-culture induced disdain for normalcy, from a determination to follow one’s dreams no matter the cost, or simply from a conviction that if one is going to spend half of one’s waking hours doing something, it ought to be something deeply important. My own desire for meaning came from an encounter with a Gospel fundamentally opposed to much of modern society. I have always wanted my life—and my job—to be a reflection of that Gospel, and not of the society in which I live. This has put me in the terribly ironic position of being deeply critical of a social order that has benefited me at the expense of others. So when my generation looks at the typical entry-level white collar job, we don’t see the meaning that we crave. We see a dull, painful march from Monday to Friday that drains away our time, energy, and enthusiasm. Of course, the typical job isn’t that awful, but it’s the picture we’ve been raised with, and old prejudices die hard.
It may well be that most of my generation won’t ever find that meaning in their work, and it certainly won’t be the end of the world. We were all told with a relentless optimism, though, that we should find what we loved and do that, and not worry about the money. We’re now reaching the age when we realize that we CAN’T ignore the money. So if my generation seems so lost, have a little compassion for us. We’re being forced to give up long-cherished dreams in order to land some work, any work, and we don’t have much hope that it will get better anytime soon.
7.8.2010 | 3:29pm
Peter Leavitt says:
Switzerland's unemployment rate at 30 June is 3.9%. The Swiss are relatively a hard-working, well educated population with a low divorce rate, a modest budget deficit, and good entrepreneurial spirit. They, also, benefit from spiritual capital remaining from serious Calvinism and Catholicism, though living off capital is usually not a good idea.
America's problem is indeed structural; we have too many single mothers raising ill disciplined children along with too many fathers in normal families who lack the backbone to insist on high academic standards and discipline. In general we have become an all too flabby nation, physically and spiritually; we are in the requisite process of paying the price for this.
One may regret with David Goldman that all too many Americans are incompetent to work in our present global marketplace. His notion that a better climate for entrepreneurs could help is fine, though the heart of our problem is a certain decadence that defies any mere economic solution.
America's problem is indeed structural; we have too many single mothers raising ill disciplined children along with too many fathers in normal families who lack the backbone to insist on high academic standards and discipline. In general we have become an all too flabby nation, physically and spiritually; we are in the requisite process of paying the price for this.
One may regret with David Goldman that all too many Americans are incompetent to work in our present global marketplace. His notion that a better climate for entrepreneurs could help is fine, though the heart of our problem is a certain decadence that defies any mere economic solution.
7.8.2010 | 3:31pm
Nancy Taylor says:
I see on education. I agree education has its own set of problems. However, 50% of the problems falls back on parents and children. Teachers, parents, and children have to work together. If teachers do not hve the help from parents and children, education is going to continue to have problems. No one want to look at the parent - child aspect. People just holler its the teacher.
7.8.2010 | 4:21pm
Maria says:
May be the very title of this site would be what would make a peaceful transition ...almost like what would have been in The Garden ...we who were created to be the priesthood ..God's beloved children getting to spend more time with Him , in praise and adoration ...and that would not need too much of resources either ...esp. for an aging population ..
the infrastructure already in place .. plenty of worship spaces , vacant or almost so monasteries and convents ... ..more vacant commercial space coming available ...
Holy Father named after Father of monasticism .... true , it would need hearts that can taste the sweetness and peace of such lives even for short spans ..
Yet, there alredy are countries where such is taking place ...retreat centers where persons come and stay for a minimum of one week at a time , get fed
at more than one level ( even if some of it may not be of the best type ! ) ...all at minimal expenses ...and persons who are used to far better conveniances , still return ...for the extra they experience at the heart level ...and often their lives have also changed for the better ...
Fr.Euteuneur of Human Life International mentions of the need for large scale exorcisms as a real upcoming need ...
The Church hopefully would be ready to meet the challenge ...and through good and fruiful experiences such as above , persons may be even ready to cross on to a new lifestyle altogether ...extended families ..more time to be spent in not just labor and production or immoral pursuits ..but on First things ..
and these new apostles and warriors of the new spring time be able to go to places like Nigeria .. ..where it is reported that enough oil to fill two Exxon Valdez gets spilled every year ...due to mostly attempts at thefts ...how people in the vicinities get sick .... a littel good heartedness at that level that could make smoldering hate filled refugee camps disappear ...as well as the slums ..
Let us be careful about our grumblings too ...how fall of communism has caused the saving sof other countries from coming in here ...
Why would a rich country like ours need that in the first place ..to impoverish others ..
Russia is still in the aftereffects of communism .. a people who have been trained to live with the cynical and hardhearted values of atheism not able to anticipate and commit to famileis and children , for all the joys it can bring even in this world ...leading to fears that it might become a childless country ..inspite of its wealth of natuaral resources ..
More focus on what truly are First things ... our Father - would He not be waiting for all His children ..for such a Kingdom even here and now ..
We have to hope that The Mother would get The Bride ready ...
the infrastructure already in place .. plenty of worship spaces , vacant or almost so monasteries and convents ... ..more vacant commercial space coming available ...
Holy Father named after Father of monasticism .... true , it would need hearts that can taste the sweetness and peace of such lives even for short spans ..
Yet, there alredy are countries where such is taking place ...retreat centers where persons come and stay for a minimum of one week at a time , get fed
at more than one level ( even if some of it may not be of the best type ! ) ...all at minimal expenses ...and persons who are used to far better conveniances , still return ...for the extra they experience at the heart level ...and often their lives have also changed for the better ...
Fr.Euteuneur of Human Life International mentions of the need for large scale exorcisms as a real upcoming need ...
The Church hopefully would be ready to meet the challenge ...and through good and fruiful experiences such as above , persons may be even ready to cross on to a new lifestyle altogether ...extended families ..more time to be spent in not just labor and production or immoral pursuits ..but on First things ..
and these new apostles and warriors of the new spring time be able to go to places like Nigeria .. ..where it is reported that enough oil to fill two Exxon Valdez gets spilled every year ...due to mostly attempts at thefts ...how people in the vicinities get sick .... a littel good heartedness at that level that could make smoldering hate filled refugee camps disappear ...as well as the slums ..
Let us be careful about our grumblings too ...how fall of communism has caused the saving sof other countries from coming in here ...
Why would a rich country like ours need that in the first place ..to impoverish others ..
Russia is still in the aftereffects of communism .. a people who have been trained to live with the cynical and hardhearted values of atheism not able to anticipate and commit to famileis and children , for all the joys it can bring even in this world ...leading to fears that it might become a childless country ..inspite of its wealth of natuaral resources ..
More focus on what truly are First things ... our Father - would He not be waiting for all His children ..for such a Kingdom even here and now ..
We have to hope that The Mother would get The Bride ready ...
7.8.2010 | 4:28pm
TLC says:
Wow! Allow me to brown-nose a bit. Almost all of the comments to this article are thoughtful and on-topic! And with no flaming, vitriol, or troll-bait (other than perhaps Mr. Koehl's mild shot at Bob). Did I somehow wander off the Internet? And just to give credit were it is due, Mr. Koehl's substantive comments are great, with detail and specifics (so often missing from these types of forums) combined with real insight and analysis. The post on post-war economics and the comparisons between Chamberlain and Roosevelt was cogent and concise (and to my thinking, spot on).
Seriously, thanks for all of the comments. Truly thought-provoking and helpful. I have not been a regular visitor to First Things, but if the commentors routinely exhibit this level of quality and engagement, I know I will be back more often.
Seriously, thanks for all of the comments. Truly thought-provoking and helpful. I have not been a regular visitor to First Things, but if the commentors routinely exhibit this level of quality and engagement, I know I will be back more often.
7.8.2010 | 5:06pm
Steve B. says:
I'm still nervious about my job and I work in healthcare. Even before any of the so called healthcare changes kicks in, my employer has stopped raises, promotions and contributions to the 401K. I live as simply as possible with very little material possessions in case I loose my job and have to move somewhere else for work. That is if I can find it. If not, it's living out of my car. I'm wondering just how many people are out there without a place to rest their heads because of lost jobs and homes. How on earth are they surviving? At least I have no family that depends on me for support, only me.
7.8.2010 | 5:22pm
David Goldman says:
Mr. Koehl,
I agree with you about the non-normative character of the postwar years--in fact, I referred to America's monopoly on capital and talent until the fall of Communism.
The British economic performance during the 1930s is a bit more complex. Britain enjoyed an enormous improvement in its terms of trade due to the collapse of commodity prices and Imperial preferences (that's why the British had bad teeth -- lots of cheap sugar). One of the reasons that India and other elements of the empire were so anxious to gain independence is that they were being milked by the mother country. There were a few places where the British stayed for ideological reasons and lost money, but for the most part the empire was an important economic buffer. It is misleading, I think, to evaluate British economic policy as if the UK were a closed economy.
I agree with you about the non-normative character of the postwar years--in fact, I referred to America's monopoly on capital and talent until the fall of Communism.
The British economic performance during the 1930s is a bit more complex. Britain enjoyed an enormous improvement in its terms of trade due to the collapse of commodity prices and Imperial preferences (that's why the British had bad teeth -- lots of cheap sugar). One of the reasons that India and other elements of the empire were so anxious to gain independence is that they were being milked by the mother country. There were a few places where the British stayed for ideological reasons and lost money, but for the most part the empire was an important economic buffer. It is misleading, I think, to evaluate British economic policy as if the UK were a closed economy.
7.8.2010 | 6:12pm
William says:
Unemployment has become a job title. Some people are actually scraping away a living by throwing tantrums and scraping away a living off other people's taxes by voting themselves more benefits or by plundering the savings of others by taking loans and lines of credit they can't afford and are going to default on eventually. Unfortunately, this type of activity would erode the economic incentive there is for others to invest in higher education, enterpreneurial free market activity, or even take an unskilled job with a paycheck less than the unemployment check. Let's not continue to turn a nation known for its equality of opportunity into an equality of suffering by caving into the demands of the freeloaders.
Every time we do, we increase the viciousness of the cycle, a cycle that would only be exacerbated by "central planning" options #1 and #3.
I'm not convinced option #2 should be dismissed out of hand, and saying the unskilled are doomed because we have this-or-that-type of economy is unfair and cruel to those individuals who can use this time to learn skills and become self-reliant, particularly 16-19 year old males who we hope will become honorable fathers, providers, and protectors. Is that so wrong?
In my opinion this is the year of the informed roll-up-your-sleeves voter who wants to do something different, who wants to turn this back into a land of opportunity, doesn't want to join a gloomy death march towards socialist central planning, and is willing to take a stand against politicians who prefer interference and manipulation of our markets to defending their freedom and allowing them to do their job of setting affordable and realistic prices for things like real estate, education, wages, starting a business, and yes, hiring employees. The type who believe in an honest day's work for an honest day's pay. That is still possible in the United States of America of all places, and I think that includes a lot of 18 and 19 year old young men who "get it" and who have the courage to ignore the naysayers.
Every time we do, we increase the viciousness of the cycle, a cycle that would only be exacerbated by "central planning" options #1 and #3.
I'm not convinced option #2 should be dismissed out of hand, and saying the unskilled are doomed because we have this-or-that-type of economy is unfair and cruel to those individuals who can use this time to learn skills and become self-reliant, particularly 16-19 year old males who we hope will become honorable fathers, providers, and protectors. Is that so wrong?
In my opinion this is the year of the informed roll-up-your-sleeves voter who wants to do something different, who wants to turn this back into a land of opportunity, doesn't want to join a gloomy death march towards socialist central planning, and is willing to take a stand against politicians who prefer interference and manipulation of our markets to defending their freedom and allowing them to do their job of setting affordable and realistic prices for things like real estate, education, wages, starting a business, and yes, hiring employees. The type who believe in an honest day's work for an honest day's pay. That is still possible in the United States of America of all places, and I think that includes a lot of 18 and 19 year old young men who "get it" and who have the courage to ignore the naysayers.
7.9.2010 | 12:43am
Mike Linton says:
Isn't there a fourth way that the economy could "evolve"? A nice war with Iran?
7.9.2010 | 12:49am
jb says:
Mr. Koehl has it over on Mr. Goldman, I do believe. The answer is certainly not supplied by the gummint animal Alan Greenspan, as Bob G implies.
I never set out to be rich, even when I took my first paper route at 11 years of age. I simply did not want to be dependent on anyone. Within two years I owned my own lawn equipment and, through the rest of my junior and senior high school years, I had more money in my pocket on Friday nights than any of my classmates.
Did my time militarily (Vietnam Era), used the GI Bill to complete 5 of the 8 years necessary for my MDiv (took me 10 years--since I also was self-employed as a house-painter during my undergraduate and graduate school years--full-time student . . . full-time painter).
After 15 years serving where the sainted Fr. Neuhaus also served in his past, my ex decided matters for me, and I found myself well-trained and nowhere to go.
So, at age 51, I started over.
Sales at first (and yes, anyone can do sales--even YOU--you just have to be willing to learn how, which most folks are not). That led to the opportunity to be my own boss yet again, which despite the struggles at first, has blossomed. Still not getting rich, but I and two 1099'ers with me are not on the gummint dole.
What I do serves to improve the homes of others which, in tight times or not, is always in demand.
I have money in savings, money toward my retirement (although I doubt I will retire---and I have no hope of getting the thousands I contributed to the Ponzi scheme of Social Security). I add more each week, on a salary few job seekers today would consider adequate. My vehicle is in excellent condition, even if manufactured in the last century (1998), and I do not suffer any sort of ego concerns over what I drive. I learned to cook well long ago, which allows me to enjoy pretty much anything I like, even on my budget. My lone extravagance is that bubbly Milwaukee Spring Water. If my bride and I want to catch a flick or a ball game we can without worrying. We get around to see the kids and the grand-kids all the time, and can splurge then, too.
Most importantly of all, our faith is in neither ourselves, nor the goofiness in action called gummint (especially the last 100 years or so). The Lord provides for those who trust in Him, and are not afraid of getting their hands dirty working.
And that bring me full circle to the title of Mr. Goldman's article---"Americans Who'll Never Work Again."
Mr Goldman . . . It will only be those who CHOOSE not to do so. I see Mexican illegals busting butt everywhere, every day; and young kids who haven't bought into the Sad Sack (remember that one?) routine of feeling sorry for themselves, but who want to somehow get where they want to go.
I am not being ugly, I just know better from life experience. Work is out there if you want it. It just takes work to find it.
Git ta gittin. Don't be deaf when opportunity knocks.
I never set out to be rich, even when I took my first paper route at 11 years of age. I simply did not want to be dependent on anyone. Within two years I owned my own lawn equipment and, through the rest of my junior and senior high school years, I had more money in my pocket on Friday nights than any of my classmates.
Did my time militarily (Vietnam Era), used the GI Bill to complete 5 of the 8 years necessary for my MDiv (took me 10 years--since I also was self-employed as a house-painter during my undergraduate and graduate school years--full-time student . . . full-time painter).
After 15 years serving where the sainted Fr. Neuhaus also served in his past, my ex decided matters for me, and I found myself well-trained and nowhere to go.
So, at age 51, I started over.
Sales at first (and yes, anyone can do sales--even YOU--you just have to be willing to learn how, which most folks are not). That led to the opportunity to be my own boss yet again, which despite the struggles at first, has blossomed. Still not getting rich, but I and two 1099'ers with me are not on the gummint dole.
What I do serves to improve the homes of others which, in tight times or not, is always in demand.
I have money in savings, money toward my retirement (although I doubt I will retire---and I have no hope of getting the thousands I contributed to the Ponzi scheme of Social Security). I add more each week, on a salary few job seekers today would consider adequate. My vehicle is in excellent condition, even if manufactured in the last century (1998), and I do not suffer any sort of ego concerns over what I drive. I learned to cook well long ago, which allows me to enjoy pretty much anything I like, even on my budget. My lone extravagance is that bubbly Milwaukee Spring Water. If my bride and I want to catch a flick or a ball game we can without worrying. We get around to see the kids and the grand-kids all the time, and can splurge then, too.
Most importantly of all, our faith is in neither ourselves, nor the goofiness in action called gummint (especially the last 100 years or so). The Lord provides for those who trust in Him, and are not afraid of getting their hands dirty working.
And that bring me full circle to the title of Mr. Goldman's article---"Americans Who'll Never Work Again."
Mr Goldman . . . It will only be those who CHOOSE not to do so. I see Mexican illegals busting butt everywhere, every day; and young kids who haven't bought into the Sad Sack (remember that one?) routine of feeling sorry for themselves, but who want to somehow get where they want to go.
I am not being ugly, I just know better from life experience. Work is out there if you want it. It just takes work to find it.
Git ta gittin. Don't be deaf when opportunity knocks.
7.9.2010 | 7:44am
Richard says:
Dear Ben,
Thanks for your spirited post. I've been teaching young people for most of my sixty seven years and although they have a lot of generational problems, I certainly don't blame them and I don't blame you. As I have told my students many times, "Yes, you've got some behavioral problems, but I don't blame you, I blame us. If you still have them in twenty years, I'll blame you."
Best,
Richard
Thanks for your spirited post. I've been teaching young people for most of my sixty seven years and although they have a lot of generational problems, I certainly don't blame them and I don't blame you. As I have told my students many times, "Yes, you've got some behavioral problems, but I don't blame you, I blame us. If you still have them in twenty years, I'll blame you."
Best,
Richard
7.9.2010 | 10:11am
Stuart Koehl says:
"Holy Father named after Father of monasticism ..."
We have a Pope Anthony? Who knew? But a renaissance of Western monasticism would require a complete overhaul of Latin monastic and religious orders, which doesn't seem quite on to me. Eastern monasticism here in the states is also struggling, but the problem is more along the line of a lack of critical mass. In Eastern Europe, monasteries both Greek Catholic and Eastern Orthodox are bulging (as are seminaries). Perhaps there is something to be economic hardship, after all.
We have a Pope Anthony? Who knew? But a renaissance of Western monasticism would require a complete overhaul of Latin monastic and religious orders, which doesn't seem quite on to me. Eastern monasticism here in the states is also struggling, but the problem is more along the line of a lack of critical mass. In Eastern Europe, monasteries both Greek Catholic and Eastern Orthodox are bulging (as are seminaries). Perhaps there is something to be economic hardship, after all.
7.9.2010 | 10:32am
Dwight says:
Ben's comments were quite telling. No disrespect intended but they {unintentionally?] authenticated many of the earlier povs expressed here. Too large a number of today's youth simply don't have a work ethic and will likely pay a huge price over their lifetimes for that character deficit.
But jb is spot on that there is work out there, but it takes motivation and ingenuity to connect with the opportunities - and the motivation part seems what's lacking the most.
And there's no such thing as a "nice" war. Shame on ML for saying that.
But jb is spot on that there is work out there, but it takes motivation and ingenuity to connect with the opportunities - and the motivation part seems what's lacking the most.
And there's no such thing as a "nice" war. Shame on ML for saying that.
7.9.2010 | 10:38am
Krakow says:
Fantastic analysis but what if we were to expand the look-back window on labor history, and what if we were to assume that much more of the mechanical human labor will soon be obsolete because monetary policies of central banks have allowed for exponential technological advances? Then we might conclude that the Western educational system has been inept in preparing our labor force for what has been an obviously slow-moving iceberg of change in demand for manual labor. In that, the underclass needs to receive a similar lesson to what the upper class needs to receive. That is that speculation and inflation orchestrated by central banks is steadily devaluating labor and no previously conceived mechanism for wealth distribution, including communism and capitalism among others, will suffice.
The inept educational system could be a fraction of the problem. If a disruptive energy technology were to be introduced similar to that of kerosene in the 1850’s then the consequences could be dire. Let’s consider an extreme supposition that some economic terrorist, with phd’s in philosophy and engineering, commercializes a solar energy cell, from items acquired on Ebay, that can power a car for a thousand miles or a home for a month from a couple hours worth of sunlight. Then labor demand for oil, coal, wind, gas and nuclear energy production would dwindle. One could argue that the drive for America’s energy security could have unpredictable consequences if by accident we displace traditional energy producers as we did the whalers. Certainly that seems very unlikely as did the prospect of inexpensive kerosene in the early 1800’s.
History books may one day surmise that the modern economy was not built on hard work but hard work is thought to be virtuous so we call upon others to get to it in hard times. In the short run, a Roosevelt CCC type of programs seem like good alternatives. One such program could be the meta tagging of digital video inventory that is mushrooming. Such work generally requires cultural context so it cannot be outsourced to India. The underclass seems like it could be trained quite quickly to perform these types of functions.
It is less important to guess the next big thing that will absorb excess labor capacity than it is to identify many of the next big thing contenders. Certainly existing technology will fade so maybe solar and titanium are contenders but the genome and the brain are too intriguing to exclude. The gap between the human brain and computer chip has incalculable value. Maybe that is the next big thing because public works and energy security seems so 20th century.
On a side note, Buffalo Bill Cody was the poster child for an American at the turn of the previous century. Are John Stewart and Will Ferrell the current?
The inept educational system could be a fraction of the problem. If a disruptive energy technology were to be introduced similar to that of kerosene in the 1850’s then the consequences could be dire. Let’s consider an extreme supposition that some economic terrorist, with phd’s in philosophy and engineering, commercializes a solar energy cell, from items acquired on Ebay, that can power a car for a thousand miles or a home for a month from a couple hours worth of sunlight. Then labor demand for oil, coal, wind, gas and nuclear energy production would dwindle. One could argue that the drive for America’s energy security could have unpredictable consequences if by accident we displace traditional energy producers as we did the whalers. Certainly that seems very unlikely as did the prospect of inexpensive kerosene in the early 1800’s.
History books may one day surmise that the modern economy was not built on hard work but hard work is thought to be virtuous so we call upon others to get to it in hard times. In the short run, a Roosevelt CCC type of programs seem like good alternatives. One such program could be the meta tagging of digital video inventory that is mushrooming. Such work generally requires cultural context so it cannot be outsourced to India. The underclass seems like it could be trained quite quickly to perform these types of functions.
It is less important to guess the next big thing that will absorb excess labor capacity than it is to identify many of the next big thing contenders. Certainly existing technology will fade so maybe solar and titanium are contenders but the genome and the brain are too intriguing to exclude. The gap between the human brain and computer chip has incalculable value. Maybe that is the next big thing because public works and energy security seems so 20th century.
On a side note, Buffalo Bill Cody was the poster child for an American at the turn of the previous century. Are John Stewart and Will Ferrell the current?
7.9.2010 | 11:44am
Stuart Koehl says:
"As to the "distributionist, communitarian dream" I supposedly admire: I guess it's inevitable that a conventional economist such as you would reach for the clichés. Chesterton and Belloc were distributists, though, and the current pope is an economic communitarian. Hmmm."
Dear Bob,
Forgive my mild teasing. Let me just say that I am not an economist, I'm an historian who, willy-nilly, frequently finds himself dealing with economic issues. As regards the distributionist and communitarian impulse within the Catholic Church, it has always puzzled me why, given its perspective on human nature as immutable and irredeemable by human effort, the Church always falls for utopian economic schemes, which, as it turns out, are not based either on economic theory or on historical experience, but usually on a romantic ideal of a biblical or (more usually) medieval past. It bothers me terribly when the Church decides to become prescriptive, rather than descriptive, in its social policies--but that might just be my bias as a Greek Catholic who sees the role of the Church as providing objectives and Apostolic witness working in symphonia with the secular authorities. Which is to say, making economic policy (to say nothing of foreign policy or social policy) is not within the competency of the Church. The Church can outline goals and objectives, but it is foolish, and merely looks partisan, when it prescribes specific ways of attaining those goals.
Dear Bob,
Forgive my mild teasing. Let me just say that I am not an economist, I'm an historian who, willy-nilly, frequently finds himself dealing with economic issues. As regards the distributionist and communitarian impulse within the Catholic Church, it has always puzzled me why, given its perspective on human nature as immutable and irredeemable by human effort, the Church always falls for utopian economic schemes, which, as it turns out, are not based either on economic theory or on historical experience, but usually on a romantic ideal of a biblical or (more usually) medieval past. It bothers me terribly when the Church decides to become prescriptive, rather than descriptive, in its social policies--but that might just be my bias as a Greek Catholic who sees the role of the Church as providing objectives and Apostolic witness working in symphonia with the secular authorities. Which is to say, making economic policy (to say nothing of foreign policy or social policy) is not within the competency of the Church. The Church can outline goals and objectives, but it is foolish, and merely looks partisan, when it prescribes specific ways of attaining those goals.
7.9.2010 | 2:31pm
Charles R. Williams says:
The minimum wage has been substantially increased in the last few years and this is certainly a factor in high levels of unemployment among unexperienced, low-skilled workers.
Illegal immigration is also a factor.
But it is certainly true that the quality of the American workforce has declined drastically since the fifties and sixties. Cultural factors account for this - primarily the collapse of the family at lower s/e/s levels and contraception at upper s/e/s levels. Parents are unable or are unwilling to invest in the next generation. No government program can replace the essential role of parents in educating the young. Some government programs have certainly undermined that role.
Yes, the blue collar paradise of the fifties is gone forever but cultural factors explain the differences between the US and, let's say, Switzerland.
Illegal immigration is also a factor.
But it is certainly true that the quality of the American workforce has declined drastically since the fifties and sixties. Cultural factors account for this - primarily the collapse of the family at lower s/e/s levels and contraception at upper s/e/s levels. Parents are unable or are unwilling to invest in the next generation. No government program can replace the essential role of parents in educating the young. Some government programs have certainly undermined that role.
Yes, the blue collar paradise of the fifties is gone forever but cultural factors explain the differences between the US and, let's say, Switzerland.
7.9.2010 | 2:42pm
David Goldman says:
JB,
I applaud your entrepreneurial spirit. The fact is that most people don't have the skills or skill-absorption capacity or the initiative to be entrepreneurs. And most entrepreneurs fail; it is the handful who change the way we do things who drive the economy. I want a system that gives the handful the maximum change to rise to the top--no phony equality, income redistribution, or faux fairness. My supply-side credentials go back a quarter of a century when I was Jude Wanniski's chief economist and business partner. But the sad fact is that a very large number of Americans are stuck and can't bootstrap their way out. Not all of them are as clever and energetic as you are. And we are going to have to address the problem.
I applaud your entrepreneurial spirit. The fact is that most people don't have the skills or skill-absorption capacity or the initiative to be entrepreneurs. And most entrepreneurs fail; it is the handful who change the way we do things who drive the economy. I want a system that gives the handful the maximum change to rise to the top--no phony equality, income redistribution, or faux fairness. My supply-side credentials go back a quarter of a century when I was Jude Wanniski's chief economist and business partner. But the sad fact is that a very large number of Americans are stuck and can't bootstrap their way out. Not all of them are as clever and energetic as you are. And we are going to have to address the problem.
7.9.2010 | 2:47pm
Bob G says:
Mr. Goldman says a lot of youth are not going to find work. So presumably the welfare bill will grow. But he pretty much stopped with an analysis of the labor market—becoming prudence and reticence perhaps. Yet many conventional economists say that even if the entire younger generation finds good work, that will still not be enough to support the baby boomers in their retirement.
Then Mr. Kuehl weighed in with a long survey of 20th Century economics, winding up with the conclusion that if Obama had only let things be, the economy would have recovered nicely on its own. This is the standard view of economists on the right, any deviation from which they tag with labels such as “distributionist.” (Never mind Government debt, Social Security, and Medicare/Medicaid.)
But the great crash of 2008 caught all these conventional economists with their pants down. As the financial writer Charles Morris says, economists always consider any situation whatever, however bizarre, as the new “normal.” If these gurus never saw the crash coming, how can they be so confident they know the way out of it? We listened to them last time.
The conventional view is that the economy will gradually recover, with the left (such as Paul Krugman) saying the Gummint should help and the right saying it will only retard real recovery.
The real test will be empirical: whether the economy sooner or later recovers, either on its own or with Gummint help. I predict it will not, because the weight of Gummint has become too large for the Market to support. In its response to the 2008 crash Gummint inaugurated a whole new age by finally substituting itself for the Market as the economy’s ultimate organizing principle, a consummation it had been approaching for 100 years at least. The cabined, cribbed and confined Market will not pull us out this time.
Watch in coming months—and years—as gurus and “experts” repeatedly declare the “recession” over and then recant, as the weight of Gummint gradually squeezes the life out of the economy. Get ready for socialism, the coup de grace to prosperity.
Thanks all for a good campfire debate. Onward and upward.
Then Mr. Kuehl weighed in with a long survey of 20th Century economics, winding up with the conclusion that if Obama had only let things be, the economy would have recovered nicely on its own. This is the standard view of economists on the right, any deviation from which they tag with labels such as “distributionist.” (Never mind Government debt, Social Security, and Medicare/Medicaid.)
But the great crash of 2008 caught all these conventional economists with their pants down. As the financial writer Charles Morris says, economists always consider any situation whatever, however bizarre, as the new “normal.” If these gurus never saw the crash coming, how can they be so confident they know the way out of it? We listened to them last time.
The conventional view is that the economy will gradually recover, with the left (such as Paul Krugman) saying the Gummint should help and the right saying it will only retard real recovery.
The real test will be empirical: whether the economy sooner or later recovers, either on its own or with Gummint help. I predict it will not, because the weight of Gummint has become too large for the Market to support. In its response to the 2008 crash Gummint inaugurated a whole new age by finally substituting itself for the Market as the economy’s ultimate organizing principle, a consummation it had been approaching for 100 years at least. The cabined, cribbed and confined Market will not pull us out this time.
Watch in coming months—and years—as gurus and “experts” repeatedly declare the “recession” over and then recant, as the weight of Gummint gradually squeezes the life out of the economy. Get ready for socialism, the coup de grace to prosperity.
Thanks all for a good campfire debate. Onward and upward.
7.9.2010 | 4:43pm
jason taylor says:
"Work-ethic" is fine but even someone who theoretically holds to it finds it awfully hard to force himself to work without necessity or ambition. Honestly I know that personally; I get money from disability checks and really have a hard time making myself work even though I feel that I should.
7.9.2010 | 5:47pm
Bob G says:
I may be posting too often but I’m intrigued by historian Koehl’s comments about the Church’s pronouncements on economics. Mr. Koehl, I think I might 95% agree with you, but the 5% where we disagree may be more important.
Pope Leo XIII defended private property and initiative vs. waxing Marxism but Pope Benedict has shifted into a communitarian mode, going so far as advocating (maybe the translation was poor) “redistribution,” which would cause a host of new problems. I see the Church pronouncements as correct in their aspirations but the Church has no clue how to get there. Much the same can be said about Distributism and other panaceas.
Yet I believe the Church has in its hands, by virtue of its long and now unique philosophical (sic) tradition, the final and complete answer to the entire economic problem as such, a perfect answer to the situation into which we’re now sinking. The solution is spectacular, yet simple, and would enthrall hundreds of millions of people. And, implausible as this might seem now, it would instantly elevate the Church as the almost unquestioned cultural leader to whom even the most rabid secularists would look for their own material prosperity.
Mr. Goldman says he was the late and brilliant Jude Wanniski’s partner. Interesting, because I’ve paid close attention to what the latter wrote. As Mr. Goldman knows, Wanniski advocated a return to the gold standard, and for compelling reasons. But that would have been no solution at all. Mr. Goldman is a champion of the Market, as am I and was Wanniski. The latter was trying to save the tradition from the Left by returning to the classical Smithian foundations. But the Capitalist tradition will inevitably destroy the Market, as it is in the process of doing.
These statements will seem confusing, but maybe I can condense. Michael Novak predicted early in the crash that the economy would soon recover. I said it would not, and I noted Mr. Novak had never found any significance in the fact that the Capitalist system was the creation of the anti-religious Enlightenment. He replied (mis-spelling my name, but no offense) that I was wrong. He said the French Enlightenment was hostile to religion but the English version was not; it was friendly. But not so: the English/Scotch version of the Enlightenment was cool, indifferent to religion so long as it agreed to consider itself a private matter. Christians made a huge mistake when they accepted this bargain because, as John Courtney Murray said, religion is always the most public of all public matters. In fact this is the same issue Joseph Bottum just raised when he said we cannot accept any sort of compromise on abortion. It was just such a compromise we accepted when we agreed to the Capitalist formulation of the economic question.
Lest I seem unappreciative of Novak, let me say something about him. He started as a liberal and then switched sides, becoming a champion of Capitalist economics against the increasingly statist Left. I read his work compulsively and admired it. We all owe him a huge debt. If I had to choose between Capitalism and socialism I would not hesitate. But still, Enlightenment-style Capitalism leads inevitably to socialism. Maybe Mr. Novak became too successful to notice.
What was wrong with it? For several reasons, Novak’s hero, Adam Smith, defined the system as strictly material, like Newton’s solar system, even though this system is composed mainly of people. He did that because the Enlightenment had redefined all science whatever as strictly material like Newton’s. But that was false. For example, Karl Rahner defined theology as a science, but that makes no sense under the Enlightenment understanding.
The result of this philosophical materialism underlying the pseudo-science was the creation of an inexpungable class bias in the system, a problem that both Marx and Western liberals detected, but that Capitalist economists, relying on Smith’s formulation, dismissed as apocryphal. But the bias has always been very real, and it was what drove the economic Left to bring in the State as the solution. As long as the bias endures the Left and the State win and the Market is put ever more on the defensive. Yet Smithian economists cannot recognize the bias as real. They ritually praise the Market that the bias is destroying, but Capitalism and the Market are not the same. The Market is always the natural and correct form for economics, but Capitalist theory put it into too constrictive a straight-jacket that is now strangling it.
We could go through all the issues one by one and I could show you the truth in what I’m saying, but there is no space. What the Church has said and is saying about economics is correct, but the Church does not know how to get where it wants to go.
Pope Leo XIII defended private property and initiative vs. waxing Marxism but Pope Benedict has shifted into a communitarian mode, going so far as advocating (maybe the translation was poor) “redistribution,” which would cause a host of new problems. I see the Church pronouncements as correct in their aspirations but the Church has no clue how to get there. Much the same can be said about Distributism and other panaceas.
Yet I believe the Church has in its hands, by virtue of its long and now unique philosophical (sic) tradition, the final and complete answer to the entire economic problem as such, a perfect answer to the situation into which we’re now sinking. The solution is spectacular, yet simple, and would enthrall hundreds of millions of people. And, implausible as this might seem now, it would instantly elevate the Church as the almost unquestioned cultural leader to whom even the most rabid secularists would look for their own material prosperity.
Mr. Goldman says he was the late and brilliant Jude Wanniski’s partner. Interesting, because I’ve paid close attention to what the latter wrote. As Mr. Goldman knows, Wanniski advocated a return to the gold standard, and for compelling reasons. But that would have been no solution at all. Mr. Goldman is a champion of the Market, as am I and was Wanniski. The latter was trying to save the tradition from the Left by returning to the classical Smithian foundations. But the Capitalist tradition will inevitably destroy the Market, as it is in the process of doing.
These statements will seem confusing, but maybe I can condense. Michael Novak predicted early in the crash that the economy would soon recover. I said it would not, and I noted Mr. Novak had never found any significance in the fact that the Capitalist system was the creation of the anti-religious Enlightenment. He replied (mis-spelling my name, but no offense) that I was wrong. He said the French Enlightenment was hostile to religion but the English version was not; it was friendly. But not so: the English/Scotch version of the Enlightenment was cool, indifferent to religion so long as it agreed to consider itself a private matter. Christians made a huge mistake when they accepted this bargain because, as John Courtney Murray said, religion is always the most public of all public matters. In fact this is the same issue Joseph Bottum just raised when he said we cannot accept any sort of compromise on abortion. It was just such a compromise we accepted when we agreed to the Capitalist formulation of the economic question.
Lest I seem unappreciative of Novak, let me say something about him. He started as a liberal and then switched sides, becoming a champion of Capitalist economics against the increasingly statist Left. I read his work compulsively and admired it. We all owe him a huge debt. If I had to choose between Capitalism and socialism I would not hesitate. But still, Enlightenment-style Capitalism leads inevitably to socialism. Maybe Mr. Novak became too successful to notice.
What was wrong with it? For several reasons, Novak’s hero, Adam Smith, defined the system as strictly material, like Newton’s solar system, even though this system is composed mainly of people. He did that because the Enlightenment had redefined all science whatever as strictly material like Newton’s. But that was false. For example, Karl Rahner defined theology as a science, but that makes no sense under the Enlightenment understanding.
The result of this philosophical materialism underlying the pseudo-science was the creation of an inexpungable class bias in the system, a problem that both Marx and Western liberals detected, but that Capitalist economists, relying on Smith’s formulation, dismissed as apocryphal. But the bias has always been very real, and it was what drove the economic Left to bring in the State as the solution. As long as the bias endures the Left and the State win and the Market is put ever more on the defensive. Yet Smithian economists cannot recognize the bias as real. They ritually praise the Market that the bias is destroying, but Capitalism and the Market are not the same. The Market is always the natural and correct form for economics, but Capitalist theory put it into too constrictive a straight-jacket that is now strangling it.
We could go through all the issues one by one and I could show you the truth in what I’m saying, but there is no space. What the Church has said and is saying about economics is correct, but the Church does not know how to get where it wants to go.
7.9.2010 | 9:07pm
Edward Alleyn says:
Bob G.
I assume that by "redistribution," Pope Benedict does not call for a political system that
"spreads the wealth around," as President O famously said.
My understanding is that Pope Benedict calls for an ethical and moral capitalism, as a opposed to a strictly bottom line capitalism. You can't love your neighbor as yourself and exploit him at the same time. The problem is that not everyone is a Christian — some are Buddhists and some are Muslims.
I assume that by "redistribution," Pope Benedict does not call for a political system that
"spreads the wealth around," as President O famously said.
My understanding is that Pope Benedict calls for an ethical and moral capitalism, as a opposed to a strictly bottom line capitalism. You can't love your neighbor as yourself and exploit him at the same time. The problem is that not everyone is a Christian — some are Buddhists and some are Muslims.
7.9.2010 | 9:23pm
jb says:
Jason---
I qualify for every gummint giveaway program there is.
I just say no, because I operate from the perspective (extremely biblical and Christian), that if a man does not work, he does not eat (II Thess. 3:6-10). It is hard to make is simpler than that. The work is out there, but modern man is so schematically programmed to trust gummint and non-Christian authorities that to return to the basics of faith regarding work is hard to do.
It shouldn't be so, but it is.
Long before there were any of the economic theories floating about out there, the Christian view of work and labor was well established. Allowing supposed economists and experts to tell us different, or allowing ourselves to accept our own excuses, is no excuse.
Sorry Jesus and St. Paul . . .
Keynes and Greenspan and Bernanke and Geitner know better than you. And many believe them before they believe the two of you.
Naw. I could take all the bennies, but I have a sense of personal worth.
The old Smith Barney ad says it best.
I qualify for every gummint giveaway program there is.
I just say no, because I operate from the perspective (extremely biblical and Christian), that if a man does not work, he does not eat (II Thess. 3:6-10). It is hard to make is simpler than that. The work is out there, but modern man is so schematically programmed to trust gummint and non-Christian authorities that to return to the basics of faith regarding work is hard to do.
It shouldn't be so, but it is.
Long before there were any of the economic theories floating about out there, the Christian view of work and labor was well established. Allowing supposed economists and experts to tell us different, or allowing ourselves to accept our own excuses, is no excuse.
Sorry Jesus and St. Paul . . .
Keynes and Greenspan and Bernanke and Geitner know better than you. And many believe them before they believe the two of you.
Naw. I could take all the bennies, but I have a sense of personal worth.
The old Smith Barney ad says it best.
7.10.2010 | 3:35am
Bb says:
China, having a huge demand for entry level jobs also is moving to surpass the US in graduates with both bachelor's and PhD degrees, and not far from surpassing our per capita college rates, knows that their economic future depends on a highly educated workforce, something we, including many unions forgot as we priced ourselves out of the labor market globally. 2-year trade programs might help short term but the problem will return forever if we become second class in higher education.
7.10.2010 | 9:26am
Bill Cleary says:
There are two things that are missing in our economy today that I believe would help employ more Americans.
1. We could start building consumer goods like appliances and cars to the standards of the goods we built in the 1950’s. There are still cars, refrigerators and stoves that were built in the 50’s that are being used today. Today’s “modern” consumer goods are built with a 5 year planned obsolescence built into them. This not only requires the consumer to be in perpetual consumer debt, it also fills our dumps with more and more junk. Further, when our consumer goods are no better than those built in the rest of the world, the factor most people use in their purchasing decisions is not value but price. We cannot compete on the price of labor with the developing countries.
If America went back to only building the best quality products, then our products would be desired world wide. Our factories would then demand the best trained workers and that would force the schools to place a higher value on technical skill training.
2. The President could announce a contest to see who could come up with a power source, (something like the Bloom Box), that was the most energy efficient; located as close to the point of consumer use as possible, using the least amount of non renewable resources, and was the least polluting. Each entrant to the contest would have to submit his or her papers to the contest committee along with a working model of their invention. Each design concept would be published on the World Wide Web for anyone to access. The winners of the contest would have to demonstrate with a working model the best results. The winning design would also be published on the World Wide Web. The winners would be chosen be a committee made up by the best and brightest of universities like M.I.T. and Cal Tech, industries like G.E., Microsoft and others.
The winner would then receive 50 Billion dollars tax free. A small price to pay considering the Trillions we have already spent bailing out the financial industry in our country alone.
If we announced such a contest America could reduce or eliminate its dependence on oil. Imagine no more foreign involvement, no wars for keeping the free flow of oil. No massive oil spills that are wrecking our coasts. In addition, if anyone has the design for the means of production of energy, then conceivably anyone could produce their own energy. Imagine having your own energy producing box at your house. No more dependence on the power grid. No more dependence on the skills of others to bring you the energy you need at a fair price. The third world countries having the energy to grow their own economies. Dictators no longer having the control over the energy their populace receives. What any individual needs is energy independence, not energy interdependence.
I know it would take some time and effort to do either of the two ideas I talked about but consider the road we are on now and if these ideas are not the best, maybe there are other better ideas. I personally would like to know of any others to consider.
1. We could start building consumer goods like appliances and cars to the standards of the goods we built in the 1950’s. There are still cars, refrigerators and stoves that were built in the 50’s that are being used today. Today’s “modern” consumer goods are built with a 5 year planned obsolescence built into them. This not only requires the consumer to be in perpetual consumer debt, it also fills our dumps with more and more junk. Further, when our consumer goods are no better than those built in the rest of the world, the factor most people use in their purchasing decisions is not value but price. We cannot compete on the price of labor with the developing countries.
If America went back to only building the best quality products, then our products would be desired world wide. Our factories would then demand the best trained workers and that would force the schools to place a higher value on technical skill training.
2. The President could announce a contest to see who could come up with a power source, (something like the Bloom Box), that was the most energy efficient; located as close to the point of consumer use as possible, using the least amount of non renewable resources, and was the least polluting. Each entrant to the contest would have to submit his or her papers to the contest committee along with a working model of their invention. Each design concept would be published on the World Wide Web for anyone to access. The winners of the contest would have to demonstrate with a working model the best results. The winning design would also be published on the World Wide Web. The winners would be chosen be a committee made up by the best and brightest of universities like M.I.T. and Cal Tech, industries like G.E., Microsoft and others.
The winner would then receive 50 Billion dollars tax free. A small price to pay considering the Trillions we have already spent bailing out the financial industry in our country alone.
If we announced such a contest America could reduce or eliminate its dependence on oil. Imagine no more foreign involvement, no wars for keeping the free flow of oil. No massive oil spills that are wrecking our coasts. In addition, if anyone has the design for the means of production of energy, then conceivably anyone could produce their own energy. Imagine having your own energy producing box at your house. No more dependence on the power grid. No more dependence on the skills of others to bring you the energy you need at a fair price. The third world countries having the energy to grow their own economies. Dictators no longer having the control over the energy their populace receives. What any individual needs is energy independence, not energy interdependence.
I know it would take some time and effort to do either of the two ideas I talked about but consider the road we are on now and if these ideas are not the best, maybe there are other better ideas. I personally would like to know of any others to consider.
7.10.2010 | 6:53pm
Stuart Koehl says:
". We could start building consumer goods like appliances and cars to the standards of the goods we built in the 1950’s. There are still cars, refrigerators and stoves that were built in the 50’s that are being used today. Today’s “modern” consumer goods are built with a 5 year planned obsolescence built into them."
This is patently incorrect, almost on the level of an urban myth. Almost every product of every type is today is more efficient, more reliable and (in real terms) less expensive than those of the 1950s. Cars, for example, seldom lasted 100,000 miles in the 1950s, making one that did rather noteworthy. Today's cars easily last more than 200,000, if properly maintained. In relative terms, today's cars are also cheaper, safer, cleaner and more fuel efficient. And that is part of the problem: with cars lasting as long as they do, the demand for new cars is significantly lower than in the past. People used to replace cars every three to five years (or when the ashtrays filled up, as the joke in my family went). Today, people hold onto their cars much longer, and are more inclined to buy used than new. Hence, chronic overcapacity in the auto industry--not just in the U.S., but world wide.
The same is true of most consumer appliances. It isn't that they wear out or break more quickly than in the past, but that companies come out with newer, more efficient or more "sexy" models with enhanced features.
"The President could announce a contest to see who could come up with a power source, (something like the Bloom Box), that was the most energy efficient"
Or we could simply repeal the laws of thermodynamics. That would appeal to Barack, Eric Holder, Nancy Pelosi and Harry Reid, who undoubtedly consider those laws to be arbitrary and discriminatory.
One of the iron laws of history: When it's steamboat time, you steam, and not a moment sooner.
This is patently incorrect, almost on the level of an urban myth. Almost every product of every type is today is more efficient, more reliable and (in real terms) less expensive than those of the 1950s. Cars, for example, seldom lasted 100,000 miles in the 1950s, making one that did rather noteworthy. Today's cars easily last more than 200,000, if properly maintained. In relative terms, today's cars are also cheaper, safer, cleaner and more fuel efficient. And that is part of the problem: with cars lasting as long as they do, the demand for new cars is significantly lower than in the past. People used to replace cars every three to five years (or when the ashtrays filled up, as the joke in my family went). Today, people hold onto their cars much longer, and are more inclined to buy used than new. Hence, chronic overcapacity in the auto industry--not just in the U.S., but world wide.
The same is true of most consumer appliances. It isn't that they wear out or break more quickly than in the past, but that companies come out with newer, more efficient or more "sexy" models with enhanced features.
"The President could announce a contest to see who could come up with a power source, (something like the Bloom Box), that was the most energy efficient"
Or we could simply repeal the laws of thermodynamics. That would appeal to Barack, Eric Holder, Nancy Pelosi and Harry Reid, who undoubtedly consider those laws to be arbitrary and discriminatory.
One of the iron laws of history: When it's steamboat time, you steam, and not a moment sooner.
7.10.2010 | 6:58pm
Government Drone says:
Mike Linton says:
Isn't there a fourth way that the economy could "evolve"? A nice war with Iran?
No, not really. The reason why wars like WWII (or even Vietnam) were seen as beneficial to the economy had a lot to do with the prevailing notion of "total war" or a war of mass mobilization: all able-bodied men were expected to become soldiers, all the factories turned into making munitions, & all "excess" cash that happened to be lying around be taxed to pay for it. Putting a few million men in uniform certainly got them off the street.
But just as the economy in general has become more "knowledge-based", so has the military. Active duty soldiers are more likely to have graduated from high school than the general population, something that a lot of leftists don't always appreciate. Not only do a lot of soldiers carry portable computers & iPhones with them into combat, the market for specialized military apps for these platforms is considerable.
A professionalized military is also picky in a lot of other ways, not only in physical condition but in more intangible moral aspects (i.e., the presence of a criminal record). A few years back when the idea of bringing back the draft was being bruited about (I don't know how seriously) it came out that the Army didn't particularly want one; first off, something like 3 of 4 young men in the country today simply would not meet minimal requirements for recruitment.
Proponents of a "living wage" wouldn't like the results of any mass-mobilization program in general anyway; generally these programs--whether military or something more like the old CCC--tended to pay very poorly. The goal of these things was not to give young guys meaningful jobs to raise families with, but to keep them off the street (potentially rioting) or supply cheap fodder for a politician's or general's latest project.
Isn't there a fourth way that the economy could "evolve"? A nice war with Iran?
No, not really. The reason why wars like WWII (or even Vietnam) were seen as beneficial to the economy had a lot to do with the prevailing notion of "total war" or a war of mass mobilization: all able-bodied men were expected to become soldiers, all the factories turned into making munitions, & all "excess" cash that happened to be lying around be taxed to pay for it. Putting a few million men in uniform certainly got them off the street.
But just as the economy in general has become more "knowledge-based", so has the military. Active duty soldiers are more likely to have graduated from high school than the general population, something that a lot of leftists don't always appreciate. Not only do a lot of soldiers carry portable computers & iPhones with them into combat, the market for specialized military apps for these platforms is considerable.
A professionalized military is also picky in a lot of other ways, not only in physical condition but in more intangible moral aspects (i.e., the presence of a criminal record). A few years back when the idea of bringing back the draft was being bruited about (I don't know how seriously) it came out that the Army didn't particularly want one; first off, something like 3 of 4 young men in the country today simply would not meet minimal requirements for recruitment.
Proponents of a "living wage" wouldn't like the results of any mass-mobilization program in general anyway; generally these programs--whether military or something more like the old CCC--tended to pay very poorly. The goal of these things was not to give young guys meaningful jobs to raise families with, but to keep them off the street (potentially rioting) or supply cheap fodder for a politician's or general's latest project.
7.10.2010 | 10:09pm
Bill Cleary says:
Stuart Koehl,
I beg to differ. You said: "Almost every product of every type is today is more efficient, more reliable and (in real terms) less expensive than those of the 1950s." I was just in an apartment the other day that had a oven range that was installed in 1962-63 and still working fine. In contrast, the company I work for has had a lot of appliances thrown out that were between 2 and 5 years old. Most of the time the cost of repair is almost as great as replacement. For example two weeks ago we replaced a dishwasher in a unit that was 2 years old, not because the newer model was better, but because the cost of replacing a bad touch pad was almost as much as a new dishwasher. As for cars, well just look at some recent recalls; from breaks that fail to accelerators that accelerate on their own accord, in the past year alone the auto industry has had its troubles.
Like I said, with everyone competing on price they are not competing on quality. America can never compete on price alone, therefore it must compete producing the finest in quality.
I beg to differ. You said: "Almost every product of every type is today is more efficient, more reliable and (in real terms) less expensive than those of the 1950s." I was just in an apartment the other day that had a oven range that was installed in 1962-63 and still working fine. In contrast, the company I work for has had a lot of appliances thrown out that were between 2 and 5 years old. Most of the time the cost of repair is almost as great as replacement. For example two weeks ago we replaced a dishwasher in a unit that was 2 years old, not because the newer model was better, but because the cost of replacing a bad touch pad was almost as much as a new dishwasher. As for cars, well just look at some recent recalls; from breaks that fail to accelerators that accelerate on their own accord, in the past year alone the auto industry has had its troubles.
Like I said, with everyone competing on price they are not competing on quality. America can never compete on price alone, therefore it must compete producing the finest in quality.
7.11.2010 | 6:34am
Ed Snyder says:
The problem with the responses of Bob G. and the others who point to the Catholic Church's teachings on the economy is that they gloss over why the Church's teachings on such matters are wholly untrustworthy. As a faithful son of Holy Mother Church, allow me to explain.
The Church's pronouncements on economics are driven by politics because economics are driven by politics. And for the last 150 years, the Church's political agenda has been oriented toward the goal of weakening national sovereignty . This goal was set in response to the revolutions of 1848 and the culmination of those revolutions in the founding of the Kingdom of Italy and the loss of the Papal States. How else to explain the pathetic whining about capital punishment when DNA testing and the appeals process make the likelihood of executing an innocent person far less likely than in war? How else to explain the Church's lack of endorsement for liberal democracy, or worse, placing it on the same level as socialism? Speaking of which, how else to explain the games of footsie the Church plays with socialism, while opposing Communism? The statism of the left to which Bob G. refers is different in Socialism only because it is less open about its absolutism and is slower at its task than Communism. The result is the same, driven by the same secularist worldview.
Take it from a Catholic: At this juncture in history, the Church has essentially abandoned its wisdom about the true nature of man to forward a political agenda. As a result, none of her pronouncements about economics are trustworthy. Followed to the letter they would lead nations down one of two paths: Bloated and corrupt statism, or tribalism and anarchy. The only kind of people who could even have a chance of forming the kind of society the Church envisions are those converted to the Gospel of Christ. If the Church would spend it's time on that instead of trying to get pagans and reprobates to take money out of the pockets of working people and give it to people that don't want to work, it would come a lot closer to achieving its stated goals.
The Church's pronouncements on economics are driven by politics because economics are driven by politics. And for the last 150 years, the Church's political agenda has been oriented toward the goal of weakening national sovereignty . This goal was set in response to the revolutions of 1848 and the culmination of those revolutions in the founding of the Kingdom of Italy and the loss of the Papal States. How else to explain the pathetic whining about capital punishment when DNA testing and the appeals process make the likelihood of executing an innocent person far less likely than in war? How else to explain the Church's lack of endorsement for liberal democracy, or worse, placing it on the same level as socialism? Speaking of which, how else to explain the games of footsie the Church plays with socialism, while opposing Communism? The statism of the left to which Bob G. refers is different in Socialism only because it is less open about its absolutism and is slower at its task than Communism. The result is the same, driven by the same secularist worldview.
Take it from a Catholic: At this juncture in history, the Church has essentially abandoned its wisdom about the true nature of man to forward a political agenda. As a result, none of her pronouncements about economics are trustworthy. Followed to the letter they would lead nations down one of two paths: Bloated and corrupt statism, or tribalism and anarchy. The only kind of people who could even have a chance of forming the kind of society the Church envisions are those converted to the Gospel of Christ. If the Church would spend it's time on that instead of trying to get pagans and reprobates to take money out of the pockets of working people and give it to people that don't want to work, it would come a lot closer to achieving its stated goals.
7.11.2010 | 8:19am
Stuart Koehl says:
Government drone makes excellent points, all of which I have raised in various books and essays. The age of the mass army is over due to the advent of what the Soviets called "reconnaissance strike complexes"--networks of sensors linked to a variety of precision weapon systems. In conventional warfare, as we saw in both Desert Storm and Iraqi Freedom, it is impossible to mass in the presence of an adversary who has reconnaissance-strike complex capabilities--it merely presents him with a target-rich environment. In high intensity warfare, modern armies disperse to survive.
The response of most of our adversaries to this development has not been the acquisition of comparable reconnaissance-strike complexes, which are generally unaffordable and unsustainable even for European countries, but to move into asymmetrical warfare, including terrorism, insurgency, WMDs and cyber warfare.
Mass armies are ineffective against these asymmetrical responses. Counter-terrorism and counter-insurgency, for instance, require highly trained and motivated special forces and light infantry, which can never be procured from conscripts. As seen in both Iraq and Afghanistan, counter-insurgency forces require "heroic forbearance"--the discipline not to shoot back when fired upon if it would mean inflicting casualties on the civilian population. And they need the skills to apply lethal force with surgical precision. One will not find that in conscripts, whose skills are, by comparison, rudimentary, and whose principal objective is to do his time and get home in one piece.
Because of all these factors, the military today does not need warm bodies in the numbers it did in the past. A draft, if one were instituted, would only need to call up perhaps a tenth of all eligible men (and if you don't draft women, look for a lawsuit!), which means deferments and exemptions on a massive scale, making the military far less diverse than it is today (demographically, the armed forces are a mirror of the society from which they are drawn, both racially and economically). All-in-all, conscription in modern warfare is counter-productive, which is why most countries are abandoning it as quickly as possible.
The response of most of our adversaries to this development has not been the acquisition of comparable reconnaissance-strike complexes, which are generally unaffordable and unsustainable even for European countries, but to move into asymmetrical warfare, including terrorism, insurgency, WMDs and cyber warfare.
Mass armies are ineffective against these asymmetrical responses. Counter-terrorism and counter-insurgency, for instance, require highly trained and motivated special forces and light infantry, which can never be procured from conscripts. As seen in both Iraq and Afghanistan, counter-insurgency forces require "heroic forbearance"--the discipline not to shoot back when fired upon if it would mean inflicting casualties on the civilian population. And they need the skills to apply lethal force with surgical precision. One will not find that in conscripts, whose skills are, by comparison, rudimentary, and whose principal objective is to do his time and get home in one piece.
Because of all these factors, the military today does not need warm bodies in the numbers it did in the past. A draft, if one were instituted, would only need to call up perhaps a tenth of all eligible men (and if you don't draft women, look for a lawsuit!), which means deferments and exemptions on a massive scale, making the military far less diverse than it is today (demographically, the armed forces are a mirror of the society from which they are drawn, both racially and economically). All-in-all, conscription in modern warfare is counter-productive, which is why most countries are abandoning it as quickly as possible.
7.11.2010 | 11:37am
PaulR says:
The USA will become to resemble more and more, Brazil.
The poor will be concentrated in crime-ridden Favelas, and as Mr. Goldman describes, will lack the skills to participate in the economy
The Gov't in the name of "redistribution" will actually create a highly classist society, with the bureacracy as the intermediary between the few rich, a slightly larger middle class, and the large lower classes.
The poor will be concentrated in crime-ridden Favelas, and as Mr. Goldman describes, will lack the skills to participate in the economy
The Gov't in the name of "redistribution" will actually create a highly classist society, with the bureacracy as the intermediary between the few rich, a slightly larger middle class, and the large lower classes.
7.11.2010 | 12:54pm
Maria says:
Thank you Mr.Koehl , for the correction on St.Benedict being considered as Father of 'Western Monasticism ' only ...even though in a world with its closer and rapid connections , such as through internet , such distinctions are disppearing ...some of it for good !
Even the style of 'monasticsm' that could be widely available for the masses would be probabaly a combination of both Eastern and Western experiences ...monastery like experience , coming to right where most people are ...brief , yet deeper experiences for lot more masses ....and the deserts more only at the heart level ....spiritual warfare training ( ? best way for men and young teens to get real interest in this reality of lives ! )
Well, dreaming is an approved blessing in The Word ...:)
Even the style of 'monasticsm' that could be widely available for the masses would be probabaly a combination of both Eastern and Western experiences ...monastery like experience , coming to right where most people are ...brief , yet deeper experiences for lot more masses ....and the deserts more only at the heart level ....spiritual warfare training ( ? best way for men and young teens to get real interest in this reality of lives ! )
Well, dreaming is an approved blessing in The Word ...:)
7.11.2010 | 6:35pm
bedefan says:
As a relatively young person, I have to say this talk of young people lacking vim, verve, moxie, or whatever else strikes me as so much craziness. I think when the 50+ crowd talk this way, people my age and younger tend to roll our eyes (of course we roll our eyes!) and mutter, "They don't know how good they've had it." If you're over 50 and grew up in the US, your youth was spent in a period of economic prosperity that was unprecedented in the history of the world. Of the world! I'm not saying you didn't work hard. Of course you did. But seriously--of the world.
I've worked tough jobs (day labor, landscaping, janitorial, line cook, server, etc etc) in my life, but the idea that I'm lazy if I don't just take whatever low-paying job I can get my hands on, sheesh...
Think of it this way. I've got 2 kids under three. I can take a $10 per hour job (and in fact I have one right now), and if I work 40 hrs/wk at 50 weeks a year (assuming I'm sick some days, the place is closed for Christmas, etc.), that nets me... twenty thousand dollars. In a year. Before SS and the rest is taken out. Now, perhaps you think my wife and I should just become a family wherein both parents work full-time-plus and strangers paid minimum wage raise our children for us. This would perhaps demonstrate moxie, but I think it would also demonstrate gross spiritual negligence, given the promises we made when we had the little tykes baptized.
The point is a low-paying job that's more than two bucks over the minimum wage would put us in the hole every month just from rent, utilities, food, and, the big one: INSURANCE.
Now, here's another thing. I have a master's. I've got a little side gig doing freelance editing for foreign academics, and I work at $30/hr doing this. I can adjunct at the colleges in town for an average of $5k class. All told, if I ditched this $10/hr. job completely, essentially going into business full-time-plus for myself as an editor and teacher-when-I-need-to-teach, I could increase our income by about 50%, immediately. So why don't I?
Again: it's the insurance, dummy. The health care system continues to be, in my experience, the single greatest factor inhibiting both mobility of labor AND entrepreneurship. Health care just costs too much. Please think about what these costs mean in real terms to a young parent like me: if you think realistically about the possibility that one of your children could die from the lack of access to health care that a move to entrepreneurship would entail; or that a health emergency could bankrupt your family and seriously damage your prospects for ever owning a home, getting further loans for schooling, or whatever; the risks are too great to justify even a potential 50% increase in income. (Especially when there's a family history of health problems.)
If you say, "Well, the Mexican trimming my neighbor's rosebush sure is working hard without insurance," I would respond that I too, if I came from extreme, life-threatening poverty, of course would trim rosebushes for rich people in order to feed my family. But that isn't my situation.
I know lots of people with advanced degrees in the humanities going through similar things (not trimming rosebushes, but my situation: not taking economic risks because of the fact that we actually perform cost/benefit analyses and health care costs tip the balance toward us not engaging in economic risk).
This is not laziness. This is prudence.
I've worked tough jobs (day labor, landscaping, janitorial, line cook, server, etc etc) in my life, but the idea that I'm lazy if I don't just take whatever low-paying job I can get my hands on, sheesh...
Think of it this way. I've got 2 kids under three. I can take a $10 per hour job (and in fact I have one right now), and if I work 40 hrs/wk at 50 weeks a year (assuming I'm sick some days, the place is closed for Christmas, etc.), that nets me... twenty thousand dollars. In a year. Before SS and the rest is taken out. Now, perhaps you think my wife and I should just become a family wherein both parents work full-time-plus and strangers paid minimum wage raise our children for us. This would perhaps demonstrate moxie, but I think it would also demonstrate gross spiritual negligence, given the promises we made when we had the little tykes baptized.
The point is a low-paying job that's more than two bucks over the minimum wage would put us in the hole every month just from rent, utilities, food, and, the big one: INSURANCE.
Now, here's another thing. I have a master's. I've got a little side gig doing freelance editing for foreign academics, and I work at $30/hr doing this. I can adjunct at the colleges in town for an average of $5k class. All told, if I ditched this $10/hr. job completely, essentially going into business full-time-plus for myself as an editor and teacher-when-I-need-to-teach, I could increase our income by about 50%, immediately. So why don't I?
Again: it's the insurance, dummy. The health care system continues to be, in my experience, the single greatest factor inhibiting both mobility of labor AND entrepreneurship. Health care just costs too much. Please think about what these costs mean in real terms to a young parent like me: if you think realistically about the possibility that one of your children could die from the lack of access to health care that a move to entrepreneurship would entail; or that a health emergency could bankrupt your family and seriously damage your prospects for ever owning a home, getting further loans for schooling, or whatever; the risks are too great to justify even a potential 50% increase in income. (Especially when there's a family history of health problems.)
If you say, "Well, the Mexican trimming my neighbor's rosebush sure is working hard without insurance," I would respond that I too, if I came from extreme, life-threatening poverty, of course would trim rosebushes for rich people in order to feed my family. But that isn't my situation.
I know lots of people with advanced degrees in the humanities going through similar things (not trimming rosebushes, but my situation: not taking economic risks because of the fact that we actually perform cost/benefit analyses and health care costs tip the balance toward us not engaging in economic risk).
This is not laziness. This is prudence.
7.11.2010 | 9:59pm
Edward Alleyn says:
bedefan
Are you advocating Obamacare? I hope not.
Nevertheless, there could be real healthcare reform. Here are some sound proposals that got nowhere in Congress.
1: let families and businesses buy health insurance across state lines.
2: allow individuals, small businesses, and trade associations to pool together and acquire health insurance at lower prices, the same way large corporations and labor unions do.
3: give states the tools to create their own innovative reforms that lower health care costs.
4: end junk lawsuits that contribute to higher health care costs by increasing the number of tests and procedures that physicians sometimes order not because they think it's good medicine, but because they are afraid of being sued.
Are you advocating Obamacare? I hope not.
Nevertheless, there could be real healthcare reform. Here are some sound proposals that got nowhere in Congress.
1: let families and businesses buy health insurance across state lines.
2: allow individuals, small businesses, and trade associations to pool together and acquire health insurance at lower prices, the same way large corporations and labor unions do.
3: give states the tools to create their own innovative reforms that lower health care costs.
4: end junk lawsuits that contribute to higher health care costs by increasing the number of tests and procedures that physicians sometimes order not because they think it's good medicine, but because they are afraid of being sued.
7.11.2010 | 10:00pm
Bob G says:
Wow, Ed Snyder, what a diatribe. I'd ask you, if the Church is not credible in its pronouncements, who is? You say the Church has never endorsed political democracy, but I thought J. C. Murray won that battle at Vatican Council II. Perhaps the Church leans more to positions held by the Left now, but the writings of John Paul and Benedict XVI hardly amount to a political agenda. If there's one thing they both agree on it's that economics and politics are not enough.
Bedefan's post is the most poignant on this thread. He is correct: older generations had it far easier than his. The situation into which we have plunged them shouldn't have happened to a dog. If I were a politician I'd use his short script as a template for forging a political program. He got right down to the nub. How awful and sad!
Bedefan's post is the most poignant on this thread. He is correct: older generations had it far easier than his. The situation into which we have plunged them shouldn't have happened to a dog. If I were a politician I'd use his short script as a template for forging a political program. He got right down to the nub. How awful and sad!
7.12.2010 | 2:03am
Rude Dude says:
Unemployment among various demographic groups in the US is very similar to the unemployment levels of those same groups in other countries.
That doesn't mean that all X are Y but that if we take a population of 100M we find that 5% of one group is basically unemployable and if we take another group we find that 10% is basically unemployable regardless of the country they are in.
The sooner we come to grips with the reality, the sooner we can start making sustainable policy.
That doesn't mean that all X are Y but that if we take a population of 100M we find that 5% of one group is basically unemployable and if we take another group we find that 10% is basically unemployable regardless of the country they are in.
The sooner we come to grips with the reality, the sooner we can start making sustainable policy.
7.12.2010 | 11:32am
bedefan says:
Edward Allen said: "Are you advocating Obamacare?"
Nope, which is why I didn't say "and that's why I'm so happy about Obama's health care reform act!"
My point, waaay too circuitously made as I see now, is that the long-standing dysfunction in our health care system is partially responsible for certain problems in the labor market, specifically: it reduces mobility, and it reduces entrepreneurship, thus slowing the creation of jobs.
I don't have any evidence to back this up, admittedly. Was just speaking from my experience being one among the class of people (late-20s to early-30s educated middle class people) you might expect to try to start new economic ventures... But who refrain from doing so because the current health care arrangement makes such moves prohibitively risky.
I'd thus say that it'll be interesting to see whether the Obama health care act affects entrepreneurship. But not that I think his version of health care reform is the best, or even an acceptable, one.
Nope, which is why I didn't say "and that's why I'm so happy about Obama's health care reform act!"
My point, waaay too circuitously made as I see now, is that the long-standing dysfunction in our health care system is partially responsible for certain problems in the labor market, specifically: it reduces mobility, and it reduces entrepreneurship, thus slowing the creation of jobs.
I don't have any evidence to back this up, admittedly. Was just speaking from my experience being one among the class of people (late-20s to early-30s educated middle class people) you might expect to try to start new economic ventures... But who refrain from doing so because the current health care arrangement makes such moves prohibitively risky.
I'd thus say that it'll be interesting to see whether the Obama health care act affects entrepreneurship. But not that I think his version of health care reform is the best, or even an acceptable, one.
10.13.2010 | 9:56am
Antonina Agent says:
No, not really. The reason why wars like WWII (or even Vietnam) were seen as beneficial to the economy had a lot to do with the prevailing notion of "total war" or a war of mass mobilization: all able-bodied men were expected to become soldiers, all the factories turned into making munitions, & all "excess" cash that happened to be lying around be taxed to pay for it. Putting a few million men in uniform certainly got them off the street. The point is a low-paying job that's more than two bucks over the minimum wage would put us in the hole every month just from rent, utilities, food, and, the big one: INSURANCE.
Peace and God Bless, and may Christ be the center of your life.
Bu