Kicking a dead horse

Having been unemployed for two years since I graduated with a Master’s degree, I feel intense nausea when fully employed people tell me about what it takes to reduce unemployment. Kim Brooks argues that it is time to kill the “liberal arts” degree, by which she means any degree which cannot clearly justify its existence in the job market.^[1] On Truthdig, ARK points out in response,

Some might argue, however, that the real failure belongs to the crafters of broken domestic economic policy, not professors, artists and intellectuals. . . . That the “real” world is currently managed by men and women who have no visible concern for the welfare of the academy or the life of the mind and are principally and disastrously motivated by profit does not seem to factor large in [Kim Brooks’] search for an answer.^[2]

Meanwhile, Robert Samuelson at the Washington Post writes on all the unfilled jobs, a “great jobs mismatch” that according to Carl Camden, leaves “three [engineering] jobs for every candidate [in some cities]” that for Samuelson indicate structural unemployment.^[3] Samuelson ignores that homeowners who are “underwater” on their mortgages face a high cost to move and might therefore be constrained from moving to where jobs are. As well he might: Colleen Donovan and Calvin Schnure found

significant evidence of a lock-in effect. The lock-in, however, results almost entirely from a decline in within-county moves. As local moves are generally within the same geographic job market, this decline is not likely to affect labor market matching. In contrast, moves out-of-state, which are more likely to be in response to new employment opportunities, show no decline, and in fact are higher in counties with greater house price declines. Housing market lock-in does not appear to have degraded the efficiency of the labor market and does not appear to have contributed to a higher unemployment rate.^[4]

From this, Mark Thoma concludes that unemployment in the present recession is cyclical, not structural.^[5] But Samuelson cites Prakash Loungani of the International Monetary Fund who asserts that

About 75% of the forecast error variance of unemployment is accounted for by cyclical factors—real GDP changes (Okun’s Law), monetary and fiscal policies, and the uncertainty effects emphasized by Bloom (2009). Structural factors, which we measure using the dispersion of industry-level stock returns, account for the remaining 25 percent. For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession.^[6]

Samuelson is trying to focus attention on the smaller part of the problem rather than the larger. In so doing, he ignores a story in his own paper from last year:

With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 — a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.^[7]

Of course another reason people might not move for jobs is that there might not be jobs to move for:

“There are not a lot of opportunities to move. That is a huge factor in terms of less mobility,” said Fernando Ferreira, a professor at the University of Pennsylvania’s Wharton School who has written about the effect of the housing meltdown on mobility. “And the lack of mobility definitely hurts the efficiency of the labor market.”^[8]

The dispute over whether unemployment is structural or cyclical would be significant, because as Thoma explains,

If the problem is structural, there’s not a lot that policy can do to help in the short-run. Social insurance can ease the pain. Government can provide short-term employment to tide workers over, create incentives for both workers and firms to relocate, provide retraining, etc., but these problems take time to work themselves out. However, if the problem is lack of demand, then there is much more that policymakers can do to help the economy get back on its feet. The key is to offset the fall in demand through monetary and fiscal policy measures so that businesses will be willing to hire people again.^[9]

But the dispute is not significant. To the extent the political elite in the United States have implemented any of these policies, they have done much too little and they have decided that nothing more is to be done.

[Federal Reserve Chairman Ben] Bernanke voiced his support for a stimulus package in an appearance [in 2008] before the House Budget Committee. He stressed that it must be temporary and must be implemented quickly — so that its economic effects could be felt as much as possible within the next 12 months. “Putting money into the hands of households and firms that would spend it in the near term” is a priority, he said.

Especially important is making sure a plan can put cash into the hands of poor people and the middle class, who are most likely to spend it right away, he said, though he added that research shows affluent people also spend some of their rebates.^[10]

With the current emphasis on reducing the federal budget deficit, the elite are now actually reversing any assistance for the unemployed and for the poor, taking money out of the hands of people who would spend it immediately. Thus, they not only deepen suffering but deprive the economy of a badly needed stimulus.^[11] And with the emphasis on reducing taxes, they are giving more money to those who already have plenty, and who still won’t hire—at least in this country. Samuelson concedes that

though structural joblessness is important, the main cause of high unemployment remains the deep slump. In the recession, jobs dropped 20 percent in construction, 15 percent in manufacturing and 7 percent in retailing. Only a stronger economy can remedy this unemployment.^[12]

And while Brooks wants college graduates to have employable skills,^[13] I look to my own A.A. in Business Data Processing (1979), for which I took accounting classes and business classes and computer classes and even learned how to operate a ten-key adding machine—and still hit the end of the road by 1985. Because employers weren’t interested in applying my entirely applicable skills and experience to the next generation of technology.

The reason I chose a “liberal arts” degree, specifically a B.A. in Mass Communication (2005) and a M.A. in Speech Communication (2009) was that I was growing wise to elite claims that certain fields will be where the jobs of the future are—high technology with Bill Clinton, which went bust in 2001; biotechnology with George W. Bush, who undermined it with stem cell research funding restrictions; and now “green jobs” with Barack Obama, ignoring that the solar cells are mostly being made in China—only to see those jobs go overseas. Trying to chase the kind of jobs my father saw as “real jobs,” I simply got left in the dust; seeing that, I was trying to do something different.

But now that multinational corporations have pulled the rug out from under the U.S. economy,^[14] and now that our elite have expressed a determination to deprive the economy of legs, there is no longer a tax base to support schools and universities, which of course is just fine with the right wing who hated school, apparently even much more than I did, and who still despise intellectuals.^[15] And not only is the government pursuing policies that will only put more money in the hands of the rich but the idea we might need to do anything else is now well outside the range of acceptable political discourse.

Which makes Brooks’ suggestion self-fulfilling. By depriving our country of intellectuals, and by ensuring that the intellectuals we still have are deprived of a voice, we leave ourselves only with right-wing demagogues who craft policy through bigotry and avarice. As Heather put it on Crooks and Liars,

I’m also sick to death about this conversation never including our tax policies which actually encourage businesses to take jobs overseas and our trade laws. It’s time for our government to start representing the interests of the workers of this country and not just multi-national corporations that would be happy if all of us were working for slave wages while CEO’s and Wall Street investors maximize their profits. As I’ve said before, this is class warfare and the workers and what’s left of the middle class are losing it. I’m happy that we’ve at least got the Paul Krugman’s of the world talking about how wrong-headed those policies are that manages to get some air time on our corporate media. Sadly voices like his are too few and too far between.^[16]

To do as Heather suggests, however, requires that justice supplant greed; that rather than hold our society as ideal or as the best that can be achieved on earth, we consider the failings of our political, economic, and social systems and implement remedies for those failings; that we reconsider policies which serve institutional or corporate rather than broad social interests such as the War on Drugs,^[17] our so-called “criminal justice,”^[18] our endless wars,^[19] our neglect of climate change even as extreme weather becomes increasingly common,^[20] and our haste to rescue banks while leaving the unemployed to twist in the wind. To do all this requires not just intelligence but an honest examination of evidence.

Which in turn strongly suggests that short of a revolution, I’ll never be employed again.

1. ^[1]Kim Brooks, “Is it time to kill the liberal arts degree?” Salon.com, June 19, 2011, http://www.salon.com/life/feature/2011/06/19/time_to_kill_liberal_arts/index.html↩
2. ^[2]ARK, “Enlightened but Unemployed,” Truthdig, June 19, 2011, http://www.truthdig.com/eartotheground/item/the_hangman_comes_for_the_academy_not_wall_street_20110619/↩
3. ^[3]Robert J. Samuelson, “The great jobs mismatch,” Washington Post, June 19, 2011, http://www.washingtonpost.com/opinions/the-great-jobs-mismatch/2011/06/19/AGWdB3bH_story.html↩
4. ^[4]Colleen Donovan and Calvin Schnure, “Locked in the House: Do Underwater Mortgages Reduce Labor Market Mobility?” [abstract] June 17, 2011, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1856073↩
5. ^[5]Mark Thoma, “Do Underwater Mortgages Reduce Labor Mobility?” CBS MoneyWatch, June 15, 2011, http://moneywatch.bnet.com/economic-news/blog/maximum-utility/do-underwater-mortgages-reduce-labor-mobility/1429/↩
6. ^[6]Jinzhu Chen, Prakash Kannan, Prakash Loungani and Bharat Trehan, “New Evidence on Cyclical and Structural Sources of Unemployment” [Working Paper], International Monetary Fund, May 2011, http://www.imf.org/external/pubs/ft/wp/2011/wp11106.pdf↩
7. ^[7]Michael A. Fletcher, “Few in U.S. move for new jobs, fueling fear the economy might get stuck, too,” Washington Post, July 30, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/07/29/AR2010072906367.html↩
8. ^[8]Fletcher, “Few in U.S. move for new jobs.”↩
9. ^[9]Thoma, “Do Underwater Mortgages Reduce Labor Mobility?”↩
10. ^[10]Associated Press, “Bush, Bernanke endorse economic stimulus,” MSNBC, January 17, 2008, http://www.msnbc.msn.com/id/22705103/↩
11. ^[11]Heather, “Paul Krugman Knocks Down Dan Senor’s Fear Mongering Right Wing Talking Points on Debt Burden,” Crooks and Liars, July 5, 2010, http://videocafe.crooksandliars.com/heather/paul-krugman-knocks-down-dan-senors-fear-m; National Public Radio, “Jobless after 50? You may be out of luck,” Southern California Public Radio, October 9, 2010, http://www.scpr.org/news/2010/10/09/jobless-after-50-you-may-be-out-of-luck/↩
12. ^[12]Samuelson, “The great jobs mismatch.”↩
13. ^[13]Brooks, “Is it time to kill the liberal arts degree?”↩
14. ^[14]Robert E. Scott, “Heading South: U.S.-Mexico Trade and Job Displacement after NAFTA,” Electronic Policy Institute, May 3, 2011, http://epi.3cdn.net/fdade52b876e04793b_7fm6ivz2y.pdf; David Wessel, “Big U.S. Firms Shift Hiring Abroad,” Wall Street Journal, April 19, 2011, http://online.wsj.com/article/SB10001424052748704821704576270783611823972.html.↩
15. ^[15]Thomas Frank, What’s The Matter With Kansas? (New York: Holt, 2005).↩
16. ^[16]Heather, “Paul Krugman Knocks Down Dan Senor’s Fear Mongering Right Wing Talking Points on Debt Burden.”↩
17. ^[17]Brian Bennett, “U.S. can’t justify its drug war spending, reports say,” Los Angeles Times, June 9, 2011, http://www.latimes.com/news/nationworld/world/la-fg-narco-contract-20110609,0,1742011.story; Global Commission on Drug Policy, “Report of the Global Commission on Drug Policy,” June 2011, http://www.globalcommissionondrugs.org/Report; Meteor Blades, “Endless ‘war on (some) drugs’ fills our prisons, wrecks lives and wounds society,” Daily Kos, June 10, 2011, http://www.dailykos.com/story/2011/06/10/983932/-Endless-war-on-(some)-drugs-fills-our-prisons,-wrecks-lives-and-wounds%C2%A0society; Ben Wallace-Wells, “How America Lost the War on Drugs,” Rolling Stone, March 24, 2011, http://www.rollingstone.com/politics/news/how-america-lost-the-war-on-drugs-20110324↩
18. ^[18]Jeffrey Reiman, The Rich Get Richer and The Poor Get Prison, 7th ed. (Boston: Allyn and Bacon, 2004).↩
19. ^[19]David Benfell, “Time to take the toys away,” DisUnitedStates.org, June 17, 2011, https://disunitedstates.org/?p=3840↩
20. ^[20]Robert Henson, Rough Guide to Climate Change, 2nd ed. (London: Rough Guides, 2008); Fred Pearce, With Speed and Violence: Why Scientists Fear Tipping Points in Climate change (Boston: Beacon, 2007).↩