Who Are the X Percent?

 

 

 

 

 

 

 

 

 

Introduction:

The emergence of Occupy Wall Street (OWS) has, if nothing else, has led to a welcome shift in political discourse away from conflicts over what kind of austerity policy to pursue and towards important questions of inequality. Unsurprisingly, this rhetoric has revolved around demography and identity:

Who are the 99%? Who is the 1%? What the hell is the 53%? And what do these labels mean when it comes to popular and other forms of political legitimacy, or arguments about political economy? Read on for some answers.

Beyond the American Jobs Act – Labor Demand Policy

Introduction:

One of the oddest flaws in American public policy is our persistent belief that unemployment and poverty can be dealt with in the main by improving the “employ-ability” of potential workers – in other words, by improving the quality of labor supply.

In the 1960s and 1970s, “manpower development” and “work training” were seen as the solution to moving the poor into a labor market that would surely sweep them up. When Reagan dismantled the War on Poverty and CETA, he left in place training programs as an acceptably bootstrapping policy sufficient to deal with the 1981-1983 recession. Clinton leaned especially hard on training and education as his solution to all problems – the early 90s recession, displacement from NAFTA, welfare reform, and rising inequality. While Obama has gone a step beyond mere job training with the public works of the stimulus bill, his more recent comments about “winning the future” show the persistent strength of supply-oriented labor market policy.

What a shame that it doesn’t work.

Living in the Age of Magical Austerity Thinking

Introduction:

Franklin Delano Roosevelt’s First Inaugural Address diagnosed the essential weirdness of recessions: “our distress comes from no failure of substance,” he noted. “Plenty is at our doorstop, but a generous use of it languishes in the very sight of the supply.” The reason for this? “Primarily this is because the rulers of the exchange of mankind’s goods have failed…they have tried, but their efforts have been cast in the pattern of an outworn tradition.”

This last factor, that in the grip of a massive decline in production, employment, and consumption, the world’s leaders decided to maintain the gold standard and free exchange of currency by balancing budgets, cutting spending, and raising taxes and then to do it over and over again, despite the failure of that policy to show any positive result, is to my mind an absolutely critical one. For all that the critiques of John Maynard Keynes and other dissident economists were eloquent and correct, the reality was that they had been making their arguments for over a decade to no avail.

Today, we seem to be stuck in a similar pattern, where the conventional wisdom on economic policy fails to produce results, but retrenches even more strongly despite this.

Why is this?