Age of Disorder

[Bob Butler 54]

(09-12-2020, 04:37 PM)Warren Dew Wrote: I expect lack of reading comprehension from Bob, but you can do better.  I'm citing 1929 to 1946 as the period of change, not the age of organized labor.  The age of the industrial barons collapsed with the 1929 crash, and there followed a period of groping for solutions, with socialist and Communist movements opposed by the remnants of the industrial baron culture.  After 1946, with the excesses of the 1935 National Labor Relations Act trimmed by the 1947 Taft Hartley Act, there was a period where organized labor was the most powerful force in the economy, and yes, that lasted through not only much LBJ's, but also much of Nixon's administration, until it came crashing down with the oil shock of 1973.

Empowerment of labor was important in 1929, and when its form was stabilized in 1947, it took a form that was useful for decades.  However, ossification of the regime in the face of a changing economy, along with the development of Arthur Okun's "invisible handshake", which provided union members with benefits at the cost of nonunionized consumers, caused it to be counterproductive by the 1970s.

This is similar to what happened with the neoliberal regime.  Supply side economics was sound, but since it was established in a period of labor surplus with shortages of savings and capital, the implementation ended up focusing on increasing the supply of capital.  Ultimately this empowered the owners of that capital - in particular Silents and Boomers with fat retirement accounts - at the expense of workers.  By 2008, the neoliberal regime had clearly become counterproductive; there was plenty of savings and capital, but workers had been frozen out of the pie for decades.

Redistribution isn't the solution, since it would just consume the capital without fixing the system.  A return to labor unions in their 1950s and 1960s form is likely not the solution either, since work today isn't the one size fits all assembly line activity that characterized the labor union period.

Likely the solution will involve immigration restrictions so that employers can't just import cheap labor, along with, at a minimum, tax mechanisms to distribute more of the benefits of productivity to workers, and less to nonworkers, such as savers, investors, and those on means tested welfare.  The details of the solution will likely take another 5-10 years to figure out - or to luck into - though.

The Republican Voodoo Economics scheme of applying stimulus in good times and bad conflicts with the traditional approach of spending in bad times and paying off the debt in good.  Voodoo is good for a few terms, but after that it collapses and you have to let a more responsible party fix it.  The failures were in the ‘it’s the economy stupid’ and 2008 great recession periods.  Naturally, Trump went all Voodoo again, but the coronavirus caused the economy to collapse early with his failure to fight the virus.  I see this effect of the Democrats having to fix Voodoo failures as going a long ways to driving the unraveling see saw.

Now Warren has a bunch of excuses for the bad economic times which amount to Voodoo can’t be made to work in the real world.  This conflicts, sort of, with my belief that Voodoo doesn’t work in the long term.  We could just compromise with an agreement that Voodoo just doesn't work.

This combined with the conservative push to fight labor unions, cut benefits and ship jobs overseas.  In short, stick it to the workers.  The net result is the need for a major change.  The younger generations are indeed getting shafted by the repeated collapses and division of wealth.

I can agree with the tax shifts to — ahem — redistribute wealth.  I could agree with letting the people here earn working wages rather than importing cheap labor.  We likely disagree that this should be done retroactively.  The conservatives and corporations brought the people in.  It seems off to punish them for providing the cheap labor that was wanted.  Rip children from parents and put people in cages?  Alas, the policies of the unraveling are driving a need for jobs.

That is if you assume jobs has to be the prime mechanism for controlling the distribution of wealth.  Productivity is up.  Division of wealth is up.  Labor is becoming cheap, existing in a surplus that drives down wages.  The economy used to be designed to create the luxuries ‘necessary’ to keep everyone employed and the division of wealth maximized, luxuries the virus is teaching us to do without.  Methinks this whole system needs to be rethought.  Methinks even Bernie Sanders and Elizabeth Warren have not bothered rethinking, but are staying safely within the box in what even the Democrats are proposing.

Another 5 to 10 years is if anything a short estimate.  My gut feel is that no one will bother rethinking the economy during the crisis years.  Everybody will want to flip into a high mentality.  Heck, some people still think Voodoo does just fine.  What is a collapsed economy after a few terms?  

It may be that we will have an interesting awakening.