Quote:
Originally Posted by Tyrone Slothrop
This is not a semantic point. We all know there are no jobs for construction workers. If we had an economy where there were lots and lots of employers looking unsuccessfully for, say, high-tech workers, then we would have structural unemployment, with a mismatch between construction and high tech.
That's not the economy we have. There is no mismatch, because there is massive unemployment and there is NO part of the economy creating lots of jobs which are going begging. Structural unemployment is not the reason we are so full from full employment. If you think it is, you have to not only point to some part of the economy where things are lousy for workers, like construction, but also to some part of the economy where the opposite is true. There isn't one. The employment situation is lousy all over the place.
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Yes it is. Think globally. There is a huge need for workers we don't create. This is a global economy. Our unemployment problem is not cyclical. Perhaps we can disagree over whether it is classically structural. Fine. The point is, large sections of our workforce will never be competitive again, or even work again.
Whatever that is, it's not cyclical. And you're wrong if you think we'll return to something like 5% unemployment in the next decade. We will hemorrhage jobs, or at best stagnate in terms of employment, until the cost of foreign labor meets ours, and the skill sets of greater numbers of our workforce meet those of skilled workers abroad.
You can't argue against that point. You will. But you won't succeed. It's ironclad fact.
And please, don't say, "Inflation is going to cause their workers to become more expensive. The more the Fed prints, the more their labor costs rise. Another basis for further Keynesian policies!" Debasement of one's own currency is exactly what Ferguson has argued leads to trade and real wars. And that's only if it works. Right now, it appears that every time our numbers swoon, the world swoons with us. This means emerging markets have not yet decoupled, and are probably not self-sustaining enough to do so any time soon. So even if we kept on printing, it probably wouldn't have the desired result of making our workforce more competitive versus competition.
That's the conundrum. Print like mad and it works, trade wars, then real war. Print like mad and it doesn't work, an exercise in futility that punishes domestic savers. Many of whom are retirees.
You clearly worship Keynes. You might also consider Friedman: No free lunches. A position with which Keynes would agree.
