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Slithering towards exculpation

By Al Schumann on Friday March 20, 2009 03:03 AM

The Economist, previously and charitably described as "eternally gaseous", is attempting to get real with its readership on the jobs crisis. They believe that the asset immolation was caused by excessive borrowing and the solution, in the long run, is increased labor flexibility. Labor, not content with its golden lunch pail, created this mess and will eventually have to make up for it by accepting less security. Once they all calm down. The editorial is actually less coherent than that, but I want to jump ahead to the main point: it is obvious that none of the writers have every held a job or run a business in a sector that could not count on cradle to grave state support.

Labor "flexibility" does not make job creation easier. It eliminates labor's bargaining power, which keeps the cost of labor down, for a little while. Eventually it destroys demand and then there's no need for labor at all. Once you are no longer providing a service or offering a product, you don't need a labor force. This simple lesson was accessible to a vicious, narrow minded, serial failure named Henry Ford who, after repeated destruction of his own endeavors, realized one day that workers who couldn't buy a product, wouldn't.

Inflated collateral to facilitate borrowing delays the need to pay wages, but inevitably the process reaches a breaking point. Which is where we are now. The strongest businesses in sectors that can demand a bail out are doing so. Those that can't are folding. This reduces demand, which reduces the need for a labor force that can produce the product or offer the service that once had a market. Through a mysterious transformation, understood by only 90% of humanity, the loss of livelihood affects people's ability to make payments on what was once collateral, but is now the financial equivalent of toxic waste.

It would be helpful if the slackers at The Economist could get their sticky little fingers out and try to find a job in the real world. Then, perhaps, they would understand. Work is hard, but it would help them feel better about themselves. The good feeling they could get from it is the first step on the road to shrugging off a crippling sense of entitlement and exiting the culture of dependency.

Comments (10)


"The bare truth is that the more easily jobs can be destroyed, the more easily new ones can be created"

this is like savings always finds
productive investment

says law of jobs

these new jobs are
higher productivity jobs ...for all
which means
higher wages ....for all

there is no
spontaneous polarization of job productivity and equally
no polarization of job wages

virtue is rewarded in this world


Financial Times started a series last week called The Future of Capitalism. One of the subheads included a reference to Marx, and the general theme was "will capitalism survive?", but these were only teasers. Overall, about the same treatment of the issues as The Economist.

Al Schumann:

I doubt their thinking even goes that far.

If you pick just one inane passage from the editorials, you miss the full glory. They clearly don't see opaque issues of uncapitalized insurance on unmanageable leverage as a problem. It's the system's fault! The Devil made those poor banksters do it, and of course labor benefited from being able to borrow so much. Now, sadly, labor must pay the price. The suffering and blight tears at The Economist, but less security will eventually equal more security.

They suckle a perverse Lump of Labor fallacy: there's usually plenty of work, but there's only so much that can be given to labor and, certainly, only so much of the surplus value for labor to keep. Otherwise inflation will run rampant and jobs will be destroyed.

They can't comprehend that most hiring decisions are made on the basis of meeting current demand and fulfilling expected demand, with a need to coordinate against every race to the bottom entailed by capitalism. They think hiring is an act of noblesse oblige that gets companies in trouble.

Al Schumann:

That first was a response to Owen.

Seneca, I haven't looked at the FT's series. They're the sister paper of The Economist, but they're usually a bit more literate. They're published for the higher functioning neoliberals. I think I'll give that series a miss. I have a Lump of Derision problem. There's only so much of it to go around.

Say's Law is still a Law, because They says It is. Ain't no cotton-pickin' robot of a fact gonna git in Their way, neethur.

What was that one dude's line about tragedy and farce?


I just got the allusion in Michael's headline: Slouching (slithering) toward Bethlehem (exculpation). All ex English grad students on this site, please raise your hands!


Whoops -- it was Al's headline.

Al Schumann:

I can't lay claim to conscious allusion. I was a in a hurry to come up with something and out that sprang. But if I were going to allude, that wouldn't be the poem I'd pick. The rough beast's hours are well underway; there might be a bad, salacious joke in that, something more my speed.


I find lumps. Every where in the gravy these days

Will it still
go down
the wage smurfs' throats ??

Add value
subtract wages

Relations of production
As the great harvey might say
Grow buggarishier every two weeks


Just saw
An atlanta fed calc
Jobs might not get back to the absolute level of
Dec 07 for eight more years
Now a seriously simple minded calc
Lies behind this
And another set of assuptions leads to a job recovery in 14 months

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