Monday, October 14, 2013

It was fun being Unemployed!

From March 2010:

Having been unemployed for a long time now, I and my family are at the mercy of the continual incremental increases in the unemployment. I am grateful, but as time goes on and hiring has lagged the rebound in the stock market by a year, I become continually more pessimistic about employment in the short-term. I think the media plays a part in this. Now the news in my area trumps when there are job openings in low wage areas. A while back there was big news that Home Depot would be ramping up with several part-time openings. This is how you make discouraged workers ever more hopeless.

The vast underclass of surplus labor just has to watch in horror, hoping the government's largess doesn't end, because there are many in my boat. There are even more that have fallen through the cracks. They never were eligible for the benefits because they're inconvenient for capital to fund. I'm just waiting for my own benefits to stop. They never were big, as they represent more than a 50% cut in my former wage. However, with austerity measures in my household, we have been able to adjust to a new normal.

This new normal is not the American dream that I was sold in school and college. Many who bought into it and did well in school and studied hard are in trouble, and disenchanted with the system. These people have radicalized on both the right and the left. Our system has been built on consumption, and we hope to return to consumption, but that's not a long-term plan of any stability. Right now the market is failing many of my peers, as well as myself.

What's needed right now is a return to new deal or great society ideals. I'm losing job skills and future potential earnings by the day as I sit idle. I don't want to be idle. My background is not in any sort of heavy labor, but I would gladly dig ditches in a make-work program if that gave me the needed sense of accomplishment and creation. The main caveat is that a potential resurrection of the WPA must be new work in infrastructure or building for the common good. It must not replace work already being done or planned, the so-called 'shovel ready' projects. Right now the government is paying for my labor and getting nothing from it.

I know this would increase the cost, as the training and material costs would increase, but this would bring back a sense of self to many workers who lose who they are in a society that creates identity in your occupation. When asked to describe yourself or others, occupation tops many lists of identifiers. In our country right now, too many people are nothing.

Thursday, October 10, 2013

Criticism Easier than Construction: Readng Steve Keen's "Debunking Economics"

I had been meaning to take a look at this book earlier, as the premise sounded interesting, and Keen is an interesting fellow on the blogs and twitter, but the price for a paperback was prohibitive.  I put in for my library system to pull it, and I was excited to get it and read it.
However, my main piece of advice is this: If you’re interested in the book, buy it if you can.  I say that because reading it, there were so many points I just wanted to grab a pen or  a highlighter and make a note, because in the highest praise, this book engaged me and made me think.

In the book, Keen starts at the foundations of microeconomics and shows why the assumptions that the standard is built on are false, and thus the whole of the standard model is untrue.  He does a good enough job and I can remember no major holes so I have to say he did a good job.  He did well enough that I caught myself paging through my micro textbook making notes to myself like “THAT’s a convenient fiction” so I can tell he made it in my head.   He does draw the outlines of a potential new sort of economics, based on Minsky’s Financial Instability Hypothesis, but he keeps enticing the reader with a new book that so far does not exist.  That’s the book I want to read.  For me, my favorite parts of the book are the normative “What is to be done?” section that usually only takes up the last five percent of a critical text.  Here Keen just entices….or kicks the can, criticism being easier than construction. 

Unfortunately, he is attacking both the citadel and the windmill of orthodox economics, so he will be largely ignored by the professorial class. (This is one of the threads running through the text, Keen’s outsider status in spite of having his neoclassics down cold.)  As a  heterodox economist, he can take liberties like actually looking at what Marx and Keynes said.  Though as a Marxist, I was both glad he takes my totem seriously for analysis, but was made sad when he took the threads of Marx’s work and tried to pull them apart and throw out what he doesn’t like, such as the Labor Theory of Value, and keep what he wants.  You can’t disrupt the canon, Professor Keen.

But I digress.  What he does do is explain the basics that he wants to pull apart of the neoclassical edifice so well that you could extract it and make it part of a textbook if you throw some sort of trendy technological interface in there and have questions…and charts.  The major flaw to me is the lack of charts in the book.  I think graphically, and there are so few charts in here that I had to translate the verbiage into charts in my head, and there’s no telling how close what he said corresponds to what I saw in there.  If I understand right, they are accessible online, but that’s a huge disruption in my reading style.
And finally, it is not an easy book to read.  The professor acknowledges this at multiple places in the text, to a point where his self-deprecating asides takes away a bit from the overall authority that he speaks with on the topic.   

Overall, this is a very strong book that I feel any student of economics would be bettered by reading.  He or she just needs to do one thing: actually buy it so the copy is yours.

Friday, October 4, 2013

Keynes: The math is hard

Loosely associated thoughts on Keynes's "General Theory"

1) The General Theory is a landmark work in the science of economics. If you agree with the general conclusions or deny them, you cannot deny the influence of the work. This is the same with Keynes as it is with Hayek or Friedman or Fischer or Marx or Smith. This work, as the others, are part of the cannon. Keynes was wrong in places. He was right in others. Different schools of thought may disagree on which place is which.

2) Part of the power of the work is that it is set up in response to an orthodoxy that is no longer demode. Poor professor Pigou is beat over the rocks for his poor understanding of economic phenomenon. Pigou is a minor figure in history were Keynes not to attack him; instead he has an immortality that is undeniable. The only possible problem here is that Pigou is a straw man, as most contemporary readers will have to rely on Keynes's characterization of Pigou's positions.

3) To get into terms of contemporary financial debate, Keynes was in favor of a financial transition tax, which we would propose as a "Tobin Tax" nowadays. Not that I'm a Keynesian, but within the context of capitalism I tend to agree with the economists aligned with his tradition more than the other side(s).

4) This is a big point, but Keynes acknowledges that the book is intended for professional economists. There is a lot of stuff here that is opaque to the lay reader. S/he might need a class on the topic to walk him/her through the arguments. I know I had to brush off my calculus to get through large sections. It might have better to have been on a white board.

5) However, a lot of the stuff is accessible. Keynes is a good writer. He had to be, considering the group he ran with. He was the square in the hippy house, but a certain style is evident in his writing. Though a large part of the chapters is devoted to the mathematical basis of his argument, he still explains what he is talking about. This comes at the end of the chapters in surprising little nuggets. You can't escape his beautiful metaphors, especially his most famous one about the market, where the function is to find "what average opinion believes average opinion to be".

Posted 3.2.11 at