It’s the deliberate hollowing out of the economy, stupid

“Why Don’t the Unemployed Get Off Their Couches?” and Eight Other Critical Questions for Americans:

But aren’t there small-scale versions of economic “rebirths” occurring all over America?

Travel through some of the old Rust Belt towns of this country and you’ll quickly notice that “economic rebirth” seems to mean repurposing buildings that once housed factories and shipping depots as bars and boutiques. Abandoned warehouses are now trendy restaurants; a former radiator factory is an artisanal coffee shop. In other words, in a place where a manufacturing plant once employed hundreds of skilled workers at union wages, a handful of part-timers are now serving tapas at minimum wage plus tips.

Of course the thing about looking at any individual unemployed person is that you can always find something they can do to get a job, even more so when you don’t care what job they get. However, doing so for all of them is impossible in a situation where there are more unemployed than there are job offers.

A rising tide lifts all boats — not!

John Emerson on why Thomas Piketty “strikes at the heart of liberal Democrats’ first principle of political economy”:

Piketty’s “r>g” formula denies specifically this point. And not only did he disprove the liberal economists’ fundamental principle, he did it using the tools of liberal economics. For forty years or so American workers’ incomes have been stagnant or declining, and as the years have gone by this tendency has intensified. But there has been no theoretical explanation for these very evident facts, and without a theoretical explanation liberal economists felt that their hands were tied; these were things that everybody knew, but no one knew it in a proper scientific way.

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Worried about the economy but not sure what exactly the problem is? Tried to educate yourself but it’s all too hard? Help is at hand, with the business Insider’s Complete Guide To America’s Jobs Crisis And The Failure Of Monetary Policy Using Animated Gifs. If nothing else you can enjoy the pop culture references.

Uncreative destruction

But it’s something else living in a working neighbourhood, which in normal times flails along with its collective head just above the water, being gradually and through the systematic application of government policy suffering a kind of collective punishment; and the organic commerce which had evolved to serve it beginning to go down with it. The top end of Cheetham Hill Road was always low-margin. Shops would come and go, but there always seemed to be somebody else ready to have a try. These days it’s looking more than a bit gap toothed. It’s an odd feeling watching economic repression imposed around you; like living in the middle of a crime in progress.

Jamie on the consequences in his own neighbourhood of the ConDems’ economic policies.

How the Irish get burned on debt repayal

But I pointed out to him that the money the Irish people were repaying by accepting decreases in government spending and increases in taxes was simply going to the central bank and from there it was being destroyed. I explained that what had happened was that the central bank had created a load of new money and thrown it into the crumbling Irish banking sector. Now the Irish people were paying back this newly created money so that it could be destroyed by the central bank.

Victory to the public sector workers

Today public sector workers in the UK are on strike. According to a BBC poll,
the majority of the British public supports them:

An opinion poll commissioned by BBC News suggests 61% of people believe public sector workers are justified in going on strike over pension changes.


Younger people, it also suggests, are considerably more supportive of the strikes than pensioners; almost four in five 18 to 24-year-olds back the action, a little under half of over-65s do.

Half a million public sector jobs have already been lost and the ConDem government yesterday confirmed that more cuts were coming, which may mean another 300,000 people losing their jobs as the UK is to cut its way to becoming a growth orientated export driven economy. Those workers who haven’t lost their jobs have to swallow pay freezes (extended by two years of below inflation salary growth yesterday), less pension and having to work longer to get their pension (brought forward yesterday). These are all cuts supposedly driven by the government’s desire to bring down Britain’s debt, yet what was also revealed yesterday was that it’ll have to borrow up to 100 billion in the next few years, or more than 30 billion over what needed to be borrowed in Labour’s plans until 2014 if their policies had been maintained…

Instead these and other ineffectual crisis measures (certain tax cuts, less protection for workers against being fired, undosweiter) are ideologically driven, a wish list of their pals in the City. These measures are not intended to solve the crisis, but to get a bigger share of the country’s wealth to the one percent, while everybody else suffers. It’s simply fat cats stuffing their pockets. The public workers strike is the next major act of resistance against this agenda, after protests earlier this year by other affected groups, including an earleir union led day of protest in March for which half a million people turned up.