The Jefferson Tree - A platform for debate and discussion of current events and politics...

Stephen Moore’s Ridiculous Anti-Clean Energy Rant

Hard right-winger Stephen Moore took a break from pushing debunked trickle-down economic policies to take a pathetic shot at clean energy.  Let the stupid begin. …radical Greens, one of the most influential political forces in America today… Seriously?  He goes on to mention the famed Sierra Club as one of these forces.  And where did they rank in 2013 on lobbying: 755.  In fact, if we look at the top 50 interest groups giving to members of Congress this year, no sign ...

Anti-Israel Policies/Actions Is Not Anti-Semitsim

There have been growing protests in Europe against the mass murder of Palestinians in the Gaza Strip by the State of Israel. These actions are in response to the IDF killing 500 Muslims there with the vast majority of them being civilians. But what is troubling about these movements is, according to this article in the NYT, an anti-Semitic tinge has taken place at these protests. The story reads that in France: Several recent pro-Palestinian demonstrations in Paris have boiled over ...

Warren For President?

Today at the the annual Netroots Nation conference in Detroit, the nation’s largest gathering of liberal activists and organizers, Massachusetts Sen. Elizabeth Warren (D) reportedly drew an applause that Hillary could only dream of. According to NYT and Politico reports, Warren was a rock-star while Hillary Clinton, the likely Democratic candidate for President, was absent. Warren’s populist talking points and her history of taking Wall Street to task (remember that Warren was an early advocate for the creation of a new Consumer Financial ...

Social Protest Literatue at Sparking The Left

Here at STL we are starting a new feature. In between our political-insight posts, I will start publishing excerpts or entire pieces of great literature that speak to crucial social and political issues which span the centuries. Though almost all in the Western tradition, the subject matters are transcendental. Now first to name my source, I am taking pieces from Upton Sinclair’s selected and edited collection “The Cry for Justice: An Anthology of the Great Social Protest Literature of All Time.” ...

Pulitzer-Winning Journalist Detained for Being Undocumented

I was first brought aware of Jose Antonio Vargas’ story last week in a piece he penned in Politico. He explained that he was in the Rio Grande Valley, in the city of McAllen, just north of the Mexican border. He was there to see first hand the tens of thousands of undocumented children, most of them from Central America, and observe how they were being treated. The trip was also used for a news conference appearance and vigil organized by United We Dream, ...

GOP Refuses Funding for Border Children Projects

A humanitarian crisis unseen before at our borders is becoming more and more urgent everyday at Rio Grande Valley, TX, and other Southwest locations. And yet the GOP is arguing over numbers. Yesterday President Obama requested an amount of $3.7 billion from Congress to help aid the 57,000 unaccompanied minors who illegally crossed the border from the Mexico side since October. They are mostly from violence-ridden Central American countries, like El Salvador, Guatemala, and Honduras (Honduras has the world’s highest murder ...

Problems galore for the new government headed by Mr. Narendra Modi in New Delhi – Imperative for the first time PM and his council of ministers in governance amidst multiple challenges

The phenomenal victory for Mr. Narendra Modi and his party (the BJP) in May 2014 general elections has not only drawn the adulation of people world over but also silenced all its die hard critics at home and abroad. It was so stupendous and stunning that even the American government and its top leaders across party lines acknowledged Mr. Modi as the emerging democratic leader of the world, setting aside their past antagonism as an error of judgment, not based ...

Embarrassing Weekend for NSA and CIA Good for Democracy

U.S. intelligence took a couple of pretty hard slaps in its face this past weekend and, when reading the articles about their wasteful and ridiculous actions, the slaps were clearly justified. First off, it was announced on Friday that Germany had arrested a man accused of spying for the United States and passing on the details of a German parliamentary committee’s investigation.  It’s pretty disgraceful that the U.S. is spending taxpayer dollars to buy spies so we can know about an ...

Has Putin Over Reached Once Too Often?

My, oh my.  We've watched this man make mince meat of Obama over the past several years.  Each time you could see the smirk broaden and the swagger get more pronounced. He and his allies - Iran, China, Syria and North Korea were truly enjoying themselves. But as happens with a lot of bullies, they get over confident and suddenly everything around them collapses. I'm wondering if this is the case with the downing of the Malaysian passenger jet. With the death ...

If Only It WERE The Heat!

What a day.  A passenger plane has been shot down over Ukraine uncomfortably close to the Russian border. Hamas reneged on the humanitarian cease fire so Israel launched their ground offensive. Children still pour across the border while Congress dithers. It's now being reported parents are giving them birth control in case they are raped during the journey. Along that line former member of Congress, Todd Aiken, who once talked about legitimate rape and the idea that women's bodies protected them from becoming ...

Hannity's Histrionics

For a person who doesn't have much faith in the intellect of pundits, I wonder why I watch them so often.  I wonder even more why the cable outlets and networks that employ them don't take more care in who they hire. Many of them get on crusades that bear no resemblance to reality.  Sean Hannity is one of the most prominent. The night before last  he was on his Bowe Bergdahl kick demanding to know why he was returned to ...

Do Actions Speak Louder Than Words?

If the President could run away from the border mess any faster I'm sure he would. It's being said it's because being seen in the setting of kids crammed into confined spaces with their scabies and lice would reflect badly on him.  It could even be his Katrina.  Well, maybe.  But who's fault is that? It goes to show his handlers aren't as smart as they think they are.  For one, drinking beer and shooting pool in Colorado, a state where ...

The Kids Always Went Home

Watching the immigration mess going full bore brought to mind a lot of things that have involved children from other nations.  The first thing that comes to mind is the Disney song It's a Small World After All that speaks to all we have in common. Hopes, dreams, all the warm fuzzy stuff. We've had exchange student programs where a student from another country lives with a local family to learn not only academics but what life in American and Americans ...

The Militia Is Coming, The Militia Is Coming!

That's all we need! News has it a call has gone out for militia, both unarmed and armed, to gather along the border to help private land owners protect their property in something called Operation Save Our Borders.  Terrific! Remember how well it went when militia turned out to help to  help Cliven Bundy in his fight over Federal grazing rights in Nevada?  It came within a hair's breadth of turning violent. I really feel for the border towns who are the ...

Will Cheney Help Or Hurt The Republicans In The Mid-Terms?

Will the re-emergence of Dick Cheney help or hurt the Republicans in the mid-terms?  There is so much going on about which voters are rightfully incensed my guess he will have little impact. I think it depends, however, on what happens in the middle east over the next couple of months. Those who believe it wouldn't be in the mess it is if it weren't for the Bush/Cheney policies and rush to war will be reminded of just that - the ...

So Sue Me

I often wonder these days how our country is going to survive the remainder of Obama's term.  Whether or not you agree with the Supreme Court decisions, they have been made never-the-less and the President has been slapped down on many occasions.  Sometimes unanimously. So why, I wonder, has the President decided to continue his mantra of it's my way or the highway.  He complains endlessly about the Republicans refusal to work with him.  House Speaker Boehner explains one reason is ...

It is left, therefore, to the juries, if they think the permanent judges are under any bias whatever in any cause, to take on themselves to judge the law as well as the fact. They never exercise this power but when they suspect partiality in the judges, and by the exercise of this power they have been the firmest bulwarks of English liberty. Thomas Jefferson
Please visit the authors blog by clicking on the link below!

Ralph Musgrave - Ralphanomics

If the market can’t allocate the unemployed to jobs, why not have the bureaucracy do it?

In a perfect market, a surplus of people with a given set of skills and experience (i.e. a particular “type” of labour) would cause a drop in the wage for that type of labour. The market would clear, and all members of that type of labour would find employment. So given a perfect market, there’d be no unemployment.

At least that would be the case assuming there is nothing of a macro-economic nature preventing full employment. E.g. let’s assume the above wage cuts result in instantaneous price cuts, which increases the value of the monetary base and national debt. That in turn means a rise in value of private sector net financial assets, which in turn raises aggregate demand. (That’s the “Pigou” effect.)

So perfect market = full employment. Imperfect market = unemployment. That’s the problem. Now for the solution – well, an improvement on the current situation anyway.

The market and the bureaucracy.

There are two ways of allocating economic resources: allocation by the market and allocation by the bureaucracy. Since the market can’t allocate the unemployed, what system should the bureaucracy adopt in order to do the allocation? How about this.

Assume that given a decline in unemployment, every employer would expand numbers employed in the same proportion. That is a crude assumption. But it’s very roughly correct.

So assuming the objective is to expand numbers employed by each employer in the same proportion, employers need to be told, “You can expand your payroll by X%, and the additional employers will be free. Moreover, this is something you really ought to do because your competitors will probably be doing it, which will cut their unit costs. I.e. if you don’t do likewise, your competitiveness will decline.”

Hey presto: unemployment falls.

Well that’s the theory. Now for the possible problems.

Would the free employees displace regular employees?

Obviously it’s impossible to guarantee that out of the millions of employers in the country there would never be an instance of regular employees being displaced.

But the more important point is to consider the main “overall” or macroeconomic effects. And the important point here is that the above mentioned rise in aggregate demand would mean that OVERALL, there’d be no net displacement. That is, on balance, there’d be a net rise in numbers employed. (Incidentally, in the real world, there’d be no need to rely on the Pigou effect: governments can of course raise aggregate demand whenever they want).

Moreover, there are several measures that can be taken to dissuade employers from using free employees as substitutes for fully viable employees. For example if the time that a given free employee stays with a given employer is limited to a few months, that induces employers to claim the subsidy only in respect of their LEAST PRODUCTIVE employees: no employer wants to lose their MORE PRODUCTIVE employees.

And finally.

And finally, smart readers will have noticed that the above system comes to the same thing as a “Government as Employer of Last Resort” system, of a particular type. It’s an ELR system under which the unemployed are allocated to EXISTING employers, public and private, rather than allocating them to SPECIALLY SET UP EMPLOYERS doing just public sector type work (which is what the WPA and numerous other ELR systems have consisted of).

In other words, the above is a piece of theory which underpins the idea: “allocate ELR employees to existing employers, public and private.”


Ralph Musgrave - Ralphanomics

Author: Ralph Musgrave - Ralphanomics

I wrote a book on unemployment recently with James Galbraith, and others. Galbraith is one of Obama's economic advisers. I love the different cultures that exist in this world. I took an interest in them long before the daft word 'multiculturalism' was widely used. I want to see these cultures preserved. I want to see Tibet staying Tibetan, and Britain staying British.

2 comments to If the market can’t allocate the unemployed to jobs, why not have the bureaucracy do it?

  • Ralph,
    I had to read this three times to even begin to make sense of it and the first two times I thought it was a satire on bureaucracy, only on the third read did I realize you were seriously suggesting that government take an active role in managing and determining the allocation of the work force in the free market.

    Please tell me Ralph, when has any government had success in managing anything. You actually suggest using the most inefficient system of management ever concieved, government bureacracy, as a way to manage the work force in private industry. Your concept has so many flaws I don’ t know where to begin.

    First off, although you refer to them as free employees, the reality is that they would in effect be the most expensive in the workforce! Their wages, training, and benefits would be paid by the taxpayer, who would also be responsible for the costs of maintaining the massive bureacracy needed to shuffle these “free” employees around every 90 days , actually monitor them, and to police the system to ensure that neither employer or employee is falsely claiming government funding. Based on previous examples of government efficiency in employment subsidy programs you would have unscrupulous individuals making claims for employees whose names came off of tombstones. In fact government bureacracy certainly manages to keep a tight rein on fraudulent claims made through Medicare don’t they?

    Secondly, the very suggestion that you would limit these “free” employees stay at any one job to a period of a few months suggests to me that you have probably built yourself a career in academia or the very bureacracy you apparently have so much faith in. Those of us in the private workfforce who have been involved in hiring and training employees realize that in most cases an employee has limited value in the first few months, depending on the particular job it may take longer than that just to get them up to speed. In fact in some cases, particularly in small business the process of training new hires actually decreases a businesses efficiency and output as it is generally the most productive and experienced employees that are assigned to train the new hire.

    I could go on for days about how impractical, naive, and just plain ludicrous your ramblings on this subject are, but I suspect you will simply counter with this or that theory, the key word being “theory”. You remind of a communist party member that wiill tell you what a wonderful political concept ommunism is and how it is the end all be all solution to societies problem. Yet when you ask them for an example of this wonderful concept in practice, they change the subject or pummel you with quotes from Karl Marx or Lenin.

    I can only prayer that you are in fact a bureaucrat, and not involved in academia in any way, hale, or form as it sends shivers down my spine to imagine someone teaching this drivel tou our youth.

  • By the way, please excuse any spelling errors. I am writing this on an IPad and am still adjusting to screen size and the lack of a tactile keyboard, on top of that it’s spell check often takes liberties that I don’t catch before hitting the send button.

    However I suspect that if your “free employees” we’re being utilized by Apple I would be writing this using a mallet, a chisel, and a piece of sandstone.

Leave a Reply