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Alan Greenspan, the economic "Godfather" of this era, viewed growing working insecurity as a positive development and expressed dismay that it may not continue

Alan Greenspan, the economic "Godfather" of this era, viewed growing working insecurity as a positive development and expressed dismay that it may not continue indefinitely [1]. EDIT: Removed suggestion that Greenspan publicly expressed a specific intent to foster worker insecurity. [1] https://chomsky.info/20120508/ https://chomsky.info/20120508/ [2] https://www.federalreserve.gov/boarddocs/hh/1997/february/testimony.htm https://www.federalreserve.gov/boarddocs/hh/1997/february/te...

shuckles 6y ago
FWIW, the quote and interpretation as presented in your link is rated a “pants on fire” lie by Politifact: https://www.politifact.com/factchecks/2014/jul/21/facebook-posts/social-media-meme-says-alan-greenspan-said-insecur/ https://www.politifact.com/factchecks/2014/jul/21/facebook-p...
- rmrfstar 6y ago
  Fair point. Chomsky has a tendency to exaggerate, but it's a difference of degree. "Continued low levels of inflation and inflation expectations have been a key support for healthy economic performance...Looking ahead, the members of the FOMC expect inflation to remain low and the economy to grow appreciably further. However, as I shall be discussing, the unusually good inflation performance of recent years seems to owe in large part to some temporary factors, of uncertain longevity... Atypical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity... The low level of work stoppages of recent years also attests to concern about job security. " [1] It is telling that Politifact left out that last sentence in its analysis of Chomsky's statement. [1] https://www.federalreserve.gov/boarddocs/hh/1997/february/testimony.htm https://www.federalreserve.gov/boarddocs/hh/1997/february/te...
  - shuckles 6y ago
    "Insecurity" in that quote is describing a perception on the part of workers which, the quote discusses, doesn't seem to be validated by actual job market data. In particular, Greenspan is offering it as a reason why there isn't as much wage inflation given the relative tightness of the labor market. He says workers aren't changing jobs to capture increases because they'd rather stay put. It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. A related, worthy question is why increasingly lower unemployment rates in the 90s (and even the 2010s) didn't show up in the Phillips Curve predicted increase in wages. My read of this quote is Greenspan speculating at an answer. I don't know if it's correct. I don't even know if economists today agree on an answer. In any case, he certainly doesn't seem to be cheering for precarity.
    - vkou 6y ago
      > It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. [1] The answer to your puzzle may be that employers have become a lot better at bargaining, lobbying, and union suppression than they were a few decades ago. It may also be the case that the government has become better at maintaining a high enough level of unemployment (through monetary policy) to prevent workers from gaining too much in a boom economy. [1] Any of the tech folks on HN try asking to not be subjected to an open office hell, prior to this COVID thing? How great of a bargaining position did the software-engineer shortage give you in that conversation?
      - shuckles 6y ago
        Plausible. Do you know if healthcare, higher ed, and housing are industries where cost trends are convincingly explained by neoliberalism, i.e. some combination of deregulation and promotion of free trade and free markets? Or are you saying that the problem of affordability in these sectors can and should be entirely resolved by higher wages?
        dillonmckay 6y ago
        Well, all three are heavily subsidized by the government, so I would argue it is the opposite of the promotion of a free market and deregulation.
        vkou 6y ago
        I wouldn't blame education costs or housing costs on neoliberalism, I'd blame them on availability of low interest, little down credit for housing and student loans. Which, while being a bit of a neo-liberal policy is not a cornerstone of neo-liberalism (nor is even controversial among the left, much to my chagrin). Medical care is, of course, it's own awful mess. Higher wages wouldn't fully solve either problem on a society-wide level. If you chang nothing else, I'd expect that costs of all three would rise until they soak up every spare penny of the middle class.
  - nl 6y ago
    It's absolutely "pant's on fire" level of misleading to label a fairly reasonable attempt at root cause analysis as a goal by anyone. I can say "the rise in house prices before 2008 appears to be mainly the consequence of permissive loan policies by banks" without meaning that I think either high or low house prices or permissive or non-permissive loan policies are good or bad.
- entropea 6y ago
  >Chomsky’s take on the substance of what Greenspan said seems reasonably on target. Read the entire thing. It's not quite "pants on fire", its just not an exact quote. OP posting "explicitly" is incorrect since it's from Chomsky, however.
  - shuckles 6y ago
    Chomsky and the original poster imparted a connotation which is simply not present in the original text.
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shuckles 6y ago

FWIW, the quote and interpretation as presented in your link is rated a “pants on fire” lie by Politifact: https://www.politifact.com/factchecks/2014/jul/21/facebook-posts/social-media-meme-says-alan-greenspan-said-insecur/ https://www.politifact.com/factchecks/2014/jul/21/facebook-p...

rmrfstar 6y ago
Fair point. Chomsky has a tendency to exaggerate, but it's a difference of degree. "Continued low levels of inflation and inflation expectations have been a key support for healthy economic performance...Looking ahead, the members of the FOMC expect inflation to remain low and the economy to grow appreciably further. However, as I shall be discussing, the unusually good inflation performance of recent years seems to owe in large part to some temporary factors, of uncertain longevity... Atypical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity... The low level of work stoppages of recent years also attests to concern about job security. " [1] It is telling that Politifact left out that last sentence in its analysis of Chomsky's statement. [1] https://www.federalreserve.gov/boarddocs/hh/1997/february/testimony.htm https://www.federalreserve.gov/boarddocs/hh/1997/february/te...
- shuckles 6y ago
  "Insecurity" in that quote is describing a perception on the part of workers which, the quote discusses, doesn't seem to be validated by actual job market data. In particular, Greenspan is offering it as a reason why there isn't as much wage inflation given the relative tightness of the labor market. He says workers aren't changing jobs to capture increases because they'd rather stay put. It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. A related, worthy question is why increasingly lower unemployment rates in the 90s (and even the 2010s) didn't show up in the Phillips Curve predicted increase in wages. My read of this quote is Greenspan speculating at an answer. I don't know if it's correct. I don't even know if economists today agree on an answer. In any case, he certainly doesn't seem to be cheering for precarity.
  - vkou 6y ago
    > It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. [1] The answer to your puzzle may be that employers have become a lot better at bargaining, lobbying, and union suppression than they were a few decades ago. It may also be the case that the government has become better at maintaining a high enough level of unemployment (through monetary policy) to prevent workers from gaining too much in a boom economy. [1] Any of the tech folks on HN try asking to not be subjected to an open office hell, prior to this COVID thing? How great of a bargaining position did the software-engineer shortage give you in that conversation?
    - shuckles 6y ago
      Plausible. Do you know if healthcare, higher ed, and housing are industries where cost trends are convincingly explained by neoliberalism, i.e. some combination of deregulation and promotion of free trade and free markets? Or are you saying that the problem of affordability in these sectors can and should be entirely resolved by higher wages?
      - dillonmckay 6y ago
        Well, all three are heavily subsidized by the government, so I would argue it is the opposite of the promotion of a free market and deregulation.
      - vkou 6y ago
        I wouldn't blame education costs or housing costs on neoliberalism, I'd blame them on availability of low interest, little down credit for housing and student loans. Which, while being a bit of a neo-liberal policy is not a cornerstone of neo-liberalism (nor is even controversial among the left, much to my chagrin). Medical care is, of course, it's own awful mess. Higher wages wouldn't fully solve either problem on a society-wide level. If you chang nothing else, I'd expect that costs of all three would rise until they soak up every spare penny of the middle class.
- nl 6y ago
  It's absolutely "pant's on fire" level of misleading to label a fairly reasonable attempt at root cause analysis as a goal by anyone. I can say "the rise in house prices before 2008 appears to be mainly the consequence of permissive loan policies by banks" without meaning that I think either high or low house prices or permissive or non-permissive loan policies are good or bad.
entropea 6y ago
>Chomsky’s take on the substance of what Greenspan said seems reasonably on target. Read the entire thing. It's not quite "pants on fire", its just not an exact quote. OP posting "explicitly" is incorrect since it's from Chomsky, however.
- shuckles 6y ago
  Chomsky and the original poster imparted a connotation which is simply not present in the original text.
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