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I think one bizarreness needs to be pointed out, lest it seems too strange for some people who are used to a slightly more rational universe — all this talk of

I think one bizarreness needs to be pointed out, lest it seems too strange for some people who are used to a slightly more rational universe — all this talk of "job creation" is a lunatic side-effect of our economic system. One might think that millions of homeless and unemployed people represent a huge untapped demand for goods and services; they're humans like any other. But of course, our system doesn't work that way. The notion of systematic unemployment is bizarre. (No matter what justifications were invented to paper over its absurdity with.) It represents idle hands which have nothing to do. The US could have enormous productive output. The infrastructure and know-how is there; it's not like someone dropped bombs all over the place and reduced it to a 3rd world nation. But as a society, we choose not to use these resources, nor do we allocate much of our output to the "lower classes" of people.

yummyfajitas 15y ago
The notion of systematic unemployment is bizarre. (No matter what justifications were invented to paper over its absurdity with.) It represents idle hands which have nothing to do...But as a society, we choose not to use these resources... "As a society", we choose nothing. If you believe their output is useful, why don't you hire some of them? Structural theories of unemployment are merely theories which claim that you have no idea what job they can profitably perform, and they have no idea what jobs to bother applying to. Or, alternately, there are barriers preventing them from taking such a match (e.g., some people may consider unemployment benefits + leisure superior to a marginally higher paying job).
- bjelkeman-again 15y ago
  As swombat says [a] “straightforward way that politicians can create jobs: by spending money on big infrastructure projects.” That is indeed a way that the society you live in choose to spend money to create jobs. Other ways of spending money to create jobs are, for example to increase the size of the military, which may or may not be as useful for a nations economy as creating infrastructure, depending on the state of your infrastructure and the size of your military.
  - yummyfajitas 15y ago
    Big infrastructure project don't work in this day and age. The recession would be long over before the environmental impact reports are even submitted, and you'd need to repeal Davis-Bacon to make things affordable. But some variant of the New Deal approach would be possible. For instance, instead of paying people not to work for 99 weeks (as we currently do), we could pay people wages equal to unemployment benefits for jobs that would otherwise be done by a unionized government employee. For instance, unemployed skilled workers could become DMV clerks and unemployed unskilled workers could become DMV janitors. Such an approach would allow us to both create jobs and cut spending. Strangely, we don't go down that route. It's almost as if our elected officials and unelected bureaucrats aren't looking out for our best interests.
    - exit 15y ago
      what would the ex unionized government employees do then?
      - skylan_q 15y ago
        Get jobs that actually help the economy. The government can't add jobs to help the economy by definition, because they don't work in the realm of profit/loss. This is called the economic calculation problem. We've ignored this problem, and that's why we keep creating jobs from stimulus while losing twice as many as created.
        rwl 15y ago
        Huh? Aren't government employees paid in the same currency as employees in the private sector? Don't those employees spend that currency largely in the private sector? If those people wouldn't otherwise be employed, how are their jobs not "helping the economy"?
        mhb 15y ago
        You are propounding the Broken Window Fallacy. To discover the flaw in your reasoning see: http://bastiat.org/en/twisatwins.html http://bastiat.org/en/twisatwins.html
- skylan_q 15y ago
  "Structural theories of unemployment are merely theories which claim that you have no idea what job they can profitably perform" It's not that they have no idea which jobs they could profitable perform, but that there are no jobs which they could profitably perform. This is because their marginal rate of productivity is too low for any position. The way around this is to reduce income taxes, corporate taxes and sales taxes. This reduces the cost for employment and production, which brings the "you need to be this productive to be profitable for us" bar lower. This helps to make more room for on-the-job training as well. The mismatch between skills and demand for skills is real. This is mostly a result of government intervention and the business cycle causing unsustainable booms in industries.

yummyfajitas 15y ago

The notion of systematic unemployment is bizarre. (No matter what justifications were invented to paper over its absurdity with.) It represents idle hands which have nothing to do...But as a society, we choose not to use these resources... "As a society", we choose nothing. If you believe their output is useful, why don't you hire some of them? Structural theories of unemployment are merely theories which claim that you have no idea what job they can profitably perform, and they have no idea what jobs to bother applying to. Or, alternately, there are barriers preventing them from taking such a match (e.g., some people may consider unemployment benefits + leisure superior to a marginally higher paying job).

bjelkeman-again 15y ago
As swombat says [a] “straightforward way that politicians can create jobs: by spending money on big infrastructure projects.” That is indeed a way that the society you live in choose to spend money to create jobs. Other ways of spending money to create jobs are, for example to increase the size of the military, which may or may not be as useful for a nations economy as creating infrastructure, depending on the state of your infrastructure and the size of your military.
- yummyfajitas 15y ago
  Big infrastructure project don't work in this day and age. The recession would be long over before the environmental impact reports are even submitted, and you'd need to repeal Davis-Bacon to make things affordable. But some variant of the New Deal approach would be possible. For instance, instead of paying people not to work for 99 weeks (as we currently do), we could pay people wages equal to unemployment benefits for jobs that would otherwise be done by a unionized government employee. For instance, unemployed skilled workers could become DMV clerks and unemployed unskilled workers could become DMV janitors. Such an approach would allow us to both create jobs and cut spending. Strangely, we don't go down that route. It's almost as if our elected officials and unelected bureaucrats aren't looking out for our best interests.
  - exit 15y ago
    what would the ex unionized government employees do then?
    - skylan_q 15y ago
      Get jobs that actually help the economy. The government can't add jobs to help the economy by definition, because they don't work in the realm of profit/loss. This is called the economic calculation problem. We've ignored this problem, and that's why we keep creating jobs from stimulus while losing twice as many as created.
      - rwl 15y ago
        Huh? Aren't government employees paid in the same currency as employees in the private sector? Don't those employees spend that currency largely in the private sector? If those people wouldn't otherwise be employed, how are their jobs not "helping the economy"?
        mhb 15y ago
        You are propounding the Broken Window Fallacy. To discover the flaw in your reasoning see: http://bastiat.org/en/twisatwins.html http://bastiat.org/en/twisatwins.html
skylan_q 15y ago
"Structural theories of unemployment are merely theories which claim that you have no idea what job they can profitably perform" It's not that they have no idea which jobs they could profitable perform, but that there are no jobs which they could profitably perform. This is because their marginal rate of productivity is too low for any position. The way around this is to reduce income taxes, corporate taxes and sales taxes. This reduces the cost for employment and production, which brings the "you need to be this productive to be profitable for us" bar lower. This helps to make more room for on-the-job training as well. The mismatch between skills and demand for skills is real. This is mostly a result of government intervention and the business cycle causing unsustainable booms in industries.