Comments on: High Poverty Rates and Market Failure

By: PeonInChief

PeonInChief — Tue, 24 Jul 2012 16:07:09 +0000

I thought that Barbara Ehrenreich had trashed the “they’re poor because they don’t get married” during the Reagan Administration. No, they don’t get married because they’re poor. And there’s no reason to get married if you don’t share any assets. It costs a lot more money to get divorced than it does to split up.

By: Jared Bernstein

Jared Bernstein — Tue, 24 Jul 2012 12:37:19 +0000

Actually, I mean the Great Recession was a massive market failure by any definition.

By: jonathan

jonathan — Tue, 24 Jul 2012 03:32:01 +0000

You need to get past the label “market failure”. You mean the market generates a socially undesirable result. An actual “market failure” is a time period specific failure to clear, as in a sudden drop in stock price(s) because there are no buyers at any price for that short period. Over a longer period, which might be the next hour or next day(s), the market clears.

You are describing a social result which the “market”, meaning the “free market” or some variety of that, has not improved sufficiently to meet your criteria. To make my point, imagine you are an oligarch in a relatively closed social economy. (Could pick many countries that fit.) From your perspective, the market generates an appropriate level of poverty, a level that allows your control to continue at the relative level of wealth you have. Take it further: say you are a warlord in a country with a subsistence economy and, obviously, weak government. As long as you have your power, you don’t care what happens to others. Even if you’re relatively poor compared to people of equivalent power in other countries, you are pretty happy with the poverty.

When you use the phrase “market failure”, you buy into the wrong concept that markets can address the problems we want them to address. Markets don’t care what we want. We can’t point them at something and say “solve this.” Health care is an even better example: the market’s solution is vast numbers of uninsured, very high costs, etc. We mentally fall down when we expect more.

By: urban legend

urban legend — Tue, 24 Jul 2012 02:36:16 +0000

When the jobs were there in 2000, those “irresponsible” people went and took jobs, bringing the unemployment rate as low as 3.7%. That is absolute refutation of the disgusting Murray-Mulligan line of cultural attack on the poor. When people have income, the social maladies plunge.

I’m sorry, I’m sure they love their families and their dogs, but their arguments willfully ignoring the evidence right under their noses, are simply disgusting. Nothing is lower than Mulligan’s laughable “Great Vacation” theory. Funny how several million people who had been getting their butts out of bed and going to work working suddenly got lazy over the course of a few months.

By: Rima Regas

Rima Regas — Mon, 23 Jul 2012 21:24:51 +0000

Oh, and this Think Progress piece just popped up about Caterpillar pay freezes.

http://thinkprogress.org/economy/2012/07/23/567201/caterpillar-pay-freeze/?mobile=wp

By: Rima Regas

Rima Regas — Mon, 23 Jul 2012 21:18:03 +0000

Aside from cutting hours, doing away with overtime, employers have also done the following two things:

1. Laid off and then rehired as consultants (1099 – no taxes or benefits)
2. Laid off and hired new people at significantly less pay
3. Considerably shrunk departments and increased the workload of existing workers.

My husband was offered option 1 and refused. It took three years for him to find a job with similar pay & benefits as 2007.

He’s lucky. Some of my friends who were in their mid-to-late forties or older are still looking. Degree of expertise and accomplishment don’t seem to matter.

It’s very cold out there.

By: jarrod myrick

jarrod myrick — Mon, 23 Jul 2012 20:24:15 +0000

we ought to be paying people *not to work* #climatechange