8 comments in reply to "Take a Whack at the Slack, Jack!"

  1. Robert Salzberg says:

    Berstein:

    “Third, Congress, functional or not, needs to know the level of slack to calibrate temporary policy measures, like extended unemployment insurance benefits or a job-creating infrastructure program — to offset the slack until the private market is once again firing on all cylinders.”

    I’m only quibbling about this characterization of “job-creating infrastructure program -to offset the slack”.

    The American Society of Civil Engineers estimates that we need $3.6 trillion in additional infrastructure spending. With a $3.6 trillion backlog of jobs to do, we don’t need a job-creating program, we just need funding for the jobs we already have.

    Of course, if there is still slack in the construction industry after Congress fully funds the infrastructure deficit, national high speed rail would be great for a “job-creating infrastructure program”.

    The IMF just put out a blog post outlining how countries like the U.S. can decrease the national deficit to GDP ratio by deficit funded infrastructure projects.

    Does deficit reducing infrastructure spending sound better than “job creating” as a way of exposing the GOP myth that we can’t afford decent infrastructure in America?

    http://blog-imfdirect.imf.org/2014/09/30/now-is-a-good-time-to-invest-in-infrastructure/


    • Robert Salzberg says:

      Clarification:

      Purposeful ‘starve the beast’ underfunding of infrastructure has created around a 1% reduction in GDP annually for decades. So saying we just need more infrastructure spending to: “offset the slack until the private market is once again firing on all cylinders.”, obscures the points that starving infrastructure creates slack and that good infrastructure is a prerequisite for getting the private market “firing on all cylinders”.


      • urban legend says:

        I have tried to advance this point for some time — that “starve the beast” in the form of (1) all taxes are terrible per Proposition 13, and (2) “government is the problem,” has left a huge employment hole for more than a generation that should have been filled by simply keeping our infrastructure up-to-date and working. We saw this especially in the so-called “jobless” GW Bush recovery, when there was a gap at its highest point compared to the high point in 2000 of about three million jobs, with an extra million of those jobs (compared to 2000) being involuntary part-time jobs — and that, no less, was with artificial help of the phony wealth effect from the real estate bubble.

        The endemic nature of less-than-full employment in a real sense became obvious in the aughts, and was part of the weakness that made the collapse all that more devastating and hard to correct.

        Meanwhile, most other countries in the world develop advanced transportation systems and put millions to work doing it.


    • Robert Salzberg says:

      How about job and people killing Republican obstruction of fixing our infrastructure?

      Our infrastructure deficit kills people on a daily basis via exploding gas lines, increased car accidents, collapsing bridges, blackouts, etc.

      Under funding infrastructure meets the definition of criminal negligence. How about criminally negligent Republican obstruction?

      http://legal-dictionary.thefreedictionary.com/Criminally+negligent


  2. Larry Conley says:

    Excellent suggestion!


  3. Beth in OR says:

    “…Does deficit reducing infrastructure spending sound better than “job creating” …?”. Give it a spin and let’s see. At minimum it’s a good placeholder for future reports of factual deficit reduction success. It isn’t as though there are intentional jobs being created after all, so maybe this phraseology will get their attention.


  4. urban legend says:

    I still find it strains credulity to say that two-thirds of the reduction in the labor force is due to retirements and other non-cyclical reasons when the employment-to-population ratio of prime working age adults (25-54), for whom I believe nobody has posited a theory on how they would have been subject to an increase in genuinely voluntary retirements since 2008, has recovered only one-third of the losses from the Great Recession. Those data are not consistent with each other.

    Really, shouldn’t the still extremely high U-6 be the absolute end of story on slack? I find it very hard to consider suggestions that the 6.1% is nearing “full employment” are ones actually being made in good faith. That may be harsh, but it seems to me completely justified no matter who is saying it.


  5. Larry Signor says:

    UL, You make a very good point. Labor force participation for the 25-54 yr. old cohort is down over 3% from the 2006 peak. The no-slackers do not have a cogent argument. Even the eldest portion of the cohort would not be eligible for SS retirement benefits today.

    http://data.bls.gov/timeseries/LNS12300060


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