Wednesday, August 24, 2011

Econ Not So Simple – Jobs

The Glens Falls Chronicle reports that Red Fox, the only independent bookstore will close.  Barnes and Noble is 24 miles away in Saratoga Springs.  The Borders there just shut down.  It is truly sad that a bookstore can’t make it in Saratoga or Glens Falls.  The owners say that the reason is the growth of e-books.  It is that and websites like,, and even  The editor of the newspaper comments that the big super book stores drove out the independents, and now Borders is gone, so even Saratoga Springs has no downtown bookstore.

I confess that I contribute to the decline of small shops in our towns.  I do as much shopping as I can online because it saves time and money.  I shop a lot on ebay and buy a lot of small items directly from China because the government there subsidizes postage so that I pay $3.00 for something that costs $20 at Staples or WalMart.  Also, there is a huge used goods market in the US now.  Most of my clothing comes from resale shops.  I shop Craigslist and garage and yard sales, too.

Garage and yard sales fall into several categories: On the low end what you see is landfill.  On the high end at the McMansions, there are often 3 car garages, stuffed with expensive toys and household items that were bought when the economy was roaring.  These people often price stuff at 80% of the new price, so they truly know the value of nothing.

My shopping behavior partly causes “structural unemployment.”  The jobs that are lost are as the British say, “redundant.”  They are no longer needed and there is no way to bring them back.  It is difficult to fathom that Michigan lost half a million jobs in the past few years.  A report in the Albany Times-Union says that fewer and fewer retail workers are employed in the region.  So are a vast number of workers simply not needed, in fact redundant?

I search for economists who can explain what I have been seeing the past few years.  One I found is Dean Baker, who explains simply where all the money and jobs went.  (The housing bubble was $8 trillion of phony wealth and equity!)  Baker has some interesting recommendations.
Reshape the Economy: Shorter Weeks, Longer Vacations   Rogoff doesn't seem to have any proposals except higher inflation, and Robert J. Samulson must work for the Koch brothers.

But it is not the case that workers have been laid off from jobs that still exist or that will return.  The jobs are gone.  Computerization, the applications of new technologies, the movement of jobs to countries with cheaper labor have done this.  It has taken 30 years of the application of personal computers and the development of the internet to make this happen so strongly today.  We may have a society now that requires only 30-40% of its people to be employed.

When I was downsized in 1996 (from the PCUSA) it was the result of “re-engineering.”  Declining membership and funds meant a need for fewer staff personnel.  At that time there was a slew of books on everyone becoming an entrepreneur.  Much easier said than done, and few people can make a living income on consulting or Ebay selling.  (I do that, too.)

I remember Nixon promoting a “guaranteed annual income” in 1970.  Daniel Patrick Moynihan (dem. Senator NY) wrote a book on why it failed and why it was needed.  It was a failure of political will of various groups to “compromise.”  Sounds familiar.  Both Nixon and Moynihan saw that there would be time when there would be not enough jobs for everyone.  So how would people live?  Everyone needs a share of the U.S. for basic living.  If one has motivation to move beyond what would be poverty, go for it.  Oddly, this was a plan spelled out by my friend, George, in high school around 1960.

Turns out it is an old idea, and I can imagine a society where more justice reigns than now and everyone shares in the world’s wealth.  You know, like from each according to his ability; to each according to his need.  I look forward to reading Terry Eagleton’s book.  Wasn’t Nixon a conservative Republican?

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