so Wall Street still gets respect from this economist, even though it's wrong so often?
> Uchitelle's diagnosis that mass layoffs are a serious national problem is
> convincing. But for this card-carrying economist, his desired prescription
> is not. I see no examples anywhere in the world of economies that have taken
> steps in the direction he desires without severe side-effects. In Western
> Europe, unions bargained fiercely for job security, and governments enacted
> "no firing without cause" laws, giving workers individually and collectively
> quasi property rights in their jobs. Yet this did not lead to a happy labor
> market. Instead, high overall unemployment, extra-high long-term
> unemployment and extra-extra-high youth unemployment appear to be the
> consequences of attempts to ensure that managers and workers are in the same
> boat. Companies that know they cannot lay off groups of workers if demand
> goes sour are very likely to be companies that hesitate to hire workers when
> demand is strong.
this theory -- and that's what it is -- has be debunked several times. It's high European interest rates (ignored by Brad) that are the problem.
WS:
>Actually, Brad's argument seems to make sense. Why would a
for-profit firm be forced by law to perform a fundamentally
governmental or charitable function (i.e producing public goods)?<
why not? after all, for-profit firms are compelled to pay taxes, obey safety and anti-pollution laws, etc. In Uchitelle's view, lay-offs actually hurt those that lay off, but they are compelled by market forces to do it for short-term advantage. An anti-layoff law (or tax) would push firms to reconcile their short- and longer-term interests.
>A better solution is to have a public works program in which the
state (or its instrumentality) would provide employment and necessary
training to all unemployed people. Call it "labor Keynesianism" if
you will. The added benefit of that solution is keeping the private
sector wages high without the recourse to the minimum wage laws.<
that's a good idea, but (say) a tax on lay-offs would be easier to implement.
-- Jim Devine / "There can be no real individual freedom in the presence of economic insecurity." -- Chester Bowles