[lbo-talk] A comment on Paul Krugman's article "'Structural unemployment is a fake Problem" in NYTimes

Wojtek S wsoko52 at gmail.com
Tue Sep 28 04:43:32 PDT 2010


Re: "So the problem is indeed structural. But the structural impediment is political, not economic. Our big industrial states provide the vast bulk of jobs and could employ the jobless easily with proper stimulus. But our Constitution has them roped and hog-tied. No other democracy---not Australia, Canada, England, France, Germany, Japan, India, New Zealand, South Korea or even Russia---has such a structural impediment to rational policy."

[WS:] An excellent point, indeed. But I do not think that the problem is limited to the Constitution. The Constitution is but a piece of paper if there is no political will to enforce it. An I find it difficult to believe that 89% of the population producing 90% of GDP could not find a way of shedding 18th century constraints on it productive potential. That is, if that 89 % were unanimous.

This brings us to the point that I've been trying to argue for some time - that is is the nature of party politics in the U, not the minority rule, that derails any rational policy. Or rather rational policy for the nation as a whole, rather than rational for the preservation of narrow partisan interests. It is not just Repugs who do it, but Dems as well, because given the nature of between-party competition, that is the only rational thing to do (EE Schattnschneider argues that quite eloquently in his book "The Semisovereign People: A Realist's View of Democracy in America" ).

In other words, it is not the Constitution or the 21 or so "piss-ant states" producing 10% of the GDP that is the problem, but rather modern political party politics that uses the rights given to those 21 piss-ant states some 200 years ago to pursue their partisan interests at the expense of the nation as a whole. Obviously, it is not just the political party apparatus, but their industrial backers as well. But those industrial backers are located in "blue" states - they merely use the 21 piss-ant states as a tool in the pursuit of their narrow special interests.

Wojtek

2010/9/27 Mark Wain <wtkh at comcast.net>:
> Structure of Excuses
>
> By PAUL KRUGMAN
> “Structural” unemployment is a fake problem, which mainly serves as an
> excuse for not pursuing real solutions.
> http://community.nytimes.com/comments/www.nytimes.com/2010/09/27/opinion/27krugman.html?sort=oldest&offset=3
>
> A Comment by 52. Old Curmudgeon Akron, OH September 27th, 2010 11:06 am
>
> If Dr. Krugman is beginning to sound shrill about this oft-repeated point,
> he has reasons. First, he's right about the substance; demand is the
> problem. All of a sudden, a nation whose government and consumers lived on
> credit cards for thirty years wants to shed debt. So no one wants to buy.
> That's why there's a huge job deficit. And a big-enough stimulus could do
> double duty by repairing and improving our dilapidated infrastructure. It
> might even help start new industries.
>
> But the second reason why Dr. Krugman sounds shrill has nothing to do with
> economics. So it's nothing an economist (even a Nobel Prize winner) can
> cure. That's the "political will" part.
>
> If it were up to the so-called "blue" states, which produce the vast
> majority of the nation's GDP, we would have more stimulus in a heartbeat.
> But the "red" states have "equal suffrage" in the Senate (to use our
> Constitution's term), despite the fact that nearly all of them (except for
> Texas and Florida) have minuscule populations and make minuscule
> contributions to GDP. Our twenty-one smallest states can mount a filibuster,
> despite the fact that, all together, they account for less than 11% of our
> people and about 10.2% of GDP.
>
> Furthermore, there is nothing anyone can do about it. Our Constitution
> (Article V) provides that "no State, without its Consent, shall be deprived
> of its equal Suffrage in the Senate." In other words, it is designed to let
> the few govern the many and the (economically) weak govern the strong. And
> it precludes anyone from changing this dismal arrangement, even by
> constitutional amendment, unless the small states concur.
>
> When you add the fact that the GOP now uses the mere threat of a filibuster
> as a means to stop every Democratic initiative dead in its tracks, you begin
> to sense the source of Dr. Krugman's frustration.
>
> So the problem is indeed structural. But the structural impediment is
> political, not economic. Our big industrial states provide the vast bulk of
> jobs and could employ the jobless easily with proper stimulus. But our
> Constitution has them roped and hog-tied. No other democracy---not
> Australia, Canada, England, France, Germany, Japan, India, New Zealand,
> South Korea or even Russia---has such a structural impediment to rational
> policy.
>
> Aside from a miraculous epiphany on the part of voters and senators from
> places like South Carolina, there are no short-term solutions save massive
> economic pressure, secession or another civil war. In the long run,
> immigration into, development of, and demographic changes in the obstructive
> states might do the trick. But as the great economist John Maynard Keynes
> once said, in the long run we are all dead.
>
> Welcome to the Banana Republic of America.
>
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>



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