This chart* recently appeared in the New York Times blog, Economix. The writer, Casey Mulligan, is a professor of economics at the University of Chicago. He thinks that progressive policies advocated by the likes of Paul Krugman will lead to lower employment in the US, and he uses the chart to support that argument. If we follow European policies, we will get European employment results.
Economists, like politicians and the rest of us, are fixated on employment. We expend an amazing amount of effort trying to figure out how to put people to work at a job, any job, no matter how poorly it pays, or whether it is dangerous to the worker or to the environment or society. West Virginia miners blowing the tops off mountains and into streams, Republican operatives creating poisonous political ads, TV jerks crying about socialism while selling gold as a plausible investment for people with minimal savings? Whatever. At least they’re working.
When Mulligan looks at that chart, he sees all those people who aren’t working as a dead weight on society, reducing economic activity and efficiency. When Arpit Gupta, writing for the website E21** looks at that chart, he sees the dangers of government action:
The cumulative impacts of Obamacare, repeal of the Bush tax cuts, and the new (future) taxes required to pay for the current deficits will have large economic consequences. Put simply, if we want higher levels of government spending, we will need higher levels of taxes, and accept lower economic growth.
This is the standard chant from the economists who got it wrong and didn’t learn from their failure: we can’t have taxes, they hurt the economy by reducing the amount of money available for investment. There is no evidence that there is a shortage of capital. Quite the contrary. The rich are sitting on trillions of dollars: $1.9 trillion in hedge funds, $1.8 trillion idling in corporations, $.5 trillion in private equity funds, and who knows how much squirreled away in secret bank accounts. There’s plenty of money. The rich refuse to invest in businesses that will provide jobs, at least in this country.
In the US, this is a real problem, because if you don’t work, you will suffer. The corporatist party is trying to gut Social Security and Medicaid, the only remaining safety nets. They want people working and feeding health insurance companies and finance companies. Electing Democrats hasn’t stemmed that tide, and electing Republicans will speed up the destruction of both the safety net and the economy. Mulligan sadly admits
Our future is likely to have a permanently larger role for government, and that means employment rates may never be as high as they once were. We might enjoy some of the European lifestyle, or recover the jobs lost during this recession, but not both.
I vote for European lifestyle. When I see those employment figures, I see deliberate policy choices about people’s lives. I see people sitting in sidewalk cafés drinking coffee and reading newspapers. I see mothers walking their three-year old kids to playgrounds in impeccably landscaped parks. I see people who are not afraid of unemployment, because they know they can be treated if they get sick, and will not starve to death if they can’t save vast amounts of money for retirement.
Let’s face it. There is nothing inherently good about working. It doesn’t make you a better person, and it may make you worse: you are too tired to be a decent parent, or you have no time, or are too tired, to socialize or join a choir or garden. Work doesn’t make you smarter or kinder or more fun.
Let me make this personal. I was a bankruptcy lawyer for years, and I felt good about helping others through financial problems. Then it dawned on me that I was feeling good for solving problems that shouldn’t have been problems. A family is driven into Chapter 7 because they didn’t have health insurance. I helped. but so what? A family is forced into bankruptcy by cheating banksters with their creepy documents and their enforcers in the judiciary. I helped, but so what? And look at all the things I couldn’t help, like people cheated by banksters but cut off from legal remedies by the mendacious statutory construction of the Supreme Court. Did any of that make me a better person?
Mulligan and Gupit and the rest of us need to think about the place of work in our lives. We only get one life. We shouldn’t have to spend it playing the part of a productive unit in an economically efficient machine.
* The figures in the chart come from the Bureau of Labor Statistics series called the International Labor Comparisons, probably Table 2-10. It compares the ration of the total employment in the US and six European countries as a percentage of the total potential work force. The countries are France, Germany, Italy, Netherlands, Sweden and the United Kingdom. The statistics are adjusted to make them comparable to US data.
**This article is linked by Mulligan. E21 describes itself as non-partisan: “We aim to advance free enterprise, fiscal discipline, economic growth, and the rule of law.” Non-partisan in this context means corporatist.