How to Crush Unemployment Like a Boss

[ksen]

http://www.theatlantic.com/business/archive/2014/11/how-to-crush-unemployment-like-a-boss/382344/

It’s rare that a state with below-average unemployment manages to outperform states that have so much ground to makeup. But in three states that's the case: Idaho, Colorado, and Utah had average unemployment rates at around 8.5 percent in 2010—one percentage point lower than the U.S. average. In the years since, all three have nevertheless seen drastic drops in their unemployment rate, managing to whittle them down by an average of 4.3 percent, while unemployment for the U.S. as a whole has decreased by only 3.6 percent.

So why have these states had so much success when it comes to improving their unemployment rates while others have struggled to make significant change? What can other states learn from their examples?

The answers are—of course—varied, but there are a couple of patterns worth noting.

While cuts to state and local governments were rampant around the country, Colorado, Idaho, and Utah all took the opposite approach, maintaining or growing their public sectors during and after the recession . . .

Many states, including Michigan, Louisiana, Rhode Island, and Connecticut, made a different choice, slashing their public-sector budgets by more than 5 percent over the past seven years. The results haven’t been as promising. All currently have unemployment rates that remain higher than the national average.

It shouldn't be controversial that during down times government needs to step in to replace lost spending from the private sector in order to help buoy the economy until private spending starts to pick back up.

 

[dismal]

It shouldn't be controversial that during down times government needs to step in to replace lost spending from the private sector in order to help buoy the economy until private spending starts to pick back up.

Ignoring the fact this was considered to be a failed economic theory for much of the last 40 years, what is it that leads you to believe there is "lost spending"?

 

[Nice Squirrel]

Ignoring the previous poster, this is what Minnesota did and was able to rebound quickly, and cut spending after recovery. We now have a surplus of jobs.

 

[ksen]

It shouldn't be controversial that during down times government needs to step in to replace lost spending from the private sector in order to help buoy the economy until private spending starts to pick back up.

Ignoring the fact this was considered to be a failed economic theory for much of the last 40 years, what is it that leads you to believe there is "lost spending"?

considered failed by whom?

 

[dismal]

Ignoring the fact this was considered to be a failed economic theory for much of the last 40 years, what is it that leads you to believe there is "lost spending"?

considered failed by whom?

Economists. AKA the profession that created it.

 

[ksen]

considered failed by whom?

Economists. AKA the profession that created it.

That answer seems kind of vague.

Which economists?

 

[Trausti]

This spending. Where does the money come from?

 

[dismal]

Since you must not have taken economics, try googling "Keynesian revival".

Then ask why that produces any results.

 

[ksen]

Since you must not have taken economics, try googling "Keynesian revival".

Then ask why that produces any results.

Why don't you just tell me who they are?

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This spending. Where does the money come from?

It could come from a couple of places. It could come from issuing more bonds or the Fed could simply print the money into existence.

 

[Jason Harvestdancer]

Government can have the same financial outlays either way and by one method reduce the official unemployment rate and by the other method not do so. One way is to put people on relief, the other way is to hire them for the same amount. Which is better for the economy?

One of those ways makes the official numbers look lower. Make-work jobs that reduce apparent unemployment make great statistics that enable people to say their theory is validated. Is any new good or service produced by doing so?

 

[laughing dog]

Economists. AKA the profession that created it.

That answer seems kind of vague.

Which economists?

The answer is vague because "the economists" did no such thing. There is an ongoing debate among economists which has not been settled nor is it likely to be any time soon. So "some economists" view it as a "failed" theory while "some other economists" do not. Any intellectually honest person who actually has been paying attention or studied economics recently would be able to tell you this.

 

[laughing dog]

Government can have the same financial outlays either way and by one method reduce the official unemployment rate and by the other method not do so. One way is to put people on relief, the other way is to hire them for the same amount. Which is better for the economy?

One of those ways makes the official numbers look lower. Make-work jobs that reduce apparent unemployment make great statistics that enable people to say their theory is validated. Is any new good or service produced by doing so?

Unless the "make work" literally involves doing nothing, then obviously the answer is yes. Of course, you have not presented any reason or evidence to indicate that Utah, Idaho or Colorado engaged in the creation/expansion of "make work" jobs.

 

[Jason Harvestdancer]

Whereas I am pointing out potential flaws in the OP's argument, it is on the OP to demonstrate that these jobs are not make-work but are instead value-added.

 

[ZiprHead]

Is there really somebody out there that can look out their fucking front door virtually anywhere in the US and not see real work that needs to be done?

 

[Nice Squirrel]

Whereas I am pointing out potential flaws in the OP's argument, it is on the OP to demonstrate that these jobs are not make-work but are instead value-added.

In Minnesota, we did not add jobs to the public sector nor did we cut them. We increased spending on public projects that kept jobs going in the private sector while training the unemployed for future jobs. We also helped feed our citizens that were hungry. I don't know where you guys are getting that these states directly hired more workers. (Seen to many Depression Era movies?) That's not the way to stimulate the economy.

 

[Valjean]

Ignoring the fact this was considered to be a failed economic theory for much of the last 40 years, what is it that leads you to believe there is "lost spending"?

considered failed by whom?

Presumably by von Mises, Hayek, Friedman and the Chicago School, and by Reagan and his application of Supply Side and Laissez-faire policies that have brought us so many jobs a such prosperity in the past few decades.

Keynesianism didn't fail. It was suppressed by the monied interests. We might try it again.

 

[laughing dog]

Whereas I am pointing out potential flaws in the OP's argument, it is on the OP to demonstrate that these jobs are not make-work but are instead value-added.

So, you think that Utah, Idaho and Colorado simply created/expanded make-work (i.e. doing literally nothing) jobs? Before anyone takes your argument even remotely seriously, you need to give realistic examples of what you consider "make work". Because as Ziprhead implies, the empirical basis for your argument appears non-existent.

 

[Jason Harvestdancer]

Whereas I am pointing out potential flaws in the OP's argument, it is on the OP to demonstrate that these jobs are not make-work but are instead value-added.

So, you think that Utah, Idaho and Colorado simply created/expanded make-work (i.e. doing literally nothing) jobs?

I think it is a definite possibility, which is why the OP needs to give us more detail to support his argument.

Attempt to shift the burden of proof snipped.

 

[laughing dog]

So, you think that Utah, Idaho and Colorado simply created/expanded make-work (i.e. doing literally nothing) jobs?

I think it is a definite possibility, which is why the OP needs to give us more detail to support his argument.

Attempt to shift the burden of proof snipped.

No, you need to demonstrate what you mean by "make work" jobs, because there is no reason to take your view about a "definite possibility" seriously.

 

[paladin.oa]

Even if those jobs are "make work" what does it matter? You have people able to feed, clothe, and shelter themselves and their families, what's so bad about that?

Plus they actually are able to spend money which then goes into the economy. So again, why is that so bad?