More on Structural Unemployment

Well, all the good folks are lining up against my argument that the current unemployment rate is likely to be structural, advocating more measures to expand demand through government actions (mainly fiscal). Let me reiterate my thought that absent permanent measures to increase the income of the bottom 80% (and for credentialing let me reveal that I am not a member of these four income quintiles), that no amount of temporary stimulation will work and the fiscal imbalances resulting from deficits that do not add truly productive capacity or prevent the erosion of current productive capacity (well chosen infrastructure and research; education and training that is aimed specifically at worker capacity, not the vague goal of throw-money-at-schools) will simply add to the problem down the line. The demand shortfall is not mainly a matter of the un- and underemployed in the current economy which can be remedied by employing them. It's a matter of the low current income and doubtful prospects of the higher numbers of people who currently do have jobs. Job insecurity would remain.

Further, I still believe that the bulk of value-added that would feed a higher level of demand would still fly overseas, for energy and manufacturing, would be used to build additional productive capacity or secure resources and to purchase through debt a call on any future productive power in this country. Finally, since I'm coming to appreciate money as signal, the conservative critique that temporarily ramping up the wattage sent indiscriminately down the wire risks distorts the economy that rises to meet it.

And the ironic point is that this doesn't even reflect what would be the true structural issue if people weren't thick as bricks: most of their money (like most of their lives) is pissed away on the hedonic treadmill. What if folks realized that even for ever-expandable leisure demand, that a $2.00 deck of cards and three good friends would give them as much pleasure as half their net discretionary expenditures. (Smaller houses, less and lower-food-chain meals, efficient cars, a limited but well-chosen wardrobe, and just less impulse-purchased crap would also). Now that would produce some serious structural unemployment.