Robert Reich: It’s a Depression
Robert Reich points out that, if we make up a new way of counting unemployment, we’ve got a lot of unemployment:
The March employment numbers, out this morning, are bleak: 8.5 percent of Americans officially unemployed, 663,000 more jobs lost. But if you include people who are out of work and have given up trying to find a job, the real unemployment rate is 9 percent. And if you include people working part time who’d rather be working full time, it’s now up to 15.6 percent. One in every six workers in America is now either unemployed or underemployed.
And, if we count people working full time who’d rather get paid a lot more money, put in fewer hours, and do things that are more fun, it’s now up to 99.9 percent. Virtually one in every one workers in America is now either unemployed or underemployed!
QED:
This is still not the Great Depression of the 1930s, but it is a Depression. And the only way out is government spending on a very large scale. We should stop worrying about Wall Street. Worry about American workers. Use money to build up Main Street, and the future capacities of our workforce.
Despite skepticism with how he got there, I’m actually inclined to agree. Bailing out bad companies is a stupid idea. Lending a helping hand to people down on their luck, on the other hand, is something I can get behind.
Naturally, however, Reich loses me on implementation:
Energy independence and a non-carbon economy should be the equivalent of a war mobilization.
So, we should declare war on fossil fuels? Will that go as well as the wars on drugs, crime, and poverty?
Hire Americans to weatherize and insulate homes across the land.
We’re going to have a WPA for caulking windows and blowing in insulation?! Really?! Not only would these people presumably be competing with people who currently do that sort of thing for a living but it would surely count as underemployment for the vast number of the recently unemployed. Wouldn’t we rather, I dunno, get jobs that require some level of skill?
Don’t encourage General Motors or any other auto company to shrink. Use the auto makers’ spare capacity to make busses, new wind turbines, and electric cars (why let the Chinese best us on this?). Enlarge public transit systems.
So, we’re going to spend vast sums of money taking a giant leap back in personal freedom and convenience? The automobile was a wonderful invention that made our lives radically better. We’re going to give that up for buses and other forms of public transit? Yee. Hah.
And while we’re at it, we’re going to thumb our noses at the trade regimes we’ve spent sixty years putting in place, subsidizing a pet industry that the Chinese would otherwise dominate in a free market?
Meanwhile, extend our educational infrastructure. So many young people are out of work that they should be using this time to improve their skills and capacities. Expand community colleges. Enlarge Pell Grants. Extend job-training opportunities to the unemployed, so they can learn new skills while they’re collecting unemployment benefits.
Outside Detroit, which was in its death throes before this crisis got underway, education and training isn’t the problem. We’re not less educated than we were eighteen months ago. We’ve got Harvard MBAs out on the streets now. We’re going to, what, send them to learn a trade? Caulking windows, perhaps?
Finally, accelerate universal health care.
It always comes back to that, no? It’s the Democratic Party’s version of cutting taxes. It solves everything, dontcha know?
This wikipedia page has a good summary of the United States Bureau of Labor Statistics measures, U1 through U6.
The fact of the matter is that we have been long making up new ways to count unemployment, and ways of aiding the unemployed. That does make cross-time comparisons difficult.
See the section called “Historical Comparability” in this document:
http://www.bls.gov/cps/eetech_methods.pdf
Universal health care –> more doctor visits
More doctor visits –> more prescriptions for painkillers and mood enhancers
More prescripts for painkillers and mood enhancers –> less pain and suffering
See? It’s all better now. The problems are solved.
And here I thought Team Obama was all done talking down the economy. Apparently the presidential memo to that effect went over Reich’s head.
Thanks for reminding me why I continue to come here. You are giving me some hope for the future of the GOP.
Poor bit. The DJIA over 8000 and other good economic news starting to appear. He must be truly miserable.
Takes a real patriot to actually hope the ecnonomy will collapse, just so he can blame Obama.
I have to agree, that and alternative energy. I don’t understand why they have to be forced into every unrelated initiative.
It would indeed be absurd to “include people who are out of work and have given up trying to find a job” as unemployed.
James, as you seem to quickly dismiss the Democrats ideas of how to exit this “Depression”, what are your suggestions?
I suppose giving the unemployment all their tax money back is too simple and obvious a plan.
OF course, the government knows better then we do how to spend our hard earned income, they’ve had so much practice for so long.
First, Reich is and always has been a man of kind and polite manners.
Second, Reich has always appeared consistent and true to his beliefs.
Third, Reich has always stayed in goose-step with the far left agenda and would say or do what ever is needed to further it, including this effort to spook the herd into the safety of the corral of surrendered liberty.
It is clear that he shares the sentiments of Geithner, who would intentionally prolong the “economic crisis”, and sees it gleefully as an opportunity to further the present government’s Marxist agenda.
Of course Reich wants you to think it’s a depression while working hard to make it so.
When it comes to actual knowledge of economics, Robert Reich comes up short. Reich is professor of politics. He may even know less about economics has does the one himself.
Reich is advancing a radical new economic theory, Obamanomics. Radical new theories require evidence. Reich comes up short in the evidence department.
We know that Adam Smith knew about what he wrote. Can’t say the some about Reich.
The prattle is running deep, and curiously it shows an odd internal contradiction … unemployment is not high after all? and it’s Obama’s fault?
Funny.
Ah James, forgive me for joining the fray this late in the evening. I will pick out, like other correspondents, your closing comment:
I for one doubt that it solves everything, but it will surely help those Americans without any health insurance, or those with inadequate health insurance.
If the conversation picks up steam, I will join tomorrow. Until then, perhaps you, or your correspondents, can help me out with the simplest of all questions:
Somehow it reminds of that old college song “Was a cold winters evening, the guest were all leaving, O’Leary was closing the bar, when he turned to the lady in red, and said: GET OUT, YOU CAN’T STAY WHERE YOU ARE…â€
To my fellow correspondents, I would like to point out that I have nominated Bithead to be our Presidential Protocol Expert at OTB. I present his qualifications in the discussion section of the recent OTB blog on the horror of President Obama bowing to the Saudi King. Once he assumes this post, we no longer need to discuss whether the President, or the First Lady have crossed any lines of International Protocol. Why, because he will tell of us!!!
Such an appointment will need James Joiner’s approval. But I am sure he will approve, for it will free up his time from worrying who Obama is bowing to, and give him extra time to think about other issues, such as (cough, cough) Health Care.
Note: Male Employment at an All-Time Low
And you all were able to work in 2 jokes about Reich’s height, well done!
As I noted in a post below, spending more on healthcare does not translate into more healthcare. To accomplish that we’d need to expand the supply of healthcare and there are no provisions for doing that.
The question I’d ask of Dr. Reich is that, if it’s a Depression, why aren’t the Congressional leaders acting as though it were that serious? If they believed it were that serious, more of the provisions they put in the recent stimulus package would have been for measures that would have greater likelihood of being spent in the near term. odograph, Steve Verdon, and I have mentioned any number of such provisions in the past including increased food stamps, further expansion of unemployment, FICA holidays, etc.
But that’s not what they’re doing. Dr. Reich needs to do more lobbying Congress and less blogging.
A key problem is that government spending measures tend overwhelmingly retrospective in nature rather than forward-looking. They’re trying to preserve the past rather than create jobs for the future.
Dave, do you seriously think we’d be dropping programs in $1,000,000,000,000 chunks if these were not thought to be desperate times?
“”Once he assumes this post, we no longer need to discuss…..Why, because he will tell of us!!!””
“”””””””””””””””””””””””””””””””””””””””””””””””””
Translation…
How could anyone have the “audacity to hope” that “The One” could be held to any tradition or protocol.
Well, perhaps he should be, at least until he can beat Kim Jong-il at a round of golf while following the established protocol of the game, of course!
Because we go see a doctor when we have a common cold, something he can do absolutely nothing about. We then insist on getting a prescription for an anti-biotic that will do absolutely nothing to help us.
We want pills to lift us up, pills to bring us down, pills to avoid the symptoms of growing old, pills to avoid the symptoms of being young, pills for everything and nothing, just so long as we’re getting something.
In short, we pay twice as much not just because we can, but because we demand it.
I believe that most Congressmen don’t know the difference between a billion and a trillion.
I think that they see an opportunity and they’re seizing it.
Well, to be absolutely honest, I see some self-sealing in arguments like that.
It’s not serious, so anything they do is fake … it’s basically the Bithead Circular Argument (TM)
Why was it important for James to belittle that data? His comment:
There is an obvious need here to reject uncomfortable facts.
odograph, I remain in favor of effective action in the face of a serious recession. IMO that requires Congress to start doing what’s likely to work rather than what they’re comfortable with or will curry favor with core constituencies. I don’t see how that constitutes denial on my part but rather denial on Congress’s part.
I wasn’t aware of him having any.
Dave Schuler, re com (April 5, 2009 | 08:27 am) this makes no sense:
There is no post below, so I do not know exactly what you are talking about. What we do know is this:
So as not to tax the readership, numbers 6 through 15 are deferred to a future communications. Now then, it does not take a high school valedictorian to tell you that within the five points I have listed there is a saving of health care dollars if reform is instituted. Why does the Center Right always raise the specter of increased cost to establish an equitable system, when the reality may be significant cost saving?
Pssst #1: That there is maldistribution of health care resources is beyond argument. That there is a shortage of health care workers, that my good man, deserves a separate post.
Pssst #2: there is the OP tumescence index, which goes a long way to nail down (cough, cough) the difference between European vs American health care systems, as can readily be seen by comparison of TV programs. That will have to wait…
Michael ( April 5, 2009 | 09:44 am ) my good man, we are but two ships passing each other in the dead of night. Here is what I was talking about, and I will admit that I might have mislead you.
My question remains valid, and although posed more than once whenever our hosts bring up Health Care, non of them are willing to answer.
Man and boy I whacked away in the field of medicine as a physician. The typical patient you describe is a distinct minority (certainly below 1% of the population) and is actually suffering from some form of underlying mental illness. As you are talking about total cost, allow me to point this out:
And thus Michael, you will understand why John McCain’s Health Care plan included a proviso to allow you to buy you medications in Canada, and why Obama’s Health Care plan included a plan to halt the 17% surcharge which was “given†to the Insurance companies.
Michael, my friend, stay in good health. You really do not want to explore the US Health Care System.
“”(2) We do know that we are paying more for health care, with worse results in health results, than any other country.””
“”””””””””””””””””””””””””””””””””””””””””””””””””
Since this statement is patently false,should we accept the rest as truth?
“We’ve got Harvard MBAs out on the streets now. We’re going to, what, send them to learn a trade? Caulking windows, perhaps?”
I think we would be better off if the Harvard trained MBAs did spend some time doing a real trade…
Bush is available…
Barnum & Bailey are looking for a new circus master.
I will provide the exploding cigar, fright wig, size 22 shoes and all the make-up that Reich needs……for the next torturous four freakin’ years.
Vanish, Robert.
You are in the way.
Guess what, people in other countries get charged less for movies than we do. You’ll pay more for a copy of Windows than someone in India or China. We get charged more in the USA because we’ll pay more in the USA. If they halve the cost of a drug in the USA, you won’t move double the volume, your volume will likely change very very little.
Places like Canada and Sweden, they won’t pay more, so they’re not charged more. This also means that if a drug company can’t make money selling at the prices they’re willing to pay, those drugs aren’t available in those markets.
Dave, honing in on your view … you see a problem but think it should be fixed with billions not trillions?
Note:
I really don’t know what the answer is here, but I can observe that denizens of this blog seem to cope primarily by avoiding that kind of news.
We certainly have no responsibility to replace that global wealth – much of it paper profits anyway. At the same time, it provides a rough size for the air pocket we’ve hit. We may have to inject “enough” cash to cushion the fall.
The joke in some econ circles is to take the Jaws line “We’re going to need a bigger boat” and recycle it as “We’re going to need a bigger stimulus.”
YMMV
More, you may not trust DeLong, but he’s quoting here:
Justin Fox: Now Job Losses Are a LOT Worse than 1981-1982
James, unfortunately your post’s thesis witticism rests on ignorance, since Reich isn’t “making up” U6, and U6 isn’t new. I’ve been there, man.
BTW, my hazy understanding is that the history of measuring unemployment is a chronicle of governments narrowing the criteria for classifying people as unemployed rather than widening it.
Not sure I buy this. A lot of that wealth was an illusion, base on perceived, not real, value.
I don’t actually believe in “real” value. There is only momentary agreement, based on people’s continuously changing perceptions and expectations.
Floyd (April 5, 2009 | 02:17 pm) my good man, you have truly placed me in a bind. The simple solution would be to list 10 links that substantiates my contention that we are paying more for health care than any developed country, yet by standard public health criteria our health outcomes are worse then those countries.
The trick is to get you thinking. So I will start with a news release by the Business Roundtable which has this to say:
There is some between country comparison health care data, which is rather sparse. The news release goes on to say that:
Thus, no smashing solutions, just more of the same. If you click on the graphic bar chart of the Yahoo article it will enlarge. Inspection will confirm what that rate of increase in health care expenditures is greater for the US than the indexed countries.
Our host, James Joiner would surely sniff with disdain at the above presented information, he after all is data connoisseur. The link below is chosen with our host in mind. Then there is this dreadful fixation that Dave Schuler has that we cannot increase health care benefits to the disadvantage population because it will strain the system. This is from the abstract of a working paper by Organisation for Economic Co-operation and Development:
This paper is a bear, but it does have a series of bar graphs which are informative. A PDF form is available at their web site or at a link at he top of the paper, and a printed version will allow study at your leisure.
Further information can be found at Wikipedia, with links that may prove helpful to you…
Said it before, but I will say it again. To the open mind, data speaks for itself. At your request, I will substantiate with links any points that I have made, or further nail down the above central contention.
Please come back with an acknowledgment, I am slow thinker and a slow writer and it would pain me to think that you would challenge, but not respond.
You will have to forgive me Michael (April 5, 2009 | 04:58 pm ), my good man, but I do not have the energy to search through my files to provide substantiating links to some of the points you have made. This I can easily refute:
First of all, the national governments negotiate a price, with a reasonable profit built in. Second, if if commonly used meds were not available, John McCain’s Health Care proposal to allow US citizens to easily buy meds from Canada would have immediately been shot down.
I am talking about common every day meds. You can check this with simple Google searches, for example “International comparison of medication costsâ€. Some of the more experimental, and in part unproven drugs may not be available as part of the health care plans in foreign countries. But guess what, the odds are your Insurance plan will not pay for them either…
Go back to my 11:04 am post, and ponder my Pssst #2. In none of the countries I have mentioned, or indeed visited, are prescription drugs advertised. OP tumescence index refers to the most commonly advertised prescription drug family in the US. To put it into perspective, US drug manufacturers spend more on advertising then they do on research.
Pssst: Pardon my rather soft and flaccid argument, but my insurance only gives me six of them pills per month, with significant co-pay. Any more is out of pocket…
Reich is a kook one step below Kucinich.
Our Paul;
Let’s take the discussion from generalities to specifics. As an individual with access to health care, what country would you want to be in when struck with a catastrophic illness?
Let’s not forget that generalities are always false.
Universal access to mediocre health care may improve average results at a lower cost, while limited access to to superior health care will certainly yield superior results for those with access.
Now, consider that most people with access to adequate food and shelter will live three score and ten without ever visiting a doctor.
It is primarily intervention medicine that prolongs life for the percentage that need it, and it is just this group that needs more than mediocrity.
So, the point is that universal access anywhere in the world has come at the expense of excellence.
Better average results at lower cost can come with mediocrity however, since most people rarely need excellence, and those that do can therefore die without significantly skewing the statistics.
Nice of you to come back Floyd (April 6, 2009 | 11:52 pm), I will do my best to answer your first question:
The choice would be Sweden, but there is a tad bit of bias in this choice. I did a post doc at the Biochemistry Institute, University of Uppsala many years ago. The University Hospital at Uppsala is world class. Seventy miles down the road in Stockholm lies the Karolinska Institute, which is akin to our own NIH, with available expertise. As Sweden is part of the EU, a treatment that is not available in Sweden, but available in Germany, would be fully covered. Although I could stumble along in Swedish, most Swedes are fluent in English, and if you are a physician, fully aware of what is being published in American Medical Journals.
As you are talking about a catastrophic illness, one has to consider such aspects as terminal care, home care services, rehabilitation, and nursing home facilities. I will not piece out these individual areas, but just between you and me, they are equal and exceed those found in my home area of Rochester, NY. (Both towns have Universities with major Medical Centers, and are comparable in population density). It is these services which are essential in the management of chronic disease or the recovery of catastrophic illness that tipple the choice in Sweden’s favor…
All you ever wanted to know about the Swedish Medical system can be found at the web site of European Observatory on Health Systems and Policies. At the very top of this link is a large PDF file. The content page of this PDF file will allow you to pick what chapters might be of interest to you. If you go to the home page of this link, you can input your country of choice, and scan their health care system.
I must confess that this statement of yours has me stumped:
On one hand it seems you argue that excellence in medical care is not achieved in those countries listed in the European Observatory link, above. That my friend, has the slight odor of the Ugly American view of the world, everything is absolutely much better in the Shining City on the Hill. I suspect that if you ever had any contact with European medicine you would change your mind as to the ability to render high powered medicine.
On the other hand it seems to imply a triage function in these countries. Resources flow to support availability of low level medical care, and away from technology, research, and innovative exploration of medical care. I do not think you will be able to substantiate that claim. We are not talking about under-developed countries where an electrolyte solution will dramatically alter mortality rate of diarrhea disease.
Of course, one could argue that data presented by the Organisation for Economic Co-operation and Development (presented and discussed above in my previous post) is slanted by those dreadful Europhiles. The Common Wealth Fund studies health care in the US and in a 2007 study opened up with this lovely:
You will note that the disparity in care in the US is not income dependent. The full report, plus its graphics can be found at the top of The Commonwealth Fund in yes, (horrors) PDF files.
Of course you will able to find alternative views, such as the drive by shooting by the Spectator. But, you will note no data is presented, no problems are explored, and as such, no solutions are presented. On the other hand, Karen Tumulty presents a personal account of her brother’s health care crisis in Time Magazine (Time, March 16, 2009) which is well worth a quick read.
Please come back with any comments, or if you have any questions. I will keep this thread open on my desk top for a few more days.
Our Paul;
We are discussing an issue over it’s cold dead carcass.
Socialized medicine is upon us.
Mandatory “universal health care” is inevitable.
The fact that I oppose it, is of no consequence.
You have made it clear that you have thoughtfully arrived at a different conclusion than I on the merits.
This is not so much due to a disparity in education as it is a difference in perspective.
I prefer the uncertainty of freedom to the golden cage of security offered by government, even if it claims to be acting in my best interest.
To clarify, I hold Herbert Hoover in much higher esteem than FDR despite the latter having better press.
I have made the same mistake you are now making, which is to assume that everyone would agree with you, if only they understood all the facts.
Alas, it can never be so,we must continue to respectfully disagree. Thank you.