Let me start by noting if you believe markets solve all problems of resource creation and distribution, you should not read this blog.
This condition is likely if you believe one or more of the following:
The confidence fairy.
Unregulated capitalism that will raise all boats before we hit a Paleo Eocene Thermal Maximum–like climate.
Capitalists put profit above power.
Markets have a nature.
Main stream, aka Neo-Classical, henceforth, here, Theo-Classical economics, has anything to do with science.
Culture, tradition and history have nothing to do with markets and so called market forces.
There are things in nature called “market forces”.
A country with a sovereign currency can go broke.
Any time money is created, it will lead to inflation.
Hayek’s “Road to Serfdom” was not a polemic in response to Naziism.
Global Warming is natural.
If you believe any of these things, please, do us a favor, and don’t bother yourself with this blog.
At least 23 million of us are Un- or Under- employed.
If we include people working in jobs not suited to their education (we’ll call them mis- or dis- employed), the number is enormous.
and (where S&E = Science and Engineering),
“Scope of the S&E Workforce
The S&E workforce has shown sustained growth for more than half a century.
- The number of workers in S&E occupations grew from about 182,000 in 1950 to 5.4 million in 2009. This represents an average annual growth rate of 5.9%, much greater than the 1.2% growth rate for the total workforce older than age 18 during this period.
- Workforce growth in S&E occupations from 2000 to 2009 was slower than in the two preceding decades. Nonetheless, at 1.4% annually, it exceeded the rate (0.2%) for the general workforce, which barely grew at all.
Many workers outside S&E occupations have S&E training or use related knowledge and skills in their jobs.
- Individuals with an S&E bachelor’s degree or higher (17.2 million in 2008) or whose highest degree was in S&E (12.6 million in 2008), substantially outnumbered those working in S&E occupations.
- In 2008, about two-thirds of those with an S&E highest degree but not working in an S&E occupation reported that their job was either closely or somewhat related to their degree.”
As a society, we must decide if we will allow an enormous army of unemployed, temporarily employed and working poor to exist.
If enough of us decide that this is unnecessary, it is up to us to organize a voting block for our interests.
Left to their own devices, business folk will continue to shrink the economy. They can not help it. It is in the very nature of business. This is why we must step in and, at the very least, guide and control the business community that has, so far, brought us to the brink of a climate that will force most of the world to live underground (see http://www.scientificamerican.com/article.cfm?id=the-last-great-global-warming and http://barringtonstewart.wordpress.com/thermogeddon-when-the-earth-gets-too-hot-for-humans/), like some ruby miners in Australia.
A short, fast, easy approach: Set up (carefully) an incentive system to allow employers to hire and train long term unemployed through grants, and credits. Couple this with job sharing incentives.
Infra-structure is not a bad start, but likely short term.
We need more programs like the 27.2 bn spent on renewable energy in the 2008 stimulus. We need to address global warming and joblessness in tandem. We can easily do so. And yes this might mean government picking winners and losers. Note they did better than Bain Capital in terms of success. Notice, even Solyndra (needlessly destroyed glass tubes aside… which should not have been allowed) left behind a great deal of plant and equipment that is providing jobs, as we speak.
If the Federal Government does not step in to direct the markets to produce a sustainable economy, the environment will do so, apparently sooner than later.
Before any of this occurs, we need to organize a block of voters who understand the Federal government has a printing press which can be used to expand the capital base, provide jobs, goods and services. Like in the 1940s, as long as you expand goods and services while you expand the money supply, you won’t have much inflation.
The private sector is helpless in the liquidity trap we are in. They Who Can Print Money, I.e., The Federal Government, is the only entity with the ability to act in a counter cyclical fashion. It is obvious the private sector cannot meet the challenge. Business must please their owners every quarter. They can not take the massive scale re-tooling of the economy that is required to change the course of global warming.
We have done this with war production in a way that greatly benefited the private sector. Much as Japan did in the 19th century, the US Federal Government built plant and equipment, kept ownership during the war and leased the facilities at a minimal rate. At the end of the war, these facilities were basically handed to private corporations. While not optimal, we can do this again in a move to employ everyone in a meaningful, remunerative job, while hopefully avoiding a run away green house effect we may already be to late to stop.
It worked in the late 1930s and early 1940s. It can work again.