Thursday, April 3, 2014

Between Here and Full Employment

What would it take to generate full employment...really? This is murky territory, even with the best of indicators and monetary conditions. Were the Fed to adopt a nominal targeting rule tomorrow, unemployment would be less of an issue, than it is now. Still, there would be plenty of remaining concerns. Among those are numerous supply side issues which have contributed to sticky wages and contracts, let alone a sticky marketplace in general. Therefore, much depends on what one means by full employment, and what populations expect of employment outcomes.

Often, unemployment is spoken of as if it were easy to quantify. If only it were that simple! The fact that it's not so...perhaps why lingering questions don't really get answered. But this translates into awkward and ongoing realities. How can people be responsible for their inevitable roles as consumers, if they have no participation? What's more, participation happens in what essentially are both producer or "harvester" roles. In this sense, the economy is no different than earlier points in time, when survival meant having access to any good which could be gathered or otherwise processed for use.

In more personal terms, unemployment can leave people unable to either reach out to others or continue planning for their futures. Even though a similar process is a bit inevitable for boomers who lose their work roles before retirement , unemployment should not be happening to the younger generations. They are of an age when work is a tremendous part of one's life. These folk are far too young, to be feeling failure, so keenly. This kind of failure is not as easy to overcome, as many of life's setbacks.

This is one reason I took an "economic access" perspective, which can also remain in play once an economically defined natural unemployment rate has been reached. That is to say, "full employment" could be reached in economic terms and yet I would still have ample reason to continue this project. Another way to think about it: how can any society achieve better economic integration? With this vantage point, it becomes easier to consider what appears as inequalities and related lifestyle illusions at the same time. Let alone the fact that excessive quantification, means inequality is presently winning the battle for attention in public dialogue. Unfortunately that only leads to more confusion, and fewer solutions.

There seems to be a growing struggle between government and other representatives of the marketplace, as to which should lead the way out of stagnation. Here lies the real danger of an ongoing lack of supply side efforts for positive structural reforms. I continue to prod them, because I have a bad feeling what might happen in their stead, if they do not make real efforts on their own for economic growth. If representatives of the marketplace do not step up to the plate in the months ahead to make positive changes, there's a real chance that government will try to further define the marketplace, for those who actually take part in it. That also means fiscal measures could still win out over monetary measures, in spite of the efforts of market monetarists such as myself to show the greater effectiveness of monetary policy.

Some aspects of present day unemployment are different from in the past, and many who are confronted with unemployment have found themselves in this predicament through no fault of their own. History is replete with examples of populations coping with economic exclusion, such as wandering "hordes" and mass emigration. Sure, a few brave individuals will still go out into the wilds to tend to needs of food and shelter. But if people pull a stunt like this - particularly if they include children in the great experiment - they are quickly brought back to civilization, when found. And yet they may have had an easier time in the woods. Why should it remain more difficult to provide food and shelter for one's family in civilization, than it is in the wilds?

It's hard to admit that we haven't yet figured out, how to create full economic participation. But more blaming all around, definitely isn't going to help us now. Thus, the task remains: how to expect people to act human and responsible, when they may not necessarily have realistic ways to do so? How do we account for the fact that it is no one's job, to tend to full economic participation? As long as this question is not adequately answered, people will still resort to prisons for those that no one can figure out "what else to do with". What's more, statistics tell an important part of the story, but not the whole story.

Even the realities can feel different from the statistics, depending on where one lives. For instance, consider the averages of lifetime expectancy. There's something I never expected to see at this point in my life: many a baby boomer has already let go of the struggle to survive. Newspaper obits (let alone the evening news) tell the story how harsh these realities can be - especially for those in their fifties. Who stops to consider, how many don't get close to the median age we expect people to live? There's little question that meaningful work in one's life, plays into life expectancy. Statistics get really irritating for instance when a commercial airs with a self assured baby boomer proclaiming "I expect to live a long time", thus blah blah. Oh yeah, how do you know?

A couple of years ago, I was foolish enough to engage in a little online teasing with another commenter. I say foolish, because teasing doesn't come naturally for me! As a result, one of the other commenters let me know that I was not only a rabble rouser - I was a dangerous rabble rouser as well. I had to back up, apologize to him and explain that my perspective in terms of ideas, was from a place of unemployment. He too backed up with an apology and then basically said, not to worry - just leave this important matter to the experts.

If only I could! The experts remain split along ideological and political lines, which also means continuing confusion at the Fed. Sometimes I have to remind myself to just remain remain peaceful and focused. Because the message still comes through loud and clear that I'm not "supposed" to be "helping" - i.e. nothing about my life offers the responsible kind of position or authority that is required to do so. But ultimately we all have to help ourselves in order to survive - we can't really expect others to do that in our stead. There is just too much fear involved, when I consider what could still happen to others such as myself, who have already been told their efforts are not needed. This also impels me to continue in my own work.

Unemployment is only a part of what any central banker is expected to consider. And yet oddly enough, the primary conversation around unemployment continues to exist in the macroeconomic realm which of necessity only assigns it a partial priority. Why has no other segment of society surfaced to take on a vital responsibility, which never should have belonged solely to macroeconomists or central bankers? After all, if such efforts had previously been in place, I would never have needed to raise the kinds of questions and issues which on some days simply bother everyone.

Recently, David Beckworth wondered how many "Fed watcher" bloggers would still be at it, if the Fed had not taken on what has become an ad hoc agenda. Several commenters assured him there was still plenty to write about! In the meantime, the fact that nominal targeting is wrought with political issues, just makes it all the more difficult for the Fed to contribute the monetary stability which would at least indicate the level of employment presently possible. The fact that the Fed is not doing its part now, as David Beckworth indicated, "does not bode well for future economic crisis." This is why the average layperson also needs to contribute to the ongoing debates (and likely will be needed indefintely), as Bonnie Carr noted in a recent post.

Advocacy can be difficult at times, because we live in a world which is not readily amenable to compromise. I can see where market monetarism ties into other important aspects of life, plus there appears to be any number of applied circumstance in which market monetarism could prove its value. Hopefully in the years ahead, I will remain able to provide my contributions and thoughts.

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