An instant messaging exchange, about the Hartmann Radio Show, Friday, between me (STF) and another guy (OtherGuy): (editted to make us look better)
OtherGuy: hartmann was talking to krugman, who was cool until the end when he said the usual (employed economist) bullshit about there being new jobs to replace all the exported ones. (WHY do otherwise intelligent, skeptical people believe that absolute crap?)
STF: Because he’s a professor and he has tenure.
OtherGuy: yeah, but I assume that some equations work out to prove it too. I wish I had the time and inclination to prove why these equations are flawed.
STF: other than using our own eyes?
STF: Brad DeLong’s site goes on about this as well.
OtherGuy: usually when your own eyes contradict equations it turns out your eyes are being tricked. or the equations are based on some very subtly wrong assumption.
STF: Here’s how I worked out the problem once: The idea is that you take a $100,000 job, and send it to India where the worker is paid $10,000. That means you have $90,000 more in your economy to invest or buy stuff.
OtherGuy: yes, but everything is more efficient!
STF: So your loss of $100,000 consuming power is balanced by the purchase of $10,000 from you by the India guy, AND the $90,000 extra for investment or consumption here. BUT that doesn’t work if instead some rich fuck POCKETS the $90,000 and puts it in a swiss bank – which is what IS happening. The concentration of wealth cancels out the beneficial results of that extra $90,000 AND nothing at all says that $10,000 WILL come back to the US resulting in exports
STF: at least in our lifetime.
OtherGuy: except for literally putting the money in the mattress, “just pocketing” is a myth. yeah, the lag time is the problem.
STF: Well, if the money goes out of the US, it helps the Swiss or Caymans prosper, which is supposed to also come back to us. Eventually. But, again, not in our lifetimes.
OtherGuy: and the fact that entire industries seem to be wiped out almost instantaneous. the one question NONE of these people can ever answer is : “What do I retrain FOR?”
STF: Yeah, retrain, to become a different cog in the machine. Your only value in America is the extent to which you can serve as an economic unit, making some rich fuck richer.
STF: Another problem is that Mexico is losing jobs to VietNam and VietNam is losing jobs to Cambodia and Cambodia is losing jobs to China.
OtherGuy: Exactly. and as hartmann always points out that global capital is (now) almost completely free to move anywhere instantly, whereas labor is stuck where it’s stuck.
STF: On the macroeconomic scale it’s a wash. But it doesn’t take into account WHO benefits. Like the room where there’s a hundred people, and Bill Gates. On average that is an extremely wealthy room full of people. Never mind that 99 of them are starving.
STF: It is a downward spiral. A free market in labor in a world with too many people is necessarily a formula for worldwide poverty.
STF: If the market is completely free and “clears rapidly” the consequences NECESSARILY are that wages reach subsistence AFTER enough people have starved, leaving just enough workers for the jobs.
OtherGuy: It’s really very depressing to know that there is nothing I can do that will prevent me from continuing in relative poverty for the rest of my life. [Note – OtherGuy is a programmer.]
STF: Until enough people have starved off, of course the wages don’t NEED to be at subsistence level. You only need to pay enough that someone will take the job and starve slower than the rest.
OtherGuy: eat the fucking rich!
OtherGuy: and EVERYONE (except a very few rich fucks) would be better off.
OtherGuy: Revolution. heads on pikes!
STF: In such an economy, where the unemployed are starving off, and employers are only paying a penny or so a day until enough people have starved, leaving just enough people remaining to do the jobs, a person with extra fat on his body has the advantage over a thin person, because the thin person will die of, and the person with fat will live long enough to outlast the labor surplus
OtherGuy: that’s my plan!
OtherGuy: (being fat)
STF: You’re way ahead of the game
STF: you are one of the elite few who will survive
STF: survival of the …
STF: wait for it…
STF: I think I should blog this
Moral of the story: Who is our economy FOR, anyway?