Tuesday 12 January 2010
Some thinking from across the two waters
Michael Taft: Some robust progressive thinking from the US and the UK..As the UK debate is in danger of descending into which party can cut how much, Neal Lawson of Compass calls for a re-explanation of the Keynesian project and how it is better suited to address the economic and social fall-out from the recession. Across the other pond, addressing the spectre of rising unemloyment, Marshall Auerback of New Deal 2.0 proposes that the state become the 'employer of last resort'. Whatever the differences (in those countries they have money printing presses and large domestic markets to operate sustained demand management), there are still lessons to be drawn - not just on the particular ideas contained in the articles, but on the very idea of progressive politics becoming the primary engine of ideas in the national debate.
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Apart from the admittedly catchy title, Auerback's employer of last resort proposal suffers from a few glaringly obvious problems:
* Finding useful assignments for 16 million new public servants with no lower bound on educational level, suitability of character or relevant skills.
* Crowding out of the private sector, which will struggle to recruit if the government is paying a much better overall package for a lesser skill level - it would be much more cost-effective for Uncle Sam to subsidize the healthcare of those in real low-paid jobs, as opposed to paying the entire wage and and benefits package of those in madey-uppy jobs.
* Debasing the status of existing public servants. "The pay is lousy but the benefits are great" is the traditional refrain of those employed by public schools or the police & fire departments, indicating that the benefit package is key to their sense of their own status. How is your average teacher or cop going to feel when someone with no education and a criminal record can score the same benefits package?
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