A Qualified Critique of Popular MMT Soundbites Jul 14, 2012: 2360
#OccupyWallStreet: Supporters, Dismissers & Repressers Oct 9, 2011: 1642
A blog on current economic issues seen from the perspective of practicality and Real life. An attempt to unravel the prudent from fantasy in economic policy and actions of people, government and markets.
..extraordinary rates of emigration among young people in Europe’s disaster economies — not really a surprise when you consider the incredible levels of youth unemployment. But as she says, once those young people are gone, who will pay the taxes to support retirees?
..view (opposing QE) only makes sense if you believe that the problem with our economy lies on the supply side – that workers lack the incentive to work, or are stuck with the wrong skills, or something. And that’s just not what the evidence says; instead, it points overwhelmingly to an insufficient overall level of demand.
An alternative approach can be to survey businesses to establish the number of workers that will need to be imported in each profession – IT, Finance, and so on. Based on these numbers, allocate Visa and Green Card numbers to be given out that year. In granting Visas, go in decreasing order of wage offered to the immigrant worker. In granting Permanent Residence, go in decreasing order of the tax the person paid in preceding 5 years. This approach automatically favors the professionals that are the best contributors into the economy (as producers and consumers) and the welfare system, and truly most needed by employers because the wage paid says more than anything else on this matter; while, with the numerical caps, also prevents the displacement of “US workers” by wage undercutting. No file-by-file procedure Bureaucracy or employer sponsorship or expensive attorney representation required to run this - this can work more like applying to DMV for a driver's license with a few required documents or merely the SSN. This approach also incidentally increases the concentration of such people in society that will be able to stomach a complete breakdown, or partial or complete rollback, of the welfare system should it occur.Keeping and continuing a system that adds more and more low earning people in the working population, and looking the other way on structural unemployment – manifest and latent, will yield a bigger disaster on deficits and welfare when the current working age population retires. The economy needs a bigger number of young, energetic, productive people, homegrown and immigrated, that can find themselves well-paying jobs. Let young people sell themselves in a free market for talent, and the others will be able to find some service they can sell them. Ultimately, the formers will be able to cover some of the costs of retirement benefits for the previous generation, buy houses, in the process support service sector jobs in real estate and banking, and provide some support to sinking home prices. In the scenario currently running, the middle aged get artificially maintained in their jobs, then get to enjoy all their entitlements As-Is, and pass on an empty bag to those below 55 now. Any 'adjustments' need to hit everyone, starting with the ones whose elected representatives all these years ran an era of lopsided Financial Governance and Immigration.
In blindsounding the bugle of Capitalism, its own objectives and intended milieu are getting compromised. In the guise of Capitalism, Individualism, and Success-celebration, nonsense athrives. Capitalism is supposed to continuously produce winners and losers - like Olympic sports, and not entrench one time winners forever.
Yet efforts, or even talk, to bring things back to sense get lost or retreated in the rhetoric of “Capitalism” pointing to “Class Warfare” and “Big Government”, even as the current state is Parsecs away from any kind of Capitalism people or intellectuals think they ever bought!
The process will have use of bright Finance professionals that truly know their stuff and not smooth sailors on Government Manufacture. They would quantify value of the institutions, pools, liens to be acquired - using probability distribution projections around eventual defaults on the underwater mortgages v/s their successful redo, home price index trends, and so on.