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1. Abba Lerner was clear “functional finance is not priming the pump” (1951). If we wanted tight full employment, he argued, direct job creation in the form of public works may be necessary in order to attain and maintain full employment and price stability.
2. That’s what the #JobGuarantee does. It secures full employment, not by “deficit spending” on “low quality jobs”, but on directly employing the unemployed in public service jobs. Here is the difference:
3. We can have a surplus or balanced budget (depending on external position and private saving desires) and still run a Job Guarantee. Deficit is a result, not a method of financing. Importantly, aggregate demand management (ADM) can never ensure enough jobs for all who need them
4. Traditional ADM stimulus–contracts to firms, subsidies, tax incentives, or any measure to stimulate investment and consumption–does not guarantee full empl. In fact, we end up running against bottlenecks and creating inflationary pressures well before we get to full employment
5. Even public works won’t do the job UNLESS we explicitly commit to hiring every unempl person who needs work (+ we can’t fluctuate large scale public works countercyclically). The JG makes that commitment & moves anti-cyclically, which we’ve seen even with smaller jobs programs
6. The Job Guarantee employs the unemployed directly in public service (and anchors min wages). Importantly, by design and definition, we know that countercyclical spending on the program is *never* more, nor less than what’s necessary to create jobs for all.
7. So the JG is by far superior inflation control to Brad’s preferred “prime the pump” deficit spending to incentivize private firms to create jobs and get “the most value for their money”. We know exactly how much to spend on the JG to get FE, but we do not know w/ pump priming
8. Indeed, there's always a cohort of workers that employers will refuse, not the least b/c they discriminate, and no amount of incentives can induce firms to hire them.
9. When at the peak of a cycle, employers raise skills criteria, people who are first-fired & last-hired, may actually NEVER get hired.
10. And what the heck is a “low quality” job anyway. Incinerated Paradise, CA & storm ravaged Puerto Rico still need to be cleaned up. Trees must be planted, wetlands - restored, public spaces - maintained. These are the “low quality” jobs that make everyone's life livable.
11. There are countless of tasks we neglect doing because of two pervasive myths
1) That government is not good at creating jobs &
2) the least skilled among us have nothing to contribute.
This neoliberal idea that only jobs for profit are “quality” cannot die soon enough
1) That government is not good at creating jobs &
2) the least skilled among us have nothing to contribute.
This neoliberal idea that only jobs for profit are “quality” cannot die soon enough
12. When someone rejects the Job Guarantee, they endorse the bankrupt view that ‘unemployment is unfortunate but unavoidable’, that some people are disposable, unworthy of job opportunities to make a good life, unworthy of the chance to contribute to the public purpose. /end
