Jussi Ahokas Profile picture
Jul 29, 2020 22 tweets 12 min read
I seem to have time this summer to read another intriguing book by a #MMT scholar. So, what follows is some remarks on @ptcherneva's "The Case for a Job Guarantee".

1) From the top a very readable and eloquent presentation - I like the compactness of this book series.

2) It is difficult to find more timely subject for non-fiction book. @ptcherneva portrays nicely why everbody should be interested in #JobGuarantee proposal. Everyday examples in the introduction bring the unemployment question to right level of abstraction.

(To be continued...)
3) Why do we need #JobGuarantee? Because the current policy regime relying on the idea of natural unemployment (NAIRU) is theoretically flawed and morally questionable. The relation between inflation and employment is at best shady. The RIGHT level of unemployment is zero.

4) Another reason is that labour market does not function as fluidly as is commonly understood. There is widespread discrimination and people are not treated equally. E.g. long-term unemployed are not wanted by the firms - even in good demand conditions.

(To be continued...)
5) Besides the fact that there is unemployment in good times, in capitalist economies bad times are flowing in regularly. And unemployment gets worse (as during the #coronaviruscrisis). Usually recovery in employment is slow. #JobGuarantee would make it fast.

6) Maintaining high unemployment (for whatever reason) is "expensive" - we are constantly using less (labour) resources than available in society. Lot of useful and productive work is lost forever. And people want to work - #unemployment is devastating!

(To be continued...)
7) #JobGuarantee is an important part of a new social contract, argues @ptcherneva. She makes an interesting point: actually we already have many state guarantees in our society (for households and firms). #JG would be just addition to "guarantee package".

8) As #JG guarantees universal but voluntary access to a basic public service employment it also provides a living-wage floor for the economy and a TRUE full-employment (no other employment measures needed). #JG is a powerful automatic stabilizer, too.

(To be continued...)
9) As #JobGuarantee expands in downturns and shrinks in expansions and has direct effect on employment you could not imagine better stabilizer in economy and society that aims for high employment (rate). It is useful in controlling both inflation and government spending.

10) Finally, implementing #JobGuarantee is only moving from unemployment stabilizer (unemployment benefit) to employment stabilizer (wage + socially productive job). #JG is preventive: it keeps people active, helps improving skills and reduces uncertainty.

(To be continued...)
11) The #JobGuarantee will help people to transition (from unemployment to employment, from JG to other public, non-profit or private work). In USA it will give wage rise to many at the same time strenghtening social safety net. It creates opportunities in many ways.

12) @ptcherneva argues that #JobGuarantee and the new labor standard which comes with it benefits especially service sector workers. We live already in a service economy - where it is impossible for many to say "no" even to a bad job. #JG will change that.

(To be continued...)
13) How much does it cost? Well, it is quite easy to show that US can afford a federal #JobGuarantee program. @ptcherneva reminds us that US is a Currency-Issuer which can make the needed payments. Also modelling (SFC) results are quite convincing. #JG is good for economy.

14) Much more important question than how to pay for it (in financial or real terms) is how to implement a #JobGuarantee program.

(To be continued...)
15) What are the features of #JobGuarantee program proposed by @ptcherneva (for US)? It should be voluntary but inclusive, permanent, federally funded but locally administred and it should create public service jobs in the first place. #JG should also provide training.

16) We already have institutions to implement #JobGuarantee. Job Centers that today provide payments and services for unemployed could also provide #JG jobs in cooperation with communities. There are many examples of public job programs all over the world.

(To be continued...)
17) Interesting view is that #JobGuarantee could be a tool to build participatory #democracy. When jobs are designed bottom-up listening to communities and civil society actors the actual needs of society will be met with the program.

18) @ptcherneva suggests JG which builds #CareEconomy being actually a national care plan - care for environment, people and community. This is interesting framework for a macroeconomic stabilization mechanism (usually care is not mentioned in this context).

(To be continued...)
19) @ptcherneva anticipates concerns towards the #JobGuarantee. Will #JG make government bigger, will it destroy productivity growth, is it actually a "make-work" program, will it crowd out good business, will technology destroy also JG jobs? No, she explains convincingly.

20) Moreover, is #JobGuarantee feasible as a counter-cyclical instrument, is it feasible politically and again can we really afford such a program? Yes, is the answer.

Everything you need to know about #MMT oriented Job Guarantee program is in this book.

(To be continued...)
21) To sum up: I really enjoyed reading the coherent presentation by @ptcherneva. I am sure that #JobGuarantee will appear often in policy discussions in coming years. Green New Deal surely is a good platform for #JG but the usefulness of such program does not stop there.

22) #JobGuarantee can be a permanent fix for Monetary Economy or Entrepreneurial Economy where the full-employment is NOT a NATURAL tendency. If we get cold feet with universal and global #JG, we should in any case take smaller steps in that direction immediately.

(The end.)

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More from @ahokasjaj

Jul 21, 2020
Some remarks on @StephanieKelton great book "The Deficit Myth".

1) It is a fabulous popularization of #MMT (neo-chartalism).
2) The division between Currency-User and Currency-Issuer is explained in a very clear manner - will be THE eye-opener for many.

(To be continued...)
3) Key principle (of #MMT) is to redefine "balanced" in economic policy and move the focus from balancing government spending and taxes to "balancing" full employment and price stability.
4) Changing NAIRU oriented policies to Job Guarantee is the main tool.

(To be continued.)
5) Ditching the NAIRU (or any natural unemployment rate) concept is very important also theoretically. #MMT claims that there is not straightforward relation between unemployment and inflation, the latter being much more complex phenomenon than mainstream view assumes.

Read 13 tweets

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