Sallow
The Big Bad Wolf.
Well it's not a real big surprise..been sayin this for quite some time. But it's a good deal more formalized now:
A. Fire all the educated public workers.
B. They will flood the job market.
C. Wages will go down.
D. Companies will hire people for lower wages.
Simple..right?
Krugman has a piece on it:
A. Fire all the educated public workers.
B. They will flood the job market.
C. Wages will go down.
D. Companies will hire people for lower wages.
Simple..right?
Krugman has a piece on it:
The Mellon Doctrine
By PAUL KRUGMAN
Published: March 31, 2011
Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. That, according to Herbert Hoover, was the advice he received from Andrew Mellon, the Treasury secretary, as America plunged into depression. To be fair, theres some question about whether Mellon actually said that; all we have is Hoovers version, written many years later.
But one thing is clear: Mellon-style liquidationism is now the official doctrine of the G.O.P.
Two weeks ago, Republican staff at the Congressional Joint Economic Committee released a report, Spend Less, Owe Less, Grow the Economy, that argued that slashing government spending and employment in the face of a deeply depressed economy would actually create jobs. In part, they invoked the aid of the confidence fairy; more on that in a minute. But the leading argument was pure Mellon.
Heres the reports explanation of how layoffs would create jobs: A smaller government work force increases the available supply of educated, skilled workers for private firms, thus lowering labor costs. Dropping the euphemisms, what this says is that by increasing unemployment, particularly of educated, skilled workers in case youre wondering, that mainly means schoolteachers we can drive down wages, which would encourage hiring.
<snip>
A year ago, conservatives gleefully trumpeted statistical studies supposedly showing many successful examples of expansionary austerity. Since then, however, those studies have been more or less thoroughly debunked by careful researchers, notably at the International Monetary Fund.
To their credit, the staffers who wrote that G.O.P. report were clearly aware that the evidence no longer supports their position. To their discredit, their response was to make the same old arguments, while adding weasel words to cover themselves: instead of asserting outright that spending cuts are expansionary, the report says that confidence effects of austerity can boost G.D.P. growth. Can under what circumstances? Boost relative to what? It doesnt say.
Did I mention that in Britain, where the government that took power last May bought completely into the doctrine of expansionary austerity, the economy has stalled and business confidence has fallen to a two-year low? And even the governments new, more pessimistic projections are based on the assumption that highly indebted British households will take on even more debt in the years ahead.
http://www.nytimes.com/2011/04/01/opinion/01krugman.html?_r=1&hp