Best Methods For Fixing Unemployment

Wait, if Barkey is working for police forces, wouldn't hiring a bunch of laid off police workers help his field?

Yes, it would. Because one of the things we've talked about here is how retraining and job placement programs do nothing to affect the availability of jobs (save for people you hire to do the retraining and placement).

Krugman was called out a bit on waving his hand at so-called structural unemployment issues, where there is simply not a pool of skilled workers to match with skilled jobs, but if that were true, he argues, we should see persistently higher employment rates among so-called skilled workers. Unfortunately, a college education has not rendered anyone in this economy immune to getting laid off — unemployment and underemployment among workers with degrees has trended along with the general population.

edited 2nd May '12 7:54:24 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

^^

It would help me get a job in a field I have knowledge in, instead of the eyeball gouging stress I've been going through learning an entirely new one. Not to mention I'd make more money as a cop than I do as a procurement specialist.

My entire adult life has been spent learning the law enforcement and military trades.. So I'm basically equivalent to a 20 year old unemployed kid with an associates degree. At least before you add globs of life experience from supervising soldiers and deploying to a warzone a few times, and then minusing the social penalties that come from that.

Well Barkey, I recommend that you call your representatives in congress and say HEY FUCKER, PUSH THROUGH SOME STIMULUS THAT'LL GIVE STATES CASH EARMARKED TO REHIRE FIRE FIGHTERS AND ESPECIALLY POLICE OFFICERS. DO IT! DO IT NOW! DO IT!!!!

I don't know if doing a Jack Bauer impression will do the trick, but it'd fun to watch.

It was an honor

Oh, and let me add that one of the so-called "structural unemployment" issues is lack of mobility in the labor force — one of the reasons why the Eurozone depression is so bad, by the way — and that's largely a consequence of the depressed housing market.

So, another way to rapidly restore economic "confidence" and therefore boost demand is to lop off a bunch of consumer debt, specifically mortgage debt. That of course is anathema to banks who cannot stand the idea that a single cent of principal might not be properly paid back — in fact, they will send you to default and foreclosure, and lose far more money, solely to establish this principle.

edited 2nd May '12 8:26:07 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Can't the government just buy the mortgages and then sell those mortgages to the homeowners?

In theory, sure. Remember, one of the fundamental principles of debt is that it's a zero-sum game: debtor obligations always equal creditor assets. Since most of U.S. debt, both public and private, is held domestically, action by the federal government could wipe out most of it in a heartbeat.

Of course, that would be ruinous to the balance sheets of creditors, and of course they are the ones with all the money to buy politicians. So it's about as likely to happen as I am to get a job selling fruit wine to Martians.

Edited to add: Krugman devotes a chapter in his book to the fake issue of the invisible bond vigilantes and the myth of "confidence" — basically he calls it a scheme by rich folks to hold the economy hostage by threatening to collapse it if they don't get their way.

edited 2nd May '12 8:36:48 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Why would it be ruinous to the balance sheets? Or is this an accounting issue "Well, technically, the thing is worth X because this is what we're owed-despite the obvious fact that it's in default"

So basically, the creditors are insisting on above market price on these mortgages?

More or less. They are playing the "moral hazard" card — the notion that debt owed is some kind of sacred obligation that must be repaid or else we have to make the poor debtor suffer.

The reason, of course, is that their self-worth as financiers is based on the stability of the debt they issue. If the government is allowed to alter the terms of their business, their superiority as Gods among men is called into question.

edited 2nd May '12 8:40:08 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Fix'd it for you, Fighteer.

edited 2nd May '12 8:38:44 PM by RadicalTaoist

Share it so that people can get into this conversation, 'cause we're not the only ones who think like this.

HA HA HA HA HA. Banks playing the moral hazard card.

Hypocrisy!

Hypocrisy indeed, especially as the response of a properly activist government to such a threat would be to say, "Go ahead. Do it and we nationalize you, fire all your executives, and herd them all into prison camps for treason or whatever equivalent applies to people who deliberately assfuck their own country."

edited 2nd May '12 8:49:20 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

What countries in the world are success stories as far as nationalized banks are concerned?

Good question. I don't have a ready answer or the time to do the research. But the whole point of a banking system is to facilitate the use of credit to supply economic opportunities. If the banking system is actively working against the prosperity of a country, then the government can and should step in and take any appropriate measures to correct it.

The nationalization wouldn't be permanent, nor would it likely be necessary for all banks. All it would take is the government to make a few examples and prove that it's not going to be cowed. Financiers like having comfy lives in million dollar homes and the feeling of self-worth that comes from lots of expensive food and club memberships. They don't like living in Leavenworth.

---

Edited to add: Krugman makes an interesting observation in one chapter. He notes that some of the biggest beneficiaries of the housing bubble and the unregulated speculation of recent decades were hedge fund managers, who took fees for managing assets and a percentage of the returns, and have been living like ancient kings as a result.

Guess how hedge funds, on aggregate, performed against the general stock market, or even against Treasury bills, in recent times? Just one guess — it shouldn't be hard to figure out, given the setup. Spoiler text covers the answer.

They consistently underperformed even Treasuries. Yes, hedge fund managers got mind-bogglingly rich by obtaining returns worse than if the investors had just bought Federal bonds. And we are applying moral hazard to homeowners? It makes me want to vomit.

edited 2nd May '12 9:03:24 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

@ Train maintenance

Yeah, you really don't know how insane corporations get with cutting costs. Air Canada fired the entire air maintenance union then shipped the work to China. Then, on top of that, Chinese work crews are fired after working on one plane, therefore no one is allowed to have experience, thus you don't have to pay for experience.

@ China outsourcing to USA

Actually, the wages in USA have dropped to the point where China is actually doing that. There are a few manufacturing plants (such as an aluminum plant) which China has opened in America, creating a few hundred jobs here and there. Many US companies have also pulled out of Canada (mostly manufacturing jobs) in order to offer wages that are basically so low that they would breach Canadian minimum wage laws.

@ University/College Education

Let me tell you, if American corporations could hire all Americans to do the job, they would do so. Racism is still extremely apparent. The problem is that they can't. They'd utterly fail as companies if they did so and tech is the one place where intelligence matters so much that everyone is willing to overlook bad accents, ugly faces, fat people, skin colour and religion. It's only one notch underneath banking sector in terms of equality.

The interviews are hard, the work is not easy to do and so even with millions of American college grads, most of them don't make the cut. So whatever it is that is being taught in American universities, it's not sufficient, or it's not hard enough or the culture is too geared on something that isn't helpful at all.

---

The other danger to all this cost-reduction is that we're also hurting our technological innovation and growth. It's like the Greeks with their slave labour. We really should be forging ahead and if market capitalism isn't good enough to develop new technologies, we have to vote in a government that is willing to force the hand of the market to do so. I don't want to see our society stagnate at our current technology level because we were too afraid of losing shitacular 6 bucks an hour jobs.

edited 2nd May '12 9:34:55 PM by breadloaf

Off hand, interview training would likely help the most. That and too much of the education system at the early level is designed to prevent you from failing rather than testing how much you can learn. If you're smart and you're stuck in a small class with no where to go, you learn to just tune out the teacher because you can just skim the chapter and pick up everything you need. That's not a good habit to get into.

Fight smart, not fair.

From my own experience in the British Education System, we were taught to pass exams — everything from full-on Mock Exams, to weeks (in lessons) spent revising and reviewing questions on Past Papers. We were even given copies of the Syllabus.

Keep Rolling On

The same for both Hong Kong and Australia.

A lot of people apparently have performance anxiety about tests or something from my understanding. I liked the way college did it more, essentially, it was all just longer versions of the homework that you didn't get to try again. Then again, I see the appeal of using multiple choice questions. I took a trial test one time where they tried to gauge knowledge and specifically told us that we would lose points for a wrong answer but wouldn't lose any for not answering at all. I suppose that could be used.

Programming isn't my area of expertise, but I think one of the big problems, at least if my school was representative, was the cost of getting the programs. They actually expected you to drop a few hundred dollars to use the program for a couple of months. The other option was to use the labs, which have a completely different feel and you tend not to fuck around with the commands to get it to do what you want. I think that would help more.

Oh, and adding computer classes earlier throughout schooling. I think the first computer computer*

course I took was in high school and was really weird. It focused on things like general terminology which was rapidly outdated as well as some html coding (we made everything covered in gifs), CAD for some reason and a cgi animation program. My main issue was with the last two. Then again, this was early 2000's so the school may have been out of it.

I think one of the worst things is that people are taught not to fuck with shit they don't understand. While I understand the desire to protect children from sticking their hands in blenders, irrational fear of anything and everything breaking at the slightest touch and only touching once training has been issued is neutering peoples desires to explore.

Fight smart, not fair.

Well in general, I feel that the education system is slowly shifting toward "test metrics" rather than letting teachers do what they are paid to do; teach. Students don't magic learn from tests and while they might be the best metric we have so far to gauge a student's performance, I think we've grown stagnant in that regard and not bothered to develop new ways.

What's ironic about using education to fix unemployment is how anti-education society and politics has become. The BC Teacher's Union went on strike to protest the dumbing down of the education system. That is, the politics has gotten so bad around education that teacher unions are trying to fight for student rights and better learning.

I'm sorry, but this seems silly to me. Do you have money in a savings account? What if the government decided to just give the bank "debt forgiveness"? When you put money in your savings, you're loaning it to the bank (you get interest and everything) and they use that money to invest or give out loans. So what if the economy gets bad and the government figures out that the best way of dealing with it would be to just wipe out the bank's debt (i.e. your savings account)? Would that be okay?

I don't get why creditors aren't seen as people. Those of us who have bank accounts are creditors...and I know I would use every legal means at my disposal to get my money back if the bank refused to give it to me. Why should I expect different from other creditors?

edited 3rd May '12 2:30:03 AM by Vericrat

Much to my BFF's wife's chagrin, No Pants 2013 became No Pants 2010's at his house.

Because you made a bad investment and you lost? I mean that sounds harsh, but there's really a certain entitlement at play with the idea that investments can NEVER go bad and if they do there's something horribly terribly wrong. That said generally speaking your bank accounts are protected up to a certain point and there's no realistic feasible way that you'd lose money, below a certain point (I think it's like 100k)

The whole point of cramdown, which is what we're talking about, is that the bank overestimated the actual value of the home, they made a bad decision, so the loss is spread between the bank and the homeowner instead of being entirely on the homeowners shoulders. It spreads the responsibility around to ALL responsible parties.

The reason why banks don't do this themselves, is that they can't afford to. They're still way overleveraged, and when assets are revalued, it actually makes them even more overleveraged.

Personally, I don't think you're actually going to see any sort of real change until SOME sort of nationalization is done. It doesn't matter what company and what field, but until shareholders recognize that there's a very real risk of them being zeroed out for repeated flagrant bad corporate actions, nothing will ever change. That entitlement bubble needs to be popped, and HARD.

edited 3rd May '12 6:38:16 AM by Karmakin

Democracy is the process in which we determine the government that we deserve

Federal deposit insurance maxes out at around $250,000, I believe.

You can't even write racist abuse in excrement on somebody's car without the politically correct brigade jumping down your throat!

What can I say. When it comes to numbers I tend to be really conservative.

Democracy is the process in which we determine the government that we deserve