Welcome friends!
A great deal has been made of the so-called empathy gap between liberals and conservatives here in the USA, that is, differences in social and moral philosophies rooted or perhaps expressed in differences in psychology and behavior. Liberals are famously concerned about the welfare of other people and tend to be attracted to social, political, economic, and moral philosophies predicated on concern for society at large. They are socialists in the broadest and most literal sense of the word. Conservatives are concerned primarily and in extreme cases exclusively with their own welfare and tend to be attracted to social, political, economic, and moral philosophies dealing with freeing one’s egotism, greed, and lust for power from any constraints that may be imposed by the existence of other people. The mantra of conservatives is that greed is good. What crossed my mind this week is the ubiquity of the anti-social conservative ideology in our society and the way it can pass all but unnoticed as simply part of the background. What got me thinking along these lines was a little segment I heard on the radio the other day. Nothing remarkable in any way and very similar to many such segments I’ve heard on many such radios over the years. The subject was the Federal Reserve Bank or as we tend to call it simply the Fed declaring it would soon take steps to raise interest rates because unemployment was rather low and if it went any lower inflation might become a concern. Of course, right? Common sense. That’s what we always do. But if one pauses to think about it for a moment it is an odd sort of statement. Let’s talk it through and see if we can get anywhere.
The odd thing of course is we’re talking about slowing the economy while some people are still unemployed, which by definition translates to people looking for jobs but being unable to find them. The Fed spokesperson described the current labor market as one in which most people looking for a job can get one. Not necessarily a good one of course. That’s an entirely different question. Anyway, that’s just great for most people isn’t it? But here’s a question. What about the other people? The ones who are still unemployed? Well, that’s where things start to get somewhat interesting for me. Having been unemployed myself I understand what it can mean particularly when one is young and doesn’t have a lot of savings or investments to fall back upon. Kind of a big deal to not have a way to make a living. That’s the sort of thing that can make one do funny things. And I don’t mean ha ha funny. Seems like something we all as a society might want to get together and try to address right? But we don’t. We’re fine with low unemployment but not too low because that might lead to inflation, which we all understand can create problems down the road for everyone notably the majority of people who have jobs. So when unemployment gets too low we accept without thinking the Fed will take steps to slow the economy by raising interest rates to get the unemployment rate going back up again.
This isn’t to say we don’t have some casual armchair theorizing about why employment ceases to be a problem at some unspecified low level. The primary theory I’ve run across suggesting we should think of this issue as no big thing or as a “nothing burger” as our apparently burger obsessed conservative compatriots might put it has to do with so-called “frictional unemployment,” which relates to people who are meant to be temporarily between jobs. The suggestion is that this frictional unemployment is inevitable in a market system because things are always changing with some firms shedding workers and others hiring workers so there will always be a few workers who lose their jobs and need to find new ones. Sounds like a pretty good case for complacency doesn’t it? It’s normal. Can’t do anything about it. But of course even in this case we’re still talking about a great deal of potential economic distress. In my limited personal experience people who voluntarily leave jobs typically have new jobs lined up. They don’t just quit, join the ranks of the unemployed, and hope they find something else. So I suppose we must be talking mostly about people who lose their jobs for reasons outside their control. Now of course if they have sufficient resources to tide them over and find another job in short order I suppose no great harm. But if these two conditions don’t hold we’re talking about what could well be a very serious situation indeed. So in what proportion of cases at frictional levels of unemployment do these conditions hold? What portion of the unemployment rate we as a society accept as a bulwark against inflation corresponds to this relatively low impact ever changing pool of temporarily unemployed? I don’t know. I suppose everyone can’t be in that boat can they? And of course if you know me at all you’ll know it’s the other people I’m concerned about.
Basically what seems to be going on to me is that we as a society are willing to sacrifice some unknown number of unfortunate saps to severe economic suffering through either an absence of funds to tide themselves over until they find a job or possibly because they experience unusual difficulty finding a job for the sake of everyone else not having inflation. Now that’s what liberals call a distributive issue. I’m not sure but I think conservatives think no such thing exists or if it does we don’t have to think about it because everything in that area has already been decided the best way possible by the free market. Doesn’t seem entirely fair does it? Some young guy taking the fall so the rest of us can be comfortable? And I’m not talking about the Asian porn star but just any young guy or really gal. Seems to me a pretty good reason to suppose we as a society have a shared burden to take the necessary steps to ensure the conditions that make unemployment not such a big deal really hold for everyone involved before we start taking steps to slow the economy, which is to say making sure unemployed people have the resources to see them through their period of unemployment so it’s not a big deal and taking steps to ensure the period of unemployment accruing to any given worker is as short as possible. Interestingly these are just the sorts of activities conservatives in this country decry as socialism because it requires them to pay taxes to help people other than themselves. They would much rather get the benefit in terms of lower inflation but have someone else pay the cost and by someone else I mean in this instance the poor sap we sacrifice for the sake of the nation. Ironically these deadbeat conservatives often turn around and try to cast themselves as the great champions of personal responsibility even castigating unemployed people for their plight.
And this gets to what I think is even a bigger issue, which is the way conservatives set up these systems then get it twisted or pretend to anyway and try to present their vicious dog eat dog view of the world as simply “the way the world really works.” One hears that sort of thing quite often in the context of disparities in economic power, which in our version of democracy anyway translates more or less directly into disparities in political power. I’m sure you’ve heard this stuff before. Some people have always gotten the short end of the stick. Ancient Rome had its peons. Medieval Europe had its peasantry. Contemporary America has its impoverished politically impotent underclass. There’s nothing we can do about. It’s just the way it is. The reality of course is that’s the way things really are because that’s the way we’ve set them up. Set them up differently and they will work differently. Right now our system is predicated on indifference to the suffering of some of our compatriots. That’s the reality. It’s built right into our system. Winners and losers. Haves and have nots. Some people living like oriental potentates in golden palaces; some people dying under the bridge or in the woods behind the local convenience store. But let’s not fool ourselves. That’s not the universe you hear talking to you. That’s not Mother Nature letting you in on one of her little laws. No, that’s the system we’ve set up and we or conservatives anyway work carefully to maintain. We can change it any time we like. Might come at a cost. Might have to try some things and make some mistakes before we get it right. But that’s true of just about anything we humans have ever done isn’t it? Why should this one case be any different?
