Economics

Roubini: Jobs Are Dead, Long Live Jobs

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Econodorks bring tha laaaa-deees!

Nouriel Roubini, the economist Gawker calls a "vampire who feeds on the hopes and dreams of the unemployed," makes a leap of logic so impossible it can't be seen by the naked eye.

In a New York Daily News column, Roubini rehashes bits that will now be familiar to regular roubinoids: The unemployment picture is going to get worse and worse; the official rate of unemployment could remain above 11 percent for years; the monthly job loss rate is still higher than it was in the post-dotcom era (when doctors still treated flu patients with bloodletting). A typically chilling vision:

The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.

Sounds like a situation society can't really solve and should instead be looking to manage, right? Wrong. Roubini has a solution:

There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

If the job losses are as permanent as Roubini says, and if 25 percent of American jobs would be more economically done overseas, that's a structural problem that will not be turned around by spending on "labor-intensive, shovel-ready infrastructure projects." (How can anyody still type phrases like that without puking?) A solution would be something that makes it more cost-effective to employ people in America, by allowing wages to fall and productivity to increase. The kind of spending Roubini favors will at best minimize some pain for some dislocated workers in the short term.

Now how much would you spend? But wait! As has been very, very, very heavily documented, Stimulus I (or Stimulus IV if you're using my counting system) has not in fact been minimizing much pain for many, or any, dislocated workers. (My own contribution to this research—a gander at how much job saving and creating the stimulus has done in Hollywood—will be appearing in the LA Weekly one of these days.) Many commenters at the Snooze beat up Roubini for this very point: When you're an internationally fêted economist, the urge to do something—something dammit!—for the Fabulous Little People is no doubt very strong; but let's see what we bought with the first trillion before we spend the second.

NEXT: Barack Obama, Federalist?

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  1. Stimulus I… has not in fact been minimizing much pain for many, or any, dislocated workers.

    OMG, you’re making his point for him. We didn’t spend enough stimulus money (wherever that came from) first time around.

    Look at it this way: when someone is drowning and the water you’re pouring on them isn’t putting the fire out, you don’t stop pouring water. You dump more on. It’s simple economics.

    1. Look at it this way: when someone is drowning and the water you’re pouring on them isn’t putting the fire out, you don’t stop pouring water.

      Or, alternately, if the blood letting isn’t curing the patient, its obviously because you haven’t taken enough. Put away the knife and take out the hatchet.

    2. If we hit that bullseye, the rest of the dominos will fall like a house of cards. Checkmate.

  2. I wouldn’t be half surprised if Cavanaugh’s LA Weekly piece discusses how many jobs could be saved/created for Americans if we simply enforced the immigration laws and reduced the numbers of work permits.

    Oh, wait, I would be surprised. Completely surprised. Everyone knows Cavanaugh isn’t going to mention the hugely obvious flaws in his ideology.

    P.S. In case anyone replies to this, their responses will almost assuredly be ad homs, thereby conceding my points and showing the childish, anti-intellectual nature of libertarians. Dozens of comments here have shown that the phrase “fascist libertarian” isn’t an oxymoron.

    1. LoneWhacko, the unemployment rate is going up because people are losing their jobs. Are there other jobs out there? Tomato picking? Hotel cleaning? Day Labor? Of course, but they are not the kind of jobs that creative, skilled, or semi-skilled people are willing to do.

      Letting more people into the country who are willing to do those jobs means more people spending money on things like housing, food, and luxuries, which drives the economy, not drags on it.

      Of course, the hugely obvious flaw in my ideology is that I ignore the basic fact that natural-born Americans are morally superior to the BrownHoardes, and therefore more deserving of productive livelihoods.

      1. Tomato picking? Hotel cleaning? Day Labor? Of course, but they are not the kind of jobs that creative, skilled, or semi-skilled people are willing to do.

        As Janeane Garafalo famously said:
        “That’s racism,straight up”

        In Libertopia they’ll take those jobs,if they want to eat.

        1. As Janeane Garafalo famously said:
          “That’s racism,straight up”

          And your use of it is just as relevant as hers.

          Employment isn’t a zero-sum game. Some people lose their jobs and shrink down the ladder, others make a lateral move to the same job at another firm, others go back to school to move up, others strike out on their own and try to innovate.

          If the government allows them, that is.

          1. Perhaps class-ism would be a better term for your assertion.Of course in our culture classism is usually called racism so I stand by my comment.

            1. Of course in our culture classism is usually called racism so I stand by my comment.

              Someone has to bring the homely girl to the dance, I applaud your charity.

              [arbitrary social distinction]ism is a charge that people throw around cavalierly when they don’t have a real argument to make.

              1. Of course, the hugely obvious flaw in my ideology is that I ignore the basic fact that natural-born Americans are morally superior to the BrownHoardes, and therefore more deserving of productive livelihoods.

                You are assuming those ” natural-born Americans” are so superior they won’t stoop to manual labor.Just pass another unemployment extension,right?

                1. I did not say either of those things. Indeed, if you read my post carefully, you will see that I said that some people do take a step down the economic ladder, by which I meant taking jobs beneath what they had before.

                  But programmers who get laid off aren’t going to rush out to fill the busser opening at Denny’s until they have exhausted their other options.

                  In the meantime, that job is an improvement to someone whose only other option is subsistence farming in their native country.

        2. “Where the sole employer is the State, opposition means death by slow starvation”

          In sovietopia they’ll obey if the want to eat.

      2. LoneWhacko, the unemployment rate is going up because people are losing their jobs.

        That made me laugh.

      3. Hugh Akston: thanks for showing yet again just how little use libruhtarians have for patriotism. It’s not a racial matter to put the interests of your fellow citizens ahead of the interests of foreign citizens, it’s a simple matter of patriotism. Libruhtarians are unclear on that concept.

        And, you need to get out more. There are plenty of Americans doing crap jobs, and if someone is in bad shape they can do a crap job until the economy improves. That will also save money on unemployment and have a host of other benefits.

        Consider your citizenship options.

        LoneWhacko, the unemployment rate is going up because people are losing their jobs. Are there other jobs out there? Tomato picking? Hotel cleaning? Day Labor? Of course, but they are not the kind of jobs that creative, skilled, or semi-skilled people are willing to do.

        Letting more people into the country who are willing to do those jobs means more people spending money on things like housing, food, and luxuries, which drives the economy, not drags on it.

        Of course, the hugely obvious flaw in my ideology is that I ignore the basic fact that natural-born Americans are morally superior to the BrownHoardes, and therefore more deserving of productive livelihoods.

        1. I’m perfectly clear on the concept of patriotism:

          Hugh Akston|11.4.09 @ 9:56AM|#

          “‘patriotism’ is a word that should send shivers down anyone’s spine. Its sole function is as a normative value to screen out people on the right side of an issue from people on the wrong side of an issue, regardless of the relative merits.”

          The fact that two people live in the same country doesn’t give them some kind of exclusive moral status.

          People working crap jobs are, by and large, not the ones in danger of unemployment. And I’ve already said above that there are plenty of options for people who lose jobs in a rough economy, including crap work.

          1. It would be unfair to say that all libertarians are like Akston, in that they would willingly put the interests of foreign citizens ahead of the interests of their fellow citizens and in that they just don’t “grok” the whole citizenship thing.

            Not all libertarians are like that. I know that somewhere out there – given the hundreds of thousands of libertarians around the world – there must be one who supports their own citizens ahead of the citizens of foreign countries.

            I mean, there’s got to be one like that somewhere, right?

            1. There must be one who believes that humans who were born on the east bank are inherently superior to humans who were born on the west bank..right?

              Because west bank humans are really just a little less human, don’t you know.

            2. No, LoneWacko, sorry. We’re all that way. Whatever country we belong to, we put the interests of foreign citizens before our own. Its in the handbook and everything.

              1. it appears that lonewacko has a hard time with the concept that protectionism is a bad thing

      4. You know, it’s so obvious you’d think people wouldn’t do it. Nevertheless, people are continually conflating immigration with illegal immigration and pretending they are having the same discussion. I happen to think we should have open borders as we once had where people came and went and worked freely, but my understanding with respect to the illegal immigration hysteria is that it had to do with terrorists and drug cartels moving freely to and from the US. Now, I think it’s utterly stupid to suppose you could stop that if you wanted to, but that was what the hysteria of “immigration” was about in the beginning. For many, many years migrant workers came and went from south of the border and it worked well for everyone involved. Nobody thought “wet backs” were stealing American jobs. Thing is, things are so f***ed up beyond recognition now that there will never be any making sense of it.

  3. Fist, that is why Keynsian economics is so attractive: it cannot be disproven.

    When Congress enacts a Stimulus, and employment keeps falling, they say they didn’t do it hard enough.

    When Congress passes a Stimulus and the employment situation either levels off or improves, they say the surge Stimulus is working, and just imagine the horrors if we hadn’t passed it.

    1. Libertarianisn cannot be disproven, either. No matter how badly the markets fail, you can always blame the nearest government program.

      Indeed, it is hard to read more than ten posts on any of these threads without a libertarian employing this logic.

      1. “Proving” a political philosophy sounds, uhm, difficult.

        The superiority of the free market can be shown empirically by looking at the prosperity of societies that have rejected markets. (Cuba? USSR? China 30 yrs ago vs. today?)

        It can be shown theoretically (pretty effectively in my opinion)by looking at the works of free market economists like Hayek & von Mises.

        And, morally, I find the absence of the initiation of force pretty appealing. You obviously don’t.

        1. Chad likes all government, all the time, in every hole and no fact will ever change that.

      2. Markets don’t fail. They might not do what you want or what’s best for people, but look hard enough and the reasons for why they behaved as they did will be found.

        If you mean ‘when markets provide non-optimal outcomes,’ yes, we libertarians like to point to government interventions as the cause many times. It’s typically because the/a government has provided some (many times unintended) incentives that cause the market to behave the way it does.

    2. I can’t tell you how many times I’ve enacted a stimulus, only to be told I’m not doing it hard enough. WIMMEN AMIRITE

  4. Not familiar (thankfully) with Roubini, but he sounds only slightly more hysterical than Krugman. Do they play MMO economics games together on their Xboxes?

    1. Not familiar (thankfully) with Roubini

      Read much? What Miley Cyrus is to jailbait pop singers Nouriel Roubini is to household name economists.

      1. I could see a person not being familiar with Roudini. He’s known, but not as much as a media fixture as people like Summers and Kruginator.

        1. I could see a person not being familiar with Roudini Cyrus. She’s known, but not as much as a media fixture as people like Summers Britney and Kruginatorand Christina

          1. Nice try, but neither of them are “jailbait.”

            1. Not NOW,but to someone who hasn’t paid attention to jailbait singers since they WERE jailbait might also have no idea who Roubini is.

              For at least the past year read an econ blog,turn on the TV news,read a newspaper article about the economy it is all Roubini all the time.Krugman is a columnist for the NYTs who still doesn’t like Bush and Summers is some sexist bastard former-President of an Ivy league school who advises Obama.
              Roubini is the Star.

              1. Reigning Expert star clusters tend to distribute roles in the same way Boy Bands do: Geithner is the Cute One, Summers is the Deep One, Krugman is the Funny One, Roubini is the Bad Boy.

                1. two laughs one story.

                2. You misspelled “fetid”.

                  1. You’re right; I forgot the circumflex. Double dumbass on me, and I love diacriticals.

        2. From Google:

          Results 1 – 10 of about 6,060,000 for krugman economist.

          Results 1 – 10 of about 2,590,000 for roubini economist.

          Results 1 – 10 of about 914,000 for summers economist.

          Roubini seems pretty well known as an economist.

          1. Your methods of proving exposure of a single individual to a population by using the hits on a google search would make any economist, or even an undergrad economics major weep.

            I’d continue to dispute your somewhat absurd point, but lets face it. You know who Roubini is, posses made google skills and are clearly the superior intellect. I differ to you for all further comments dealing with the relative exposure of economists and their recognition by the public.

            1. differ =/= defer

              duh, major Fail

          2. Results 1 – 10 of about 4,970,000 for schiff economist

            Peter Schiff exceeds Roubini…so what is your point again?

      2. Utter nonsense. He’s well known as of late but nowhere near the top of the list of household name economists for most people. Come on, read much?

    2. Roubini is the guy that the powers that be think predicted the “recession”, eventhough he pretty much talked about the real estate bubble, not the overall economy. And he said it in 2006 when everyone and their mother knew the real estate bubble was gonna pop, so he’s hardly a visionary (hell the bubble had already popped in SD at that point, and SD is the bellweather RE market).

      The smart folks give the credit of forecasting to Peter Schiff who was the only voice saying stop in 2003 when the whole mania was just starting.

  5. “labor-intensive, shovel-ready infrastructure projects.”

    I could have typed it myself but I just copied it.

    Infrastructure projects have the potential benefit of providing lasting value that increases wealth, e.g., Hoover Dam. But good luck even trying to widen a freeway here in California so people can get to work.

    1. Dams probably aren’t the best example of infrastructure success stories. Many are in pretty crappy shape at this point, no one has plans to inspect them much less fix them, and many sit above populated areas.

      Not exactly successful infrastructure.

      Freeways are easy. You just use eminent domain and take the land.

    2. Environmental impact reports are exactly why the Stimulus was a fraud from day one. There were no “shovel-ready” projects that were not funded.

  6. Shut the fuck up, Lonewacko, you BBW-admiring prick.

    1. Just because it’s an ad-hom attack doesn’t mean it’s not deserved.

      And lonewacko richly deserves them.

  7. Correct me if I’m wrong but Roubini is in with the Summers and Sachs group or at least a champion of their ideas. I’m not surprised he advocates more government intervention. Pretty soon we will be implementing the ever so successful shock therapy plan.

  8. or Stimulus IV if you’re using my counting system

    Ok if you are going to say stuff like this you are going to have to tell us how it all works.

    What and when are the other 3 stimulus?

    and please don’t use roman numerals…i always get confused with which one is 4 and which one is 6 and after a while it is just crazy garbage:

    XXIVIXXIIIVX?!?!

    1. By my count:

      1. Federal Housing Finance Regulatory Reform Act ($400 billion, signed by President Bush in June 2008).

      2. Emergency Economic Stabilization Act ($700 billion, signed in October 2008).

      3. Federal Reserve conservatorship of Fannie Mae and Freddie Mac (September 2008. Dollar amount unclear — the GSEs have about $6 trillion on their balance sheets).

      None of them were called stimulus, but all were aimed at preventing the economic “meltdown” that would have resulted from a large collapse in value.

      And I want to be on record opposing what I know will be the conclusion of the history textbooks: that after the economy melted down under the laissez-faire policies of the neglectful Bush, the vigorous Obama came in with a robust package of economic incentives that eventually brought about the economic recovery America experienced during the Malia Obama Administration.

      1. This is going to be a hard rewrite unless things start getting better fast.

      2. And I want to be on record opposing what I know will be the conclusion of the history textbooks: that after the economy melted down under the laissez-faire policies of the neglectful Bush, the vigorous Obama came in with a robust package of economic incentives that eventually brought about the economic recovery America experienced during the Malia Obama Administration.

        I am skeptical. How do the text books treat Carter? And if they do treat him well who actually believes what the text books say?

      3. lol.

        Here is a more accurate rewrite: lots of dead people if things don’t turn by 2011 and Obama the retard keeps making the problem worse.

        At a certain point, things just fall apart.

  9. (How can anyody still type phrases like that without puking?)

    Obama’s dick is too thick to barf around, racist.

    1. There’s always the dreaded nose spew.

  10. (How can anyody still type phrases like that without puking?)

    That’s what cut-and-paste is for.

  11. I have a cunning plan: Arm two factions–doesn’t matter which–and start a civil war in the U.S. This would (1) employ the unemployed and (2) provide additional jobs in arms manufacture. In addition, the reconstruction work after the war would further stimulate the economy.

    I’ll call this the War of Northern Stimulation until someone thinks up something better.

    1. We will be using sticks within days. The tinfoil hat gun nuts have bought all the ammo and stored it in the basement next to their MREs.

    2. And it would provide a lot of early retirements and other “mobility enhancements”.

  12. I thought the idea behind deficit spending during a recession (to the extent there is an idea besides buying votes) was that you can pay off the debt when good times return in the future. So if good times are never returning, spending money we don’t have is doubly stupid.

    1. No no NO. The idea behind deficit spending during a recession, is to get ready to spend even more when the good times return.

      One should not increase one’s expenditures too rapidly, when one is not accustomed to it. This is something you have to build up a tolerance for.

    2. The man does not say that good times are never returning. That would be incredibly stupid.

  13. “How can anyody still type phrases like that without puking?”

    Wait a minute. This is coming from a “libertarian” who can stomach reading Ayn Rand and listening to Ron Paul? Fuck!

    1. Ooh, nice non-sequitur/ad hominem hybrid.

      1. Yes, the classic non hominem. Truly the sound of one hand clapping.

  14. One more post about Roubini with no mention of plaster-vagina studded TriBeCa lofts. I’m beginning to regret that $25 I gave ya’ll.

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  16. That guy’s face is shovel-ready.

    1. Although it does look like he has his own stimulus program going on …

  17. I’d been following Roubini’s writing with some interest the last couple years.

    I just lost interest.

  18. One more post about Roubini with no mention of plaster-vagina studded TriBeCa lofts. I’m beginning to regret that $25 I gave ya’ll.

  19. What the fuck happened to the witticism attached to my last comment?

    Fucking squirrels.

  20. Reason is showing a picture of Roubini with women so people don’t take him seriously. I’d say that unreasonable.

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