Saturday, January 8, 2011

It's My Mom's Fault!

First, my apologies to my reader(s) for neglecting the blog.  I was doing family related activities, then I got sick.  Now, back to business.

I fucking knew it.  I always had my suspicions, but now I know it to be true.  The whole global economic nightmare in which we live was my mother's fault.  When she was "grading papers", she was actually working on a union-socialist plot to crash the economy so that Cooper or Skylar or whatever trendy WASP named e mid '90s baby turning 16 in 2010 could only get the 325, not the 335xi he really wanted for his birthday.  And, you know what?  Screw her.  And worse, screw that ethnic looking guy who does some sort of labor I neither would nor could do because he gets to retire someday and he takes breaks.  Breaks!  Do you believe that shit?  Travis Fast links to (teh awesome) Naked Capitalism for this gem from the NYT:

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy.
In France, they riot when cuts to pensions are threatened.  Here, we blame working people.  Unbelievable.  Now, we could leave it at that, but when you dig a little deeper, it is clear that we are paying for our assholery.

If there's one thing that's basically indisputable, it's that austerity would create more unemployment and lower wages.  As more public sector jobs disappear without the private sector picking up the slack, aggregate demand contracts further leading to slower growth leading to more job cuts... rinse, repeat.  And this effect ties in with a recently oft discussed topic: Okun's Law.  The crux here is that there is a relationship between GDP growth and unemployment and the kicker is that there is less than a one to one trade off once growth is positive.  In other words, it takes more than 1% GDP growth to erase 1% unemployment.  So, when you cut government expenditures (including those to pay employees, such as those evil public school teachers), you are cutting a significant component to GDP.  And, since the private sector is not filling that gap, austerity directly creates unemployment.  So, let's blame the unions.  Let's attack public sector employees.  And let's stock safes with canned food and cash.  But let's never tax financial transactions or invest in infrastructure and education: we don't want to end up like... France.

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