JEFF W. writes:
Your job market thread has been another very good discussion. I liked the comments about LinkedIn. I have always hated it and the people who use it.
I would like to describe my theory of why the American job market has been destroyed. On the surface, it makes no sense. The decline is extremely unpopular with voters, of course; one would think that politicians would always favor a healthy job market. A crippled job market has also damaged the government’s tax base; everyone in government has an interest in a healthy job market, and one would think that a worsening one would alarm them. The American consumer has been the source of sales revenues for businesses throughout the world; business interests thus should also very much want a healthy job market that puts money in consumers’ pockets. Why have the people, their elected leaders, government interests and business interests all been thwarted in their desire for a healthy job market? That question puzzled me for years.
My answer is that politics in this country are controlled by people I call “the money printers.” They obtain their wealth through money printing, and they are enormously wealthy and politically influential because they can print money and take it for themselves. Both the big banks and the Federal government are today largely funded by money printing. (Modern money consists mainly of electronic digits, of course, and is created when new debts are created. It is not literally printed into existence. But I use the term “money printers” for simplicity’s sake.)
People who make their living by money printing do not have the same concerns as people who operate businesses. They do not really have customers. They do not have to sell things. The one thing they have to do in order to stay on the money-printing gravy train, however, is to control inflation. Enough inflation will shut down their money printing. In the late 1970′s they did, in fact, have to stop their money printing temporarily when inflation got out of control. Interest rates as high as 18 percent had to be imposed in order to suppress inflation. The rapid growth in the money supply temporarily came to a halt.
How do today’s money printers suppress inflation? In more primitive times, rationing and government price fixing were the preferred methods. Today’s methods are both more subtle and effective. First they use various techniques to suppress wages. In the 1970′s, in one of their first major wage-suppressing moves, they aggressively pushed women into the workforce. Women are great for wage suppression. In any occupational field that women take over, wages go down and they stay down. Open borders immigration has also been used to suppress wages. Relocating American manufacturing to Asia has also been used. All these three methods of wage suppression have been forcefully and energetically imposed on Americans by the Federal government.
An anti-business government agenda also has the effect of suppressing wages. When businesses go under due to government actions, unemployment increases. Increased unemployment also suppresses wages.
In order to suppress energy prices, a whole “green” agenda has also been imposed on Americans. In an effort to suppress food prices, the Monsanto Corporation gets taxpayer funds to help them market their genetically modified seeds worldwide. Any health concerns about genetically modified foods have likewise been suppressed.
White males historically stood up to employers and successfully demanded their fair share in wages. Banding together formally or informally, they issued credible threats to management which resulted in wage increases. But that kind of employee action no longer occurs. The Federal government has forcefully broken the power of white male workers.
The United States is an increasingly inhospitable country for wage earners. Not only do American workers earn low wages, but, as readers have pointed out, working conditions have also deteriorated. But it is a great place to live if you are a money printer or if the money printers pay your salary. The money printers have learned how to print trillions without causing inflation. But the actions they have taken to suppress inflation are coming close to destroying this nation.
—- Comments —-
I disagree there is a conspiracy to suppress inflation. The Fed would have to be part of the conspiracy. The Fed’s ability to print money dwarfs all the other groups’ abilities put together. The Fed does seek to avoid inflation; that is part of its job. And it has been highly successful since Reagan. There is no debate about whether the Fed is doing enough to spur the economy by lowering interest rates. For crying out loud, how can the Fed be part of a conspiracy to suppress inflation when it is doing all that it can to spur growth by keeping interest rates down at grotesque levels?
We can debate whether the Fed is doing enough in other areas to spur the economy. But the Fed will not hesitate to print money should deflation raise its ugly head; again, that is part of the Fed’s job.
The groups mentioned have unsophisticated narrow agendas of their own that might ultimately result in the Fed printing money. But the groups’ members don’t even know what the Fed does. They have no interest in capitalism.
White males standing up to employers means unionism, which means thuggery. Unions are one of the primary reasons the Fed might have to break out its printing press. Unions are anti-competitive and prone to largess, practices that ultimately depress an economy. Unions mean communism historically. Now there are good things that unions can accomplish, but power has corrupted them.