Jim Devine wrote: (responding to my statement: -- > >>Result: the very basis on which the system was "held together" between 1945 > and,say, 1989 is now GONE. The sluggishness of the recovery and the need to > maintain unemployment so much higher than in the past and the persistence of > the INCREASE in inequality (not just the persistence of inequality) all are > part of the long run process.<< > > I agreed with almost everything in Mike's post. But we have to face > the fact that unemployment is currently lower than in the past (though > it's rising), at least in the US. Of course, the validity of my > statement depends on which "past" we're comparing the present to. > But both official U and U augmented by the number of discouraged > workers and involuntary part-timers seem to be lower now than during > much of the 1980s and early 1990s. I would argue that the alleged "success" of the 1980s (pre 1988) of the US economy was precisely because for five full years of "recovery" the unemployment rate remained above 6% (and in fact didn't reach 7% till 1987). Then, we had two "good years" of 5.3% unemployment before the recession came in 1990. Faced with the danger of unemployment getting down to 5.3% again (it reached 5.4% in december 1994) --- the FED began to abort the recovery (interesting parallel to a similar tightening of monetary policy in 1984! -- see GReider for details) --- In other words, today it appears that the "system managers" are not willing to chance a couple of years like 1988 and 1989 where unemployment was "allowed" to remain so "dangerously low." I am trying to argue that the 1980s represented a relatively unsuccessful recovery (by capitalists' own standards and recent historical parallels) --- If we use absolute levels of unemployment as the standard, then the post 1991 recovery looks "better" than the post 1982 recovery --- but remember, the unemployment rate of 9.7% in 1982 and only 6.7% in 1991. The unemployment rate FELL steadily (if slowly) from 1983 to 1990 while it actually increased through 1992 (peaking at 7.7% in June) before beginning its slow fall (which didn't reach 5.4% until Dec 1994). Recently, when sketching the > Phillips curve for my students, I discovered that at least for the > last few years, the "unemployment-inflation trade-off" has improved > (meaning less stagflation), using the official unemployment rate. > > Now I am not trying to praise Clinton or Greenspan or claim that > we're having a "soft landing." Au contraire. I think what's > happening is that the same amount of (official) unemployment > has a larger impact on worker bargaining power than it did > in the 1970s. Unemployment insurance benefits are down, > as is trade-union strength. Etc. So 5.8% unemployment now > looks as bad as (say) 7% fifteen years ago. Has the Sam Bowles/Julie Schor time series of the "cost of losing your job" been updated through the present. That's a useful index, IMHO, for what Jim seems to be concluding... > > It's my hypothesis that something similar happened during > the late 1920s. Now there's a cheering parallel. > Agreed -- Mike Meeropol Economics Department Cultures Past and Present Program Western New England College Springfield, Massachusetts "Don't blame us, we voted for George McGovern!" Unrepentent Leftist!! [EMAIL PROTECTED] [if at bitnet node: in%"[EMAIL PROTECTED]" but that's fading fast!]
