Chinese economist says that Obama can abolish unemployment

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Obama can become the first president to abolish unemployment

Effectively, Henry Liu says this can be done by taking "bailout" money that they plan to give to the financial sector and spend it instead as stimulus.

Last edited by xenon13 on 22 Feb 2010, 10:30 pm, edited 1 time in total.

Yeah.... that's impossible to do.

It depends what "impossible" means. If it means that it is impossible in terms of it can't be done economically, that's not so. If it means that the powers that be are so powerful and so entrenched and so much wanting lots of unemployed and cheap labour that they will not allow such policies to be pursued, then I suppose one can say that it is impossible.

Under the American monetary system, this is definitely possible. The political situation however is not favourable, and the disinformation out there is part of that. The reason is that they want unemployment, they want wages down, they want poverty because they think that they'll make more money for themselves and become feudal lords, and that's what they want.

Impossible:
1. not possible; unable to be, exist, happen, etc.
2. unable to be done, performed, effected, etc.: an impossible assignment.

To eliminate unemployment, you would have to eliminate all types of unemployment.

Eliminate frictional unemployment: get someone a new job the instant they quit their old one.
Eliminate structural unemployment: make sure there are no barriers, such as the job being in a different location or requiring different skills, to accepting the new job.
Eliminate technological unemployment: ensure that no new technological advances can do a certain job better than a human can.
Eliminate classical unemployment (the kind you're aware of): ensure that demand for a job opening never exceeds the supply for that opening.

Care to explain how those are anything but impossible?

OK... I was afraid that this might have been the interpretation.

That's the headline of the article. What it means is that after these policies are implemented there would be jobs available to everyone should they have the means to do these jobs and that they would not be slave labour jobs.

Unfortunately, the idea of trying to have full employment is considered to be unrealistic and something from the past or is a Communist plot or something. It is possible for governments to make this a priority instead of making controlling inflation or wages or the deficit to be the priority.

This really doesn't strike me as a good idea, but rather the opposite. Providing jobs that are enticing enough to abolish unemployment completely are likely to have horrible crowding out effects in the private sector. Why? Because whatever program that is done is going to have to worry about attracting people out of the private sector, some of whom are probably entirely willing to take an Obama job especially given that the entire premise is "guaranteed employment with guaranteed pay". I mean, if I can get a guaranteed job with guaranteed pay, it is pretty tempting to only sign up for that kind of labor, and then once I get the job, just slack my time away. Even if I couldn't do that, the temptation is still there, simply because the job will still likely be relatively stable with limited to no involuntary employment and provide easy work. Because of that, I think that the numbers employed by the program are going to be dramatically understated.

To go further, planning all of the projects these people are going to do and organizing it all will likely take time and additional money, so the money used cited is also likely severely understated.

Additionally, if unemployment wasn't removed by WW2, when y'know there was a war effort and draft and all of that, then Obama is not going to be able to do it. I mean, that historical comparison right there already invalidates the plan proposed.

As well, I am not sure how well the program will be dismantled. Unless these are all short term plans though, then this proposal could increase the size of government in the longer-term for things that really don't add as much value.

Finally, Obama can't do squat. The US congress has to propose the idea, and they'll never pass it, ever. Even the democrats might worry about it being "too socialistic".

Afraid that I would interpret "abolishing unemployment" as actually abolishing unemployment?

There is a huge difference between creating jobs and abolishing unemployment. Ever heard the saying "You can lead a horse to water, but you can't make him drink"? Even if jobs were made available to everyone, there would still be unemployment. To eliminate it, Obama would have to control people's minds to make them want only the jobs that were currently available. Otherwise demand exceeds supply, and you have unemployment.

Pat2rome's interpretation is valid though. The article says "for President Obama to ... announce that he will be the first president in US history to abolish unemployment in the US economy". This means that either he wants Obama to lie, or he really plans on removing the mentioned kinds of employment, despite the fact that a total war economy has failed to do this(after all, if a total war economy had succeeded then Obama couldn't claim to be first). I think the article is asking for the impossible, as the unemployment under this system will at the hypothetical lowest be equal to that, and likely be a lot more.

That being said, it will likely be very screwy for the labor markets. Obama is proposing a plan that will likely provide jobs better than a lot of private sector jobs(abolishment of risk, likely not to be difficult because they are only makework, high pay, guaranteed acceptance) and there is no doubt in my mind that this will utterly remove lots and lots of jobs from existence.

There is an implied assumption here that the bulk of people are lazy, sloppy, stupid and have no self respect and that anybody working under government management and supervision automatically is an inefficient slacker. That's rank prejudice. Social factors have great effects on work discipline and that has little to do with government.

The bulk of people are lazy, and smart enough to see what a good deal is for them.

The problem is really not government, but rather it is incentives. If the entire idea is to just get people "employed" as the major goal, then there is no reason why people won't take these jobs just to slack. I mean, if they have to fire a *single* worker, then the plan fails for 0 percent unemployment. What this means is that anyone can get away with almost anything but outright crime on their job. If you don't think that won't encourage people to work like crap, then I don't know what more to say.

In any case, my problem has nothing to do with the fact that people will just go bad if a program is run by the government. The real issue is just that perverse incentives are staring me in the face when I think about this.