Monday, January 22, 2018

Dean Baker Goes Openly Anti-Worker

Dean Baker argues today that the recent “uptick” in the economy may not have much to do with Donald Trump, creating a rare moment in which I actually agree with him, and goes on to say that it may actually be due to “the continuation of the Obama-Yellen recovery,” which puts us in separate universes again. The rest of his piece today is a virulent rant against the interests of the working class.

He does agree with Summers that when another recession happens “the Fed will again have to rely on unorthodox monetary policy,” and goes on to say that, “This is why many of us have argued for an inflation target higher than 2.0 percent.” Of course, so that the working class can suffer as badly during economic boom times as they do during a recession. Brilliant.

He then claims it is “also worth bringing in the story of robots taking all our jobs,” saying that it is “a story of a massive uptick in productivity growth,” which is awesome because he loves productivity growth. It is, after all, another opportunity to worship an economic theory which in modern times punishes the working class.

Higher productivity means that more product is produced by less work, so higher productivity means fewer workers. Even if, as Dean Baker claims, higher productivity inevitably resulted in higher wages, which it does not, then higher wages for fewer workers is not really a good outcome for the working class.

But higher wages for fewer workers is not a good outcome for business, either, because it requires an investment which doesn’t cut labor costs much, if at all, so business sees to it that higher productivity means unchanged wages for fewer workers, which really sucks for workers.

Dean Baker even admits that his claim of higher productivity is not actually what causes higher wages when he says that, “It's possible that we won't see the same wage growth this time due to weaker unions, the decision to expose less-educated workers to competition with low paid workers in the developing world, and more protectionism in the form of longer and stronger patent and copyright protection.”

The patent and copyright thing is nonsense, of course. It’s a pet peeve of his which he injects into everything, and it’s not about the working class at all. The abuse of patents and copyrights is about inflating prices to increase corporate profits and has nothing whatever to do with working class wages.

The other two items, weaker unions and offshored jobs, have a lot to do with wage growth not occurring as a result of productivity growth, so of course Dean Baker would follow that statement by agitating for stronger unions and for restoring manufacturing jobs to this country, right?

He does nothing of the sort. His support for the working class evaporates in a puff of smoke when he argues that to make up for wages not rising the government should, “make up the lost demand with larger budget deficits.” You get that? He’s a member of the “as long as money is being spent, it doesn’t matter who’s spending it” school of economics. He only cares about cash flow and, like the rest of the Washington elite, is unconcerned about the spending power of the working class of this nation.

Since workers are not being paid well and have no money to spend, he claims, the government should spend money instead, using borrowed money, to keep the economy flowing. The working class won’t be okay, but the economy will be fine. The spending level will be high even though the working class is flat on its ass, because the government will be spending money that it borrowed from…?

Sort of what we have today, actually, because last fiscal year, during what he claims to be economic good times, our government spent $665.8 billion more than it took in. He does not say what number in the way of a “larger deficit” he would consider reasonable.

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