How to Unf★ck Unemployment
Channel: New Economic Thinking
Date: 2022-08-17

Dean Baker explains how the employment rate in the economy is a matter of the government's fiscal and monetary policy. Baker contrasts the macroeconomic insights of John Maynard Keynes vs. the more recent views of Milton Friedman when it comes to government spending, unemployment, and inflation. Baker goes on analyze the Federal Reserve's role with particular attention to the decision of recent board chairs (Volker, Greenspan, Bernanke, Yellen, and Powell) on setting interest rates (federal funds rate) and the policy goals they have targeted.   

Baker explains how fiscal and monetary policy has lately focused more on limiting budget deficits and fighting inflation, rather than maintaining high levels of employment. Abandonment of post-war Keynesian full employment policy, and embrace of the Monetarist NAIRU fiction since 1980, has allowed the US government (and the Federal Reserve in particular) to engineer recessions and tolerate excessively high levels of unemployment.

What's the fix? Dean proposes to restore full employment as a macroeconomic policy goal and ensure that workers at the middle and bottom of the wage ladder have the bargaining power to secure wage gains. The Federal Reserves should be focused on maintaining full employment, rather than being obsessed with inflation and prematurely raising rates to the detriment of employment and labor markets.

Learn more at http://unf-ckamerica.com

☆ How to Unf★ck America ☆

This series is all about solutions.

Over the last four decades, the US economy has done quite well for the top 1%, but it has been stagnant for most Americans. This was not an accident, nor the natural workings of the market and certainly not an inevitability. US policies have been deliberately structured since 1980 to redistribute income upwards. In other words, the system has been rigged.

Dean Baker shows us how public policy can be deployed to #UnfckAmerica. Over six episodes, Baker illustrates how even minor changes in public policy can help change our trajectory dramatically. It just takes the political will to recognize that the current situation is not insurmountable, and that change is achievable.

Credits: Dean Baker, Matthew Kulvicki, Nick Alpha, Gonçalo Fonseca, Kurt Semm