What causes unemployment?

[Tonitrus]

I work from 0545 to 1700. No overtime.
The Army sucks.

I work from 0755 to 1500. (with a 1hr 20 minute lunch)

And maybe an hour or two of homework. 

When do you do PT?

At whatever time I choose. 

[DGuller]

What is Air Force PT like?  Education on proper posture while sitting?

[HisMajestyBOB]

I have a degree from a decent state school, 3.49 GPA, Honors Program, 6 months studying abroad, internship experience, 2 years working as an English teacher abroad, and conversational skills in German and Korean. I've applied to government jobs, contractor jobs, admin assistant, secretarial, and landscaping jobs, and gotten none of them. Tell me what job I should apply for, since I apparently feel "entitled" to those jobs and don't deserve them. And I'm not alone in my position.

Stop whining!  Work harder!  THE SOD MUST FLOW.

And while I'm ranting and raving, I want to register my absolute disgust at the current Republican party. Their entire response to this mess has been to blame the victims (unemployed) and push only for tax cuts for the wealthiest and for corporations. Fuck them, and double-fuck Rep. Cantor, who tried to prevent FEMA disaster relief even for the counties in his district suffering from flooding.

Well, at least he isn't being a hypocrite.

Not anymore: he decried Occupy Wall Street as "dangerous" and "divisive" while supporting the Tea Party protests.

[garbon]

Not anymore: he decried Occupy Wall Street as "dangerous" and "divisive" while supporting the Tea Party protests.

I could see it. The Wall Streeters with their camping out and bathing in public restrooms are causing a health hazard.

[Ideologue]

What is Air Force PT like?  Education on proper posture while sitting?

"Not be 27 years of age, hope for the best."

[The Minsky Moment]

To vastly oversimplify, Keynesians would say unemployment is caused by insufficient demand, whereas a Monetarist or member of the Austrian school would say it's caused by the slowness with which the supply of and demand for labor react to changes in conditions.

The problem that neo-classical theorists (which monetarists fall under along with "neo-Keynesians" and much of mainstream academic economics) have is that they begin with a theory that presumes full employment.  The Austrians don't really have this precise problem, because they utilize a disequilibrium model that takes into account cyclical activity.  But the neo-classicals don't have even this so they have come up with various explanatory kludges like cartels, unions, "sticky wages," unintended effects of regulations, etc.  Some of these things may indeed have some effect on employment, but the bigger problem is that the underlying premise that capitalistic economies have a natural tendency to full employment equilibrium is a fantasy based on unreal assumptions that would only make sense for barter economy populated entirely by automotons - or as one distinguished Nobel laureate expressed it - "a mechanical artificial world populated by . . . interacting robots."

Mainstream academic economics has evolved in such a way because operating with such theories facilitates generating complex forecasting models and interesting research programs, and that helps economists get jobs in investment banks and government, and make tenure at universities.  And for certain purposes and certain periods, these kinds of models have functional uses, which is why the underlying theory can persist despite its obvious shortcomings.  But in terms of answering big questions like what causes unemployment, or answering the Queen's question about crises, the neo-classical theory has little useful to say, and indeed, doesn't really even really address the question.

[Admiral Yi]

I would be tempted to respond if I knew what the hell kludge meant.

[dps]

I would be tempted to respond if I knew what the hell kludge meant.

A fudge factor, essentially.

[Admiral Yi]

The difficult question for those arguing that labor markets never clear in the absence of Keynesian pump priming is how to explain those periods of full employment prior to the introduction of fiscal policy.

The fact is labor markets do eventually clear, supply and demand do eventually intersect.  The only real issue is the tradeoff between the costs of unemployment in the short and medium term vs. the costs of adding to the national deficit.

[The Minsky Moment]

The difficult question for those arguing that labor markets never clear in the absence of Keynesian pump priming

It's not a difficult question because that isn't the theory.  The theory is that there is no natural tendency to equilibrium; that on the contrary there is a natural tendency to cyclicality and that it can be possible for economies to get stuck for significant periods of time in the stagnation phase.  But Keynes himself admitted that during the stagnation phase there are internal dynamics that eventually will push the economy back into expansion even under conditions of laissez faire; the question is how long one must wait for those forces to exert themselves, and how much economic potential is lost through the wait.

The fact is labor markets do eventually clear, supply and demand do eventually intersect. 

Individual markets for labor may clear in that sense; but THE "Labor Market" in the economy-wide sense never really does because it is just a theoretical construct, not a reality.  There is no agora where all the nations workers can come together bid out their services (and be bid upon) by all employers.  One can only speak of periods of relative full employment and periods of relative unemployment.

The only real issue is the tradeoff between the costs of unemployment in the short and medium term vs. the costs of adding to the national deficit.

That tradeoff may be illusory because if economic activity (employment) is allowed to stagnate, then the national deficit tends to increase even as spending is held steady or even contracted.  Similarly, to the extent government spending successfully offsets economic contraction and returns the economy to a growth path the long-term debt position of the government may be improved, at least as measured in % of GDP terms.

In any case, one may legitimately question the efficacy of particular Keynesian measures without putting into question the overall validity of the critique and analysis of the underlying causes of unemployment.

[Admiral Yi]

No disagreement with anything there Joan.  Though I would like to highlight the heavy use of qualifiers in the last paragraph.

Now if only Guller and his friends read your post.

[dps]

Guller has friends?

[Razgovory]

I was diagnosed with a fear of Agoras.  So I've stayed clear of Greece ever since.

[DGuller]

Guller has friends?

Fuck you too. 

[Razgovory]

I like Dguller.  I'd even invite him to my birthday party.  If I had one, and he promised lavish gifts.