Posted by: CS | December 11, 2012

Restoring Full Employment in Europe and America

In the discussion of another post, it has been argued that the cause of the Second Great Depression has nothing to do with mass export of jobs to the Third World but can be attributed solely to excessive public sector debt.

This is the kind of meaningless thought that the media and the liberal-left and pseudoconservative blogs seek to impose upon the public so that people fail to grasp how they are being screwed by the plutocratic elite.

“Of course” says our commentator, “I value public services as much as anyone else …”

Well I sure don’t.

I don’t want the goddam government picking my pocket and the deciding how much of the cash it has taken from me it is prepared to spend on my healthcare, my kids education whatever.

But increasing public sector debt does not cause a depression. When public sector debt is incurred, it increases aggregate demand, even if that increased demand is due solely to spending by unproductive bureaucrats.

That is why the Keynesian solution to recession or depression is to increase the public sector deficit. And in times past, when national economies were more or less self-contained, that worked. And it worked because increased public spending directly and indirectly increased demand for domestically produced goods and services, which created a demand for increased labor and thus brought down unemployment. Insofar as it increased productive labor, not futile bureaucracy, the cost of the stimulus was recovered through an increase in the output of useful goods and services.

How powerless Americans have been entrapped in forced
labor and poverty. Read more.

But in today’s era of globalization, increased deficits in the Western economies increase aggregate demand for cheap goods and services from the Third World, thus having little effect on domestic employment. The net result is an increase in debt service costs which become a drag on the economy when the rate of increase in the debt falls below the debt service costs.

Western governments reacted to the financial crisis by pumping up government deficits. With little to show for their stupidity, governments have now panicked about the unsustainability of mounting debt and so have opted for austerity. But obviously cutting debt cuts aggregate demand and so worsens the depression.

What the damn fools in government need to do is restore full employment and that cannot be done while wages in the West have a legal minimum ten to twenty times Third World sweatshop wages against which the least competent unemployed Western workers must compete.

So there are only two means to restore full employment in the West:

  1. Tariffs to exclude cheap labor intensive imports from the Third World,
  2. Wage subsidies that enable Western workers and firms to compete with China and the rest of the developing world.

This is a choice that globalist liberals, and other mouthpieces of the plutocratic elite, are incapable of confronting. Hence the flim-flam about excessive public sector debt, etc.

Then there’s immigration. When you’ve millions of excess workers, stop importing more from the Third World. But that’s another obvious reality that a liberal globalist will never take on board.

The fact that these three options are never considered suggests that impoverishing the Western working and middle-class is, in fact, part of the globalist strategy and that we will not see a resumption of mass prosperity in the West for decades, and perhaps not ever. For what is the difference between working in competition with sweatshop labor employed for pennies an hour and outright slavery.

I guess one difference is that slaves don’t have to worry about paying rent or finding the wherewithal to buy food: the provision of healthful board and lodging being a necessary part of an efficient slave economy.

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