JWM

That is what it’s about. The position on the other side, the CEA chairs and various other people who’ve been the most vocal critics of these estimates, has been implicitly or explicitly: “This is as good as we can do.”

We’re not talking about core macroeconomic policy issues because they’re not a problem right now that we have 5 percent unemployment, which is full employment. The economy is at potential, more or less. There isn’t any aggregate demand problem to solve. That’s implicitly or explicitly the position of many people on the other side.

I think that’s really a problem and very unfortunate. First of all, I think there’s very little reason to think it’s true. It’s really a kind of disturbing vision of the world that that comes out of.

There was a story the other day about the number of people in the US who are living on disposable cash incomes of two dollars a day or less. It’s shocking that this is a large and growing number. The political implication that a lot of people drew out of this is that this is a result of welfare reform and a sign of what a terrible choice that was, which is certainly true.

In this context I have to wonder, do you really, honestly think that there are so many people who are incapable of doing anything of any value to society that would be worth more than two dollars a day?

Are there so many people working at these extreme low wage jobs — are they doing those jobs because they simply lack the skills, they lack the human capital, they lack the work ethic to do something more productive, more valuable for society? I certainly don’t think so.

Look at the slowdown in labor productivity that we’ve seen. Does that reflect some technological or human incapacity or does it instead reflect a lack of demand in spending and growth that has condemned a huge number of people to just scrape by doing crappy jobs for little pay?

People who are perfectly capable of doing something much more productive, valuable, and rewarding for society and for themselves in an economy that was functioning in a higher level. That to me is ultimately what’s at stake here.