Paul Krugman wrote a brief but insightful article this week, VSPs and the FN. That’s FN as in Front National, or as we say here in America, the National Front. You know: the French fascist party that won the first round of the French regional elections, and is set to pick up two regions in the final vote this weekend. What Krugman has been trying to work out is why it is that people turn to right wing extremism after financial crises, generally, and our current economic situation specifically. His answer is basically, “It’s the Very Serious People, stupid!”
Krugman wrote, “If things keep going badly, this authority based on the presumption of expertise erodes, and politicians who offer more visceral answers gain support.” That’s especially true in Europe, for two reasons. One is that in Europe, there is a greater focus on the technocratic aspects of governing. The other is that, generally speaking, these technocrats have performed even worse than ours here in the US have. For example, the European Central Bank raised interest rates during the very trough of this recession. So on the political front, if mild mannered François Hollande goes along and does all the things the technocrats say, and things don’t get better, why not give the fire breathing Marine Le Pen a shot?
Let’s bring this back to the US. The Federal Reserve is going to meet next week. And they will almost certainly raise interest rates. But as I’ve been writing, there is no reason to do so. Let’s start with the easy part: unemployment (U3) is 5.0%, but we got down to 3.9% in 2000, and there was not much of any inflation. The employment to population ration for prime age (25-54) workers is still a couple of percentage points below its level before the crisis. And there is a lot more data. In fact, there is really nothing that indicates the Fed should raise rates — just data to justify it.
Dean Baker provided even more data in this regard, It Doesn’t Seem Hard to Get Good Help: the JOLTS Data. JOLTS stands for “Job Openings and Labor Turnover Survey.” It tells us how many job openings there are, and the number has been more or less flat since the first half of this year. Another thing is the “quits rate.” This is the percentage of people who voluntarily quit their jobs. It is an indication of how weak the job market is. So if a lot of people are quitting their jobs, it indicates that they have confidence that they can find another job. Right now, it is less than 2%. This is roughly what it was during the trough of the first George W Bush recession. As Baker concluded, “The current reading looks much more like a recession than a strong labor market.”
But this is what we expect, right? The power elite continue on, doing things that don’t help the country. As I’ve noted many times, they do just so happen to help their own class. So maybe they aren’t incompetent; maybe they are just evil. Regardless, they look incompetent. The power elite have managed, with one two-year exception, to keep wages of the working class stagnant for almost 40 years. Combine that with media hysteria over terrorism, and you have a recipe for major fascist inroads into our political system.
But will the power elite change? Of course not. They don’t have anything to fear from a Ted Cruz administration. He might make life harder on the elderly. He might starve huge numbers of children. But if anything, he’ll cut the taxes of the power elite. It’s almost like they’re in it together.
