August 06, 2011
Pearlstein says it’s really too bad but there is just not much the government can do to get the economy back on track:
“we shouldn’t kid ourselves about how much government can do. Only markets can right-size companies and industries, find the market-clearing price for houses and shopping centers or bring wages in line with global competitive realities. Only markets can wring the speculative premium out of the price of stocks and commodities. And only markets can move workers from where they live to where they are needed, and create a match between the skills workers offer and the skills that companies require.”
Of course Pearlstein provides zero evidence for any of these assertions, because Fox on 15th Street is not a newspaper that cares about evidence. For example, the wages in the U.S. that are most out of line with “global competitive realities” are the wages of people like Steve Pearlstein, professionals who get paid way more than their counterparts in other wealthy countries. These imbalances can persist because these professionals have the power to sustain barriers that largely protect them from international competition unlike people like steelworkers and auto workers who have been deliberately subjected to international competition.
If there was a serious problem of mismatch between skills and jobs, as Pearlstein asserts, then we should be able to identify sectors of the economy where there are large numbers of job openings, wages are rising rapidly, and average hours are increasing. No such sector exists. In other words, this skills mismatch exists only in Pearlstein’s head and in the pages of the Washington Post.
If we needed any further proof about how unseriously Pearlstein and the Post take his column we have this comment:
“To spur private investment in equipment and research, the government could immediately allow companies of all sizes to deduct 100 percent of such expenses made in the next three years, rather than “depreciating” them over many years. That incentive to invest now will increase the deficit in the short run but have little or no impact on the long-term deficit.”
President Obama and Congress agreed on a full expensing provision as part of last year’s tax deal. In other words, we already did this. Oh well.
The reality is that there is much that we can do to get the unemployed back to work, but Pearlstein and the Post are willing to say things that are not true to dissaude others from acting.
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