3 – Time Travelling for Jobs

Read Part 2 Here
I have to admit that maybe this idea of going back in time to study up on all the causes of the unemployment crises may not have been a very bright idea.  I miss my wife and family, and Einstein was not always very good company. I mean how many puns can a cat make about relativity? So much for my tale of woe, I was on a mission and I was making some serious progress!

Looking at the data and even more importantly, reading books by writers that hired people to look at the data, I realized that the economic expansion flattened out right around the time Richard Nixon was in office. A time of high inflation, certainly caused by his reckless move to take the US off the gold standard! So let me look at my notes and…. OOOPS!  Nixon untethered the dollar from the Gold Standard to slow down inflation. Damn! But certainly it caused the inflationary spiral that came during the fiasco of the Carter years! So, let’s look and…. Carter, by the time he left office got inflation under control and did not return us to the Gold Standard.  And all during that wild and crazy inflationary era, the job market remained fairly stable and incomes managed to keep in line with inflation.

Then, we have what I now call the Reagan Devolution. Einstein! If you can have your stupid relativity puns, certainly I can do this one. Here, have some fresh kibble and shut up.

Sorry about that.  I was just trying to say that during the Reagan administration, we see the start of income inequality where the wealthy got proportionately more of labor’s production. The key finding is that 1981 was the starting point where wealth almost alone drove the divide. The old saying that ‘it takes money to make money’ morphed into ‘to make money, have money’. The former requires you spend money, the latter requires nothing more than having money. Instead of money trickling down, it actually floats up.

So, what got broke? I decided to examine first, our tax structure. I also looked at the breakdown in the power of unions coinciding with a White House that implemented a ‘business first’ agenda. The result, less union representation muted workers power to force income equality and job security. The White House agenda brought in an era of deregulation and less enforcement. A name developed for less government oversight of the economy; austerity. Smaller regulator staffs compounded by less rules meant there was nothing left to keep business in check. The rules that were enforced were the rules that businesses approve resulting in unfair labor practices without union or regulatory oversight. These practices all started during the Reagan years, but were never removed by either Bush, or either Clinton administrations. (not a typo, look at the people Obama put in power; and who does he seek advice from? Clinton).

So how do we get back the jobs?  There are a number of areas that we have to fix, and will go into each component in better detail in Part 4. But Part 3 is not done yet!

First we need to reevaluate the Fair Labor Standards Act (FLSA). President Obama has started this with his tougher Overtime regulations. But that only scratches the surface.

Next, our tax code needs a major overhaul. I could also suggest a radical change to how our monetary system works, but we can get lots of jobs without it. But an overhaul of the tax code is necessary because we have a severe spending problem. We are not spending anywhere near enough.

And of course as part of the FLSA law and the tax law changes, the concept of minimum wage needs to be understood and be implemented.

In the end, just changing the FLSA laws will have the biggest boost, but if we can get the government more money to spend, better still.