Hayek vs. Keynes Rap

By John Ballard

I heard the story of this video yesterday on Planet Money. Old codger me, I promptly forgot about it. John Western didn't forget and put it up on The Duck.

Link here to the story. Eighteen minutes podcast, kinda fun to listen.

....and here for the lyrics.

Tonight's State of the Union speech will have echoes of both Hayek and Keynes in the background but most listeners will have no clue what that means.

Nor will they give a damn. Forgotten now are the days immediately following that dismal day in September, 2008 when everybody briefly became a Keynesian.   How else would ARRA have passed so quickly?

When you hear the word stimulus tonight, think ARRA. That's the big money. No House Republicans and only three Republicans in the Senate voted for the bill. I guess they didn't get the memo about everybody being Keynesian. Anyone can access the website and discover (according to an interactive map and graph) that at this point only about a third of the funds allocated have been paid out, although two-thirds have been "announced." 

I toss out this handful of links in hopes that they might clean up lots of misinformation  I noticed yesterday that CNN was having a great time, now that disaster reporting is getting old, nit-picking government spending. A few thousand here, fifty grand there... only two "jobs created" one place, a handful somewhere else... pissing away valuable minutes, even hours of air time concentrating on minutiae while overlooking the big picture. That's what a television audience needs, I suppose, considering the tiny brains and short attention spans of the audience. I have to give the media credit for knowing their audience.

An interesting story here in Georgia was the announcement this week of an exciting jobs training program featuring thirty thousand vouchers from the Department of Labor to take advantage of Microsoft's Elevate America [annoying automatic audio at the link] training program to prepare people for technical jobs expected to be in high demand in the future.

The vouchers will be distributed through the Georgia Work Ready Web site through on-line application at www.gaworkready.org ; through participating Workforce Investment Act (WIA) One Stop Centers and select Goodwill locations.

In its role as Microsoft's "designated partner" for administration of Elevate America in the state, the Governor's Office of Workforce Development is responsible for the overall distribution program.

Vouchers will be available to citizens across the state on a first-come, first-served basis starting today through April 22, 2010. Individuals must activate their vouchers for training and complete certification exams within the 90 day period.

When I heard the announcement my first reaction was Wow! Bill Gates is really a generous guy. Then I realized it wasn't from Bill Gates, but Microsoft, the company. So I clicked on the Georgia Department of Labor link and learned the details. Georgia Work Ready is described in glowing terms.

Georgia Work Ready

Georgia Work Ready was launched in August 2006 by Governor Sonny Perdue and the Georgia Chamber of Commerce to improve the job training and marketability of Georgia's workforce and drive future economic growth for the state. It is the only initiative of its kind to be conducted through a partnership between a state government and state chamber of commerce, ensuring that companies can more reliably match the right people with the right jobs. Work Ready is based on a skills assessment and certification for job seekers and a job profiling system for businesses. By identifying both the needs of business and the available skills of Georgia's workforce, the state can more effectively generate the right talent for the right jobs.

Governor's Office of Workforce Development

The Governor's Office of Workforce Development (GOWD) was created by Governor Sonny Perdue in August 2006 to improve the job training and marketability of Georgia's workforce and drive future economic growth for the state. The office administers Work Ready, a voluntary workforce assessment system measuring "real world" skills that employers believe are critical to job success.

If you weren't digging hard and looking for it, you would never discover that the real reason for this good news is not the program but THE MONEY. You think our Republican Governor is clever enough to find money for this project in these tough economic times? You bet he is. He got it from ARRA. Somewhere in the site this critical piece of information had to appear.

To provide assistance to Georgians impacted by the economic downturn, and especially the unemployed, funds from the federal government's American Recovery and Reinvestment Act of 2009 (ARRA) have been made available to drive workforce development throughout the state.

But you would have to look hard to find it, buried like an addendum to a bundle of real estate sale documents to minimize any chance that the president or the American Recovery and Reinvestment Act was the source of funding.

Our Republican governor was born at night, but not last night. He knows very well how to get credit for federal dollars while simultaneously making certain that no Democrat gets even a nod.  

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A final word about jobs.
Jobs are not created by politicians or money.
Jobs are created by economic activity. The more there is the more jobs are needed to make it work. If money alone created jobs then the fortunes in savings and investment accounts would be crackling like popcorn. But they are not. Jobs are created when companies require more help doing whatever it is they do because they have so much business they cannot handle it with the workforce they already have.

Car and Truck companies are ramping up now for more production.  But unless and until they get the products delivered and sold these efforts will not have much meaning. I can tell you from experience in the food business that if you cook too much food and nobody buys it you made a costly mistake.

Economics is not rocket science. Hayek and Keynes can argue until the cows come home. Politicians can blather on for days. And media types and their talking heads can yammer on and on. But in the end business doesn't run on cash. It runs on credit. And until the people who control lending get back in the game expectations of a recovery remain slim.

And getting in the game does not mean managing risks but taking risks.
jmo.
I guess I'm still a Keynesian.