Money on the Left

Direct Job Creation in America w/ Steven Attewell

January 17, 2019
Money on the Left
Direct Job Creation in America w/ Steven Attewell
Chapters
Money on the Left
Direct Job Creation in America w/ Steven Attewell
Jan 17, 2019
Money on the Left
We discuss America's forgotten history of direct public job creation.
Show Notes Transcript

In this episode, we're joined by Steven Attewell, Adjunct Professor of Public Policy at the City University of New York’s School of Labor and Urban Studies.

His recent book, People Must Live By Work (University of Pennsylvania Press), examines the history of direct job creation programs from the depths of the Great Depression and debates over the Employment Act of 1946 to the War on Poverty and the Humphrey-Hawkins Act of 1978.

Link to the book: http://www.upenn.edu/pennpress/book/15862.html





Speaker 1:
0:04
[inaudible]
Speaker 2:
0:09
[inaudible]
Speaker 1:
0:12
you were listening to money on the left, the official podcast of the modern money network humanities division or mmn h t. And this episode we're joined by Steven Attwell, adjunct professor of public policy at the City University of New York School of Labor and urban studies. We spoke with Steven about his excellent new book that people must live by, work direct job creation in America from FDR to Reagan, which was published this summer with the University of Pennsylvania. Press. In that book at well examines the history of job creation programs in the United States from the depths of the Great Depression through to the debates over the employment act of 1946 as well as within the task forces of the war on poverty and finally to the end of federal intervention in the aftermath of the Humphrey Hawkins Act of 1978 we also spoke to Stephen about exciting current events and current developments with regard to full employment and activism around it, and we're excited to share that conversation with you. Thanks again to Alex Williams for producing this episode and to Hillbilly Motorbike for the field.
Speaker 3:
1:20
Steven [inaudible], welcome to money on the left. Thank you for having me. So would you start off by telling us a little bit about your scholarly background and how you came to write, uh, people must live by work? Sure. So, uh, I am a, a rare beast called a policy historian. Um, and I sort of got into it because I was interested in political history, but I didn't want to do sort of the history of great men. Um, I wanted to look at like how the government worked and I found that there was this subfield that did the kind of stuff I was interested in. Uh, so I started as a undergraduate history major at Columbia. And then, uh, there was a history phd program at UC ESB that had a large number of, uh, policy historians who I could learn from, uh, as opposed to like just one person.
Speaker 3:
2:10
And I came to right people must live by work. Uh, I was s I actually write it a little bit about this in the introduction. I was inspired by my experience of reading, uh, Arthur slush and jurors description of the civil works administration in his classic, the coming of the new deal, which was like the first history of the new deal after World War Two. Uh, at the same time, while I was watching the Democratic presidential primary debates in 2004 and I was listening to all of these candidates talking about the need to create jobs, build jobs, grow jobs, etc. Uh, you know, touting their plans. And at the same time I was reading slessinger his account of how the u s government had created more than 4 million jobs in less than three months at a time at which the most advanced administrative technologies available where the rotary phone in the carbon copy.
Speaker 3:
2:59
And as you know, a budding policy wank. I went onto the websites of these, you know, John Edwards and you know, uh, John Kerry and, uh, you know, Dick Gephardt and looked at what was, you know, what their plans were. And they amounted to little more than these, like very small pots of money for like small business loans or tax credits or stuff like that. And the difference in ambition between the past and the present fascinated me. And my question was like, why is nobody talking about the civil works administration? Why did no one teach me this in school? Why was it, you know, did I have to stumble across it in a book? And that's what inspired me to, to start this project.
Speaker 4:
3:41
So I mean, as you're just mentioning there in your book, um, you foreground what you call the politics of direct job creation and you trace this throughout the 20th century. And, um, we were wondering if you could perhaps talk about how this history and foregrounding it complicates our historical memory of what's imaginable.
Speaker 3:
4:05
Yeah, that's a great question. So I think the main thing is we have a vision in our sort of collective political imagination of the way our system of, you know, social and economic policies supposed to work, right? This is, you know, social security. This is the welfare state. This is what the federal government does to, you know, manage the economy. Um, and there's this giant missing hole in terms of how everything was supposed to work. That for example, one of the things that like blew my mind when I started was that direct job creation was built into the social security plan. That it was always supposed to have this like extra leg to the stool, this extra safety net under the safety net to catch everybody. Um, and it's not there. And the fact that it's not there explains a lot of the problems in our welfare state.
Speaker 3:
5:02
Like why people slip through the cracks, why our system is not as generous as it ought to be. Likewise on the economic policy side, you know, why is it that the United States is, you know, even in its golden age, right, of the forties through the 70s, you know, in terms of, you know, the economy, why is it that we had higher unemployment than the rest of Europe, you know, or, you know, then the whole of of Western Europe, um, it's because there was this missing part, this, you know, we, we had a plan for what the postwar world should look like and then we didn't execute it. And as a result, we have this huge vulnerability that when there's, you know, a sudden downturn in the economy and mass unemployment, we have these like very, uh, sort of indirect tools to deal with it that take a while to, to go into effect.
Speaker 3:
5:56
And, you know, whether or not, you know, you've put enough resources into them, it's very uncertain and it's, you know, it's missing this additional lever. Um, and that really kind of complicates our understanding of like, what the state should look like. Um, and, you know, the, the sort of the next, uh, kind of thing that it complicates to me, you know, which, which ties into this is, you know, we have this popular conception that World War II ended the Great Depression and that the new deal failed to end the great depression. And that plays a big part in our historical imagination of what is the possible, right? What can the government do and what can't it do? Right? Why do people say, oh, the government can't, you know, create jobs or the president isn't really, can't really, you know, you know, directly affect the economy. Uh, it's because we have this false impression that like, we tried these programs and they failed. The reality is they succeeded enormously. But that really complicates our understanding of the world. Because what it gets at fundamentally is that unemployment is unnecessary. That we are a rich enough and powerful enough country that we can have whatever unemployment rate we want. It's just that for whatever reason, we have decided to just have, you know, high levels of unemployment.
Speaker 5:
7:26
So in the book you trace four main moments in the history of direct job creation, politics in the 20th century, the new deal, the immediate post war, post World War II era, the civil rights movement of the early 1960s and the debate surrounding the Humphrey Hawkins bill during the 1970s. Can you walk us through these moments? What defines each moment? What carries over from one to the next? What's lost? What's gained?
Speaker 3:
8:04
Great question. So to start with the new deal, um, I think it's primarily sort of defined by experimentation. So you have this kind of a unorthodox group of, um, you know, social workers, amateur social scientists, um, economists, civil engineers who are coming up with a new way of doing things on the fly because the old system has broken, right? That, you know, we used to have this old sort of voluntary state, you know, and local, uh, system of poor relief and it's completely collapsed because it can't handle the demand on it during the Great Depression. And at the same time, they're coming to this sort of more, uh, moral, ideological position that says, you know, people want work. They don't want handouts, they don't want charity. Uh, we have to give them what they want. It's the right thing to do. And so they come up with this program of direct job creation where they just say, look, let's, let's not worry about, you know, public works contracts, no, let's not worry about, you know, expanding the civil service or whatever.
Speaker 3:
9:18
Let's just directly hire people. Let's just go out, give them paychecks, put them to work. And along the way, you know, as they go from the federal emergency relief administration to the civil works administration, to the works progress administration, they're coming up with economic theories with a policy regime and an ideology and then a whole bunch of evidence about what works. Um, and even though we've come to think of them as these sort of temporary emergency programs almost from the beginning, and they're saying this needs to be permanent, this has to be a, you know, the way that the u s government functions. Um, uh, one of the scholars whose, whose work inspired me, uh, Edwin Amenta describes this as a jobs and assistance state as opposed to a welfare state. That it wasn't just a small program. It was, this is fundamentally how, you know, citizens are going to interact with the government and how the government is going to interact with the economy.
Speaker 3:
10:23
Um, and it works, you know, for eight years that, you know, large numbers of people, uh, you know, big sections of the workforce are hired through these programs and are lifted out of destitution. The economy, you know, grows at a very fast pace. Unemployment drops dramatically, and by the end of it, they, the people who run these programs are absolutely convinced they have a successful experiment on their hands. Then you get this sort of disjuncture with World War II, not so much because, you know, the World War II ended the Great Depression. I think it was over, uh, before the great depression as all right before the u s entered World War II. Um, but it basically the government shifts from directly employing people to build public works to directly employing people to smash fascism.
Speaker 5:
11:20
Can I ask you something about the work had the new deal moment, um, you in the book suggests that there are at least two competing, uh, let's say philosophies or schools that then, um, sort of compete for attention and resources. There's the, the camp that's interested in direct job creation, um, that is people oriented and the goal of which, uh, as I understand it, um, is to find people jobs first and foremost. Whereas the other camp is the traditional public works camp, which seems to privilege projects over people. Can you elaborate?
Speaker 3:
12:03
Yeah. So I mean, I would say it's not just a competition between those two. It's a competition between a lot of different, uh, ways of, of doing things. A lot of viewpoints. I mean, the new deal, uh, it wasn't that it lacked ideology. It just had many, many ideologies that were all competing for control. So, you know, uh, during the committee on economic security, you had a big fight between direct job creation folks and unemployment insurance advocates. Then you had a fight between, uh, you know, the direct job creation folks and the public works folks and their, what, what was really at stake was you have this old tradition since the progressive era of being very suspicious about the sort of the fiscal state that, um, you know, there was this fear that the government was inefficient, that it was corrupt, that it would waste money, that it couldn't manage things efficiently.
Speaker 3:
13:01
Um, and so what you needed to do was, you know, quote unquote run government like a business, use the, you know, all of these, uh, you know, mechanisms, um, to ensure that the government is getting good value for money. Um, and you know, this is kind of our default when we think about public works today. It's y, you know, during the great recession we were worried about, you know, shovel ready projects and you know, uh, this is where the whole fear about quote unquote boondoggles comes from. And what the direct job creation folks did was they sort of turned efficiency on its head. They said, rather than figuring out how much we can produce per person employed, right, which is the, the sort of the driving mentality for these kind of very capital machinery intensive ways of, of doing, uh, public works. They said, let's focus on creating the most numbers of jobs per dollar and then see what we can do with that manpower, with that Labor power.
Speaker 3:
14:02
Um, and you know, you had people, uh, both sort of within and without the WPA who sort of came to this conclusion. Uh, you know, John Kenneth Galbraith for example, writes a book, uh, called, uh, the economic effects of public works in 19, I think 43, uh, in which he compares, you know, the, the public works administration with the works progress administration and says, you know, this DJC stuff is way more efficient when it comes to actually doing what we wanted to do, which is produced enough jobs to bring down unemployment. And that traditional public works has this limiting factor. It's very slow to get off the ground because it's indirect because it's working through these private contractors. You tend to create relatively few new jobs. There's a lot more jobs going to, you know, people who are already working. Um, and you know, the private contractors are trying to make a profit, so they're trying to keep as much money in their own hands as possible.
Speaker 3:
15:04
Um, and you know, thankfully in sort of, you know, 1935, the WPA is able to sort of out hustle, um, the public works administration uncertain, both a bureaucratic level, they figure out that they've got the authority to run projects independently if they're worth a $25,000 or less. So what they do is they just take bigger projects and then sub divide them into $25,000 chunks and all of a sudden they can just run the whole system by themselves. But they also attack on an intellectual level and they, they make these interesting alliances with, uh, Keynesians with, um, uh, people like Lachlan Curry and Leon Henderson, Marriner Eccles, and they're all sort of saying, you know, all these people who really care about like, how much, uh, you know, uh, consumer demand, can we pump out into the economy? And they sort of say, hey, you know, our program is a great way of shunting a lot of consumer demand into the, you know, the bottom of the economy, you know, the, the lowest paid people who will go out and spend it immediately.
Speaker 3:
16:12
Um, and you know, so, you know, help us, let us help us get more budget and we will, you know, do the, the work of Keynesianism. Uh, so that's kind of how the, the conflict shakes out, uh, during the new deal. So then it sort of proceeds into the transition of World War II, which I believe you were starting to articulate. Um, I was wondering, yeah, talk more about that. Sure. So the major thing that happens during World War II is that first of all, you have the u s is first and kind of only experienced with full real, full employment where, you know, unemployment is below 3%. It's hovering around one, one and a half percent. Um, and this builds a certain kind of confidence within the government that like, they know how to do this now. Uh, and it's especially a confidence in economic, uh, kind of economic planning.
Speaker 3:
17:05
Uh, it's very, uh, Keynesian. It's very started technical. It's about statistics and modeling. Um, and then there's this sort of almost, you know, kind of utopian good government vision that this will somehow move beyond political conflict that, you know, these new deal programs were broadly successful, uh, but they involve political fights. You had to get appropriations through congress. You know, you had to make sure that there were projects in every single county in America so that, you know, uh, incumbents would, you know, uh, fight for their districts and they thought, you know, wouldn't it be cleaner and better if we just allow executive branch and experts in the executive branch to do things like modulate tax withholding rates or modulate the budget, um, without, you know, interference from Congress and that, that will allow us to have full employment, uh, without conflict. Um, and so what you have happen is there's this bill called the, uh, originally the full employment bill.
Speaker 3:
18:16
It eventually becomes the maximum employment bill and eventually just the Employment Act, which is a plan to, you know, establish a full employment as the economic policy of the United States. And there's is paralleled by bills that were happening, you know, across the rest of the Western world. Um, but what they do is they gut the enforcement mechanics that, you know, all it, all the employment bill becomes, is a vehicle for, you know, creating a presidential reports, making recommendations to Congress that an ace special committee will look into. But there's no like teeth do it. And what astonished me about this when I, when I dug into the archives is it's liberals doing this. It's not conservatives killing the bill. It is people like, uh, a senator Robert Wagner if New York, right? The guy who wrote half of the new deal basically. And they're coming out with these reports saying this is not going to be another WPA.
Speaker 3:
19:20
We're not going to have a literal right to a job. You know, we are going to create enough job openings that people can have work. And we're going to do this through this planning method. Um, and so this sort of whole legacy of the new deal gets sort of ripped out. And as a result, you know, when the full employment bill gets watered down and watered down and watered down, um, what you have is this sort of general commitment that the, you know, the federal government has a responsibility to make sure that unemployment doesn't get too high, but no real direct mechanism for doing that. So when you then get to the war on poverty in before, right
Speaker 4:
20:04
before you get there, I just wanted to ask about the specific point. Um, as you probably know, uh, and familiar with Alan Brinkley argues that the reason for this like liberal support of watering down the new deal and into the war is that there is, starts to be a sort of mirror by which, um, American liberals look across the pond into Europe and see Nazi fascist fascism as a sort of state employment guarantee. And so I was wondering what you thought of that and if you thought that contributed to this sort of shift and transition away from rights-based employment.
Speaker 6:
20:48
Um,
Speaker 3:
20:49
I mean, I admire Alan Brinkley's work, but I think he's wrong on this point. Um, you know, you look at, uh, so for example, um, one of the Great Social Keynesians, uh, Alvin Hansen, right, called the American canes, really wants Keynesianism to work through these big public investments, right? Healthcare, housing, education, science, uh, you know, public infrastructure, you name it. And you know, he comes up with the, with, you know, a full employment plan himself and he's very influential in sort of advising the people, drafting the, the employment tact. But I've seen memos in which he basically says, you know what, why don't we just get all of this social Keynesian stuff from the bill? Like he's, he's talking about eliminating his own work and he's not doing it because he says, you know, Oh, I'm worried about, you know, that will become fascist. He says, well, we can just do it later.
Speaker 3:
21:55
But what it really comes down to for me is this overconfidence in sort of a technical expertise within the executive branch that all they thought they needed to get right was the process and then they could take over and do the rest later. That, you know, once you had the council of economic advisors up and running that they would come out with the, the correct Social Keynesian plan. So it didn't need to be spelled out in the bill. And you know, low and behold when the bill, you know, passes and the council of economic advisors gets going, there's no way to actually get the social Keynesian thing that they wanted that in. In some ways they'd sort of voluntarily disarmed because they thought they'd already won
Speaker 7:
22:42
travel around this country
Speaker 8:
22:43
tree
Speaker 7:
22:45
from shoe shining [inaudible]
Speaker 8:
22:50
and it really made us angry. The things we heard.
Speaker 7:
23:00
Aw, we saw, oh the Garmin, we're good. Thanks for all the stool
Speaker 8:
23:10
getting paid.
Speaker 7:
23:13
Few bucks an hour, their bosses [inaudible]
Speaker 3:
23:20
then you take us into the civil rights movement. What happened then? Yeah. So this is where the sort of what is lost and what is gained is really important. And what is carried over is really important is that in the 1960s, the federal government, uh, is relearning this from scratch, that like the, you know, the new deal agencies are gone. There's no, um, transmission of information to the future. And what you instead have is that memory is preserved within the sort of a social democratic wing of the civil rights movement. People like a Phillip Randolph, Bayard Rustin. Um, and it's, it's not a coincidence that when they're putting together the freedom budget, uh, they're working very closely with, uh, Leon Kaiser. Lynn who was, you know, a young new dealer. He was, you know, the guy who wrote most of, uh, Rac Wagner's legislation, uh, and helped to write the, the employment act of 1946.
Speaker 3:
24:24
And, you know, he's sort of come around a little bit on a direct job creation, although he's, he's more of a, a sort of, at this point, a kind of an old school social Keynesian. And the problem is there's no synthesis between these two groups that, you know, in the Labor Department under Willard words, you've got people who are starting to work their way towards this idea that like, hmm, job training isn't enough. You know, we have a very discriminatory labor market, you know, we're going to need to, the federal government's going to need to give, you know, black people jobs to like bring down the racial gap in, in unemployment. Uh, and likewise in the, uh, office of economic opportunity, right? The, the, the war on poverty agency where they initially are very gung ho on the idea of like, okay, you know, the problem with the poor is that they're politically disempowered.
Speaker 3:
25:18
So we'll create these community action programs and you know, that will mobilize the poor to like demand a fair share. And that's how they stopped being poor. Well, shit, that's very politically controversial, uh, stop that, don't want to do that anymore. Then they, they also have this idea that like, oh, the problem with the poorer is that, you know, they are culturally deprived or educationally deprived or that they lack skills. So we'll just give them, uh, you know, a huge amount of job training programs and education programs, um, to, you know, equalize this and they run into a couple big problems, one of which is, uh, they're training people and then there's no jobs on the end of it or they're providing a lot of education. But the problem is education takes decades to show any effect, right? You know, you, you know, you start headstart's a great program, right?
Speaker 3:
26:13
But you're not going to know whether, you know, that's gonna make a real difference in someone's life and you know, for 10, 15 years later. And so, you know, they're starting to come around on this idea that like, okay, there's this thing called the poverty gap. It's, you know, how much money would you need to give the poor of America to bring them above the poverty line? So now they're really starting to think about like, okay, fighting poverty requires redistribution of material resources. And one of the things that they, they end up with the is they say, let's just create a jobs program. But those two agencies never have a synthesis with the folks in the civil rights movement who've already worked this out decades earlier and are, you know, trying to like get them to do this thing. Um, and then you s you know, as you start to get into the sort of late sixties or mid to late sixties, you start to get a problem, which is inflation, right?
Speaker 3:
27:10
That, you know, Keynesians had gained control of the levers of power in the 1960s by sh, you know, demonstrating that they had, you know, mastery of the economy, right? They'd done the tax cut, the tax cut had worked, you know, the, the economy boomed. But now, you know, between the sort of domestic, uh, boom and Vietnam, you've got overheating of the economy, you've got inflation and that means you can't have more spending, right? Because that's going to fight against, you know, your, your attempts to keep inflation in check. It also means that, you know, the Keynesian switched from wanting a tax cut to wanting a tax increase because they want to cool down a domestic demands and they know that the quid pro quo from Congress is going to be, you want us to raise taxes, you're going to have to cut Warren poverty spending.
Speaker 3:
28:05
So the problem with the 60s, you know, though, the way that I think about this moment is that there is this disjuncture between the policy learning that's going on and the realm of political and possibility that there is this window right from, you know, really 1964 to 1966 where, or really maybe just late 65, but anyway, before the midterm elections of 1966 where you could perhaps do something on direct job creation. And by the time that they figured out that's what they want to do, the moment's lost. They don't have work in majority in Congress anymore. You know, the support that they might've had out there for, for jobs has been squandered by, uh, you know, uh, anti Vietnam, you know, sentiment and like a backlash against, you know, the, the new left in the civil rights movement. So you sort of, you know, you, you hit a wall in the late sixties, especially because once Nixon becomes president, you're not going to go anywhere. Um, and that's what leads us to the 70s.
Speaker 5:
29:18
Can you, um, talk a little bit about, so a lot of your narrative, um, which is very rich and informative. A lot of your narrative is about sort of the inner inner policy circles and fractures and fights. Um, but I wonder if you could trace back to some of this history and shine a bit more light on social movements and calls for, or the lack of calls for direct job creation from the 30s into the late 1960s and maybe, um, maybe highlight a few important moments along the way. Like, I think our, our listeners might like to hear a little bit about, a little bit more about something you mentioned in passing the, the freedom budget.
Speaker 3:
30:14
Sure. So starting with the 30s, um, you know, uh, the, the person who's really done the, the best work on sort of social movements and, and this and, uh, jobs in the 30s is challenged. Chad Allen Goldberg who looks at sort of left wing social movements of the unemployed in the 1930s, which, you know, some of which were associated with the Communist Party, some of which were associated with the Socialist Party, some of which were associated with this, the CIO unions. Um, and you know, they were a very strong presence for a direct job creation. They wanted jobs, they made protests in favor of jobs. Uh, and what's interesting in the 30s is that you get this kind of inside, outside politics. So for example, um, civil as a direct job creation workers like WPA workers were organized into unions. There were two of them. In fact, there was one called the workers alliance, which was a popular front sort of communist Socialist Party joint.
Speaker 3:
31:15
And then there was, uh, the UAW, which organized its own unemployed workers or you know, a new deal workers union because so many of their members get laid off, um, from the auto industry and then go to work for the WPA. So they just sort of follow them into the WPA. And you get this interesting sort of dynamic where these unions and social movements like will protest. They say we want higher wages, we want more jobs, this isn't good enough. And then agency officials like, uh, Aubrey Williams for example, will come out and say, your right, help us lobby congress to get more money so that we can do those things and their certain, so they sort of like, you know, a useful, uh, collaboration going on. Um, but at the same time there's like, it is at somewhat arms length. Like the new deal doesn't formally recognize these unions, uh, informally will.
Speaker 3:
32:17
Uh, and there's a lot of sort of going back and forth on like, uh, prevailing wages is, is something that they're always negotiating with the labor moving. Um, then when you get to the 60s, um, you know, the direct job creation is seen by the civil rights movement, uh, by, or I should say by many sections of the civil rights movement as necessary for a whole bunch of reasons. One, it's necessary for achieving the [inaudible] material. You know, ambitions of the civil rights movement. Martin Luther King, uh, has this great statement where he says, you know, people have to be able to buy the sandwich at the lunch counter that they've just won the right to sit down at. Um, so, you know, they're, one of the things that is being fought for by the civil rights movement is jobs and higher wages. It's the reason why in the march on Washington in 1963, the, the title of the march is a march for jobs and freedom because even as you know, there's a good economy in the 60s, rates of unemployment, uh, for African Americans are way higher than for whites.
Speaker 3:
33:27
It's also seen as important, uh, for breaking the triangle of segregation, right? The triangle of jobs, housing, education, that, you know, you can't, uh, you know, even if you now legally days Euray can buy a house in a white neighborhood, um, you can't afford it. Um, because your job isn't good enough and your job isn't good enough because you don't have the formal qualifications to get a good job. But in order to get the formal qualifications need to go to a good school, well the good schools are good because they're in, you know, a high property value neighborhoods that are putting more money into schools. So the idea is while jobs is one of the ways that you can break that, that triangle that you can give people good paying jobs, then they can, you know, not only will their neighborhoods get better, but maybe they can move into better neighborhoods and get a better education for their kids and so on and so forth.
Speaker 3:
34:23
And then finally it's seen as important for building across racial working class coalition because a lot of people in the civil rights movement, you know, even before the sort of trouble signs in the economy are really visible, um, realize that like, if there's going to be a conflict between white workers and black workers over a limited pool of jobs, then white workers are going to go and vote for the racists. So the idea is, well, if we can use direct job creation to create enough jobs for everybody, and this is the, the, the vision of the freedom budget, right? That if there's enough jobs for everybody, then you can have fair employment without anybody losing, right. That you can have affirmative action, that you can, you know, help all of these people who have been kept out of the labor market and kept out of good jobs without freaking out white working class voters who are like clinging to their, you know, a toe hold on the, on the national economy and getting them to like go vote for, for uh, for George Wallace to help us put going to the seventies
Speaker 1:
35:38
off as long. Austin sort of circle back a little bit, uh, and ask you to maybe comment on a little bit more about the role of like political, economic orthodoxy in kind of shaping the decisions of these policymakers and these people in the positions of making decisions about direct com job creation. Uh, you know, Keynesianism neoclassical economics. Institutionalism what's going on?
Speaker 3:
36:04
So one of the things that's really interesting when I was looking at direct job creation is that it was very mutable as an economic [inaudible] philosophy or sorry, a mutable in political economic terms that, um, you know, they could speak the language of Keynesians. They could say like, hey, we're all about, you know, demand. And you know, we understand that like, the problem with the economy is deficient consumption and you know, uh, this, you know, our program has the best marginal propensity to consume and blah, blah, blah, blah, blah, right? And try to get their support, but then they could also like go over to the institutionalist and say like, hey man, you know, you, you talk about like, you know, uh, administered prices and monopoly. What about Monopsony, right? That we've got these, you know, massive corporations that are depressing, uh, wages because they control whether or not you get a job.
Speaker 3:
37:01
So if the public sector can like, break open that monopsony and like restore competition for wages, then all of a sudden, you know, you're going to get enough demand out there for these overly rigid prices. Uh, and by the way, like, maybe we, you know, this is like, they could even flirt with like the, the, uh, production for use people in the 1930s, the like, quasi socialists and say like, well, you know, hey, we employ all of these people who says it all has to be public works. Why can't we sell clothes? Why can't we make clothes for people? Why can't we, you know, can food and distribute it to people? Why can't we build housing? You know, they, they have this sort of mutability um, but then in, in, you know, if you look from the thirties to the seventies, Keynesianism especially plays a changing role that in the 1930s, the two groups are simpatico, right?
Speaker 3:
37:58
Because Keynesians are all about pushing more spending and this is a great vehicle for pushing more spending. And then in the 1940s, they sort of get very confident and think, we don't need these people anymore. Right? We can just do this directly through, you know, manipulating the budget and manipulating the tax code. Um, so they sort of kick them to the curb and then in the 60s, you know, because they're doing their own thing, they start to see them as hostile. Like, you're screwing up our budgets, you know, you're screwing up our tax plans. And then the real thing is in the 70s, uh, because the 70s is when the of the neoclassical synthesis, uh, you know, of Keynesianism and neoclassical economics, the Phillips curve breaks down, right, that there's no longer a stable relationship between inflation and unemployment that would allow a government to just pick a point and adjust interest rates.
Speaker 3:
38:54
And you know, you'd get the sort of hands free economic planning that you wanted. And there increasingly in the 70s under threat from, you know, neo-conservative economists like Milton Friedman who are saying like, you can't do any of this, right? There is this thing called [inaudible]. It means that, you know, you can't have full employment that any kind of government activism is going to fail. And you know, because he had quote unquote predicted, the breakdown of the Phillips Curve had quote unquote predicted stagflation. You know, these Keynesians are really unsure about them. You know, they, they lose their confidence. And so what you see in the 1970s, especially in these hearings over the Humphrey Hawkins Act, is that Keynesians kind of splinter as a sort of, uh, an expert community that you have some of them who say like the Humphrey Hawkins Act is what we need. You know, inflation is not that big a deal.
Speaker 3:
39:52
Unemployment is more important. You've got other people who say, any attempt to bring down unemployment is going to cause hyperinflation. Like, you know, we can't rock the boat, we don't know what's going to happen. So just like back, back away from full, you know, from full employment as an objective. And as a result, like the Humphrey Hawkins Act is not passed in 1976 now, it was going to get vetoed by, by Gerald Ford Anyway, but it sort of interrupted the process of a consensus building around this piece of legislation. And then unfortunately, one of the, like biggest kind of quote unquote right wing Keynesians, uh, this guy called Charles Schultz becomes Carter's head of the CEA. And then when, you know, the Carter administration has to deal with the Humphrey Hawkins Act. He's the lead negotiator and he is like totally in opposition.
Speaker 5:
40:49
So you've walked as back to Humphrey Hawkins. Uh, so what I'd like us to do now is to sort of take a wider shot, uh, and tell our listeners who are, you know, less familiar with the Humphrey Hawkins Bill and the fight and the gutting of the bill. What is this? What is this legislation? Where did it come from? How did it transform over time? Go
Speaker 3:
41:18
Great. So the broader context is that in 1973, you have the worst recession since the Great Depression, right? You know, you have this, you know, it lasts from 73 to 75 unemployment goes up, you know, to like 10, 11%. Everyone's freaking out. And one of the responses to this is the creation of Sita, the comprehensive employment and training act, which creates about three quarters of a million jobs, right? So direct job creation. Now, once again, is in power. It's in government. It is the biggest function of the Labor Department. So now it's not just like some, you know, people in the civil rights movement or some, you know, a few walks in a few agencies. This is the biggest thing that the labor department does is employ people directly. And that is kind of the context for the Humphrey Hawkins Act because now that they've kind of built this capacity, they want to go further and create a right to a job to like actually deal with the, the mass unemployment because 750,000 jobs is not bad, but it's like there's 7 million people who are unemployed.
Speaker 3:
42:29
It's not dealing with the bulk of the problem. So the Humphrey Hawkins Act is a compromise between two different perspectives. Uh, one of them is from a congressman Augustus Hawkins who is the founder of the Congressional Black Caucus. He is an old school new deal Democrat, um, you know, from, uh, south central Los Angeles. And his version of this is, uh, based on Scandinavian social democracy. So that envisions a system in which people have a legal right to a job. The way that is enforced is that you have local planning councils who come up with a shelf of programs. Um, then you have what's called a job guarantee office, which is like, im replaces the unemployment office, right? If you don't have a job, you go into this job and you apply for a job. Um, and there then coordinating with the, the Labor Department and the executive and say, okay, we have this many unemployed people.
Speaker 3:
43:39
Let's put, you know, uh, we need, you know, projects that we'll put them to work. So they take projects off the shelf and they send people to what's called the stand by job corps, which is like a new WPA basically. So it's this kind of Nice little tripartite system. Um, but it's very statist right? All of this is happening on pretty much on the public side, right. And it's like very militantly backed by the right to sue the government that, you know, if, uh, if you need a job and the government won't give you a job, you can go in and sue the federal government and the courts will force them to give you a job. The other version of this is Hubert Humphrey and you know, Hubert Humphrey had run for president in 1968 he'd lost. Um, but he's still a senator or he, he gets back into the Senate, I should say.
Speaker 3:
44:36
Um, cause he'd been the vice president and he starts working with our old friend, uh, Leon Kaiser Ling who's still around who had been a major supporter of his in 1968 had written a lot of speeches for him. And W Humphrey wants to do is to amend the 1946 employment act and put numerical teeth into it to say, you know, it's not enough that the president transmits a report to Congress about the economy. It's not enough that we have a council of economic advisors, you have to transmit a budget, you know, to the, uh, Congress that says that unemployment will, you know, be brought down to 3% or less. And so they merge these two bills,
Speaker 6:
45:21
right?
Speaker 3:
45:23
Kegeling isn't as much into the direct job creation stuff. He wants hump a, he wants Hawkins to like accept more of this kind of Keynesian economic planning stuff. Um,
Speaker 6:
45:35
[inaudible]
Speaker 3:
45:35
but like, he, you know, accepts there's going to be some role for direct job creation and then he gets into a big fight or they, they get into a big fight with Keynesians in 1976 where, uh, Hubert Humphrey and Hawkins are pushing this bill through the congress. Uh, Kaiser Ling is testifying before Congress and he's getting into a bunch of fights with economists who are saying, you know, we've gotta be worried about inflation. And Kaiser [inaudible] has this very interesting perspective where he says, you know, it's, it's not that, uh, full employment causes inflation. Unemployment causes inflation because if you know, you don't have full utilization of the economy, then you've got bottlenecks, uh, and increasing prices for, you know, um, parts and raw materials and stuff like that. And that increases the prices of manufactured goods. So if you have full, full employment prices will actually decrease, uh, because those inputs will be cheaper. Um, but this is like a big fight that, you know, they, they don't agree with. So after the 1976 elections,
Speaker 3:
46:45
they think they're in a good position that the Humphrey Hawkins Act was endorsed in the Democratic Platform of 1976 tip O'Neil likes it, right? And he's running the house. Uh, they even get Jimmy Carter to sign onto it even though it's very tepidly. And then the weirdest thing happens. And this is a, a very similar story to what happens with health care under Carter, which is Carter having endorsed this stuff. Now says, I have my own plan. And since he's the president, everyone sort of stops and lets him do his plan. And his plan is called the program for better jobs in income. PBJ AI, it's not a great acronym. And PBJ AI tries to do everything it tries. Say, okay, um, we wanna deal with poverty, we want to deal with unemployment and we want to deal with welfare all in one go. So what it would do is, uh, if you were unemployed and you know, we're able to work, uh, there would be direct job creation if you were employed but still poor. There would be a, basically a guaranteed, uh, above poverty wage through an expansion of the earned income tax credit. And if you were, uh, poor and couldn't work, they would create a national welfare benefits.
Speaker 6:
48:07
And [inaudible]
Speaker 3:
48:09
this is a very torturous process. It goes on for nine months where you have people in the Department of Health, education and welfare who are only interested in the, uh, the welfare side of things. You have people in the Labor Department who are only interested in the job side of things. And then you've got all of the economic departments, right, the CEA, the treasury commerce, uh, the Fed who are all like, this is terrible. We don't want any of this. And Charles Schultz goes to Carter and say, Hey, remember how you also promised not to raise the deficit? And Carter says, okay, fine, uh, give me a version of the PBJ AI that doesn't increase spending.
Speaker 3:
48:55
And th like, the people running it say like, that's impossible. Like we have contradictory, you can't deal with unemployment, poverty, welfare, and not spend any new money. Um, so the sort of the plain cracks up, it goes nowhere in Congress. Everyone involved hates it, but it's delayed dealing with the Humphrey Hawkins Act for nine months and then they start negotiating. The Carter Administration starts negotiating with the Hump with Senator Humphrey and Congressman Hawkins over the Humphrey Hawkins Act and they Carter in his infinite wisdom, appoints Charles Schultz to be the lead negotiator. This guy who testified against the bill in 1976 and Schultes fights this thing, tooth and nail. He goes round and round and round, ironically on political economy. He's like, no, but inflation, Phillips curve, this stuff like I believe in, you know, I'm going to fight for it. Um, you know, I don't want binding targets for unemployment. I don't want direct job creation, Dah, Dah, Dah, Dah.
Speaker 3:
49:58
And what I found in, in the archives is that at the same time that he's like, you know, grinding this whole thing to a halt. He's also going to people in Congress and saying, Hey, I want you to sabotage this bill. But he's literally stabbing them in the back. And so, you know, a, almost a year goes by, this is why the Humphrey Hawkins Act gets passed in late 78 instead of, you know, immediately. Um, and by this point it's been cut two ribbons. And what his staunch shows me is even after they have completely defanged this bill to the point where it's essentially a paper tiger, just like the employment act of 1946 even after that, you've still got people in the Carter administration figuring out ways to not enforce this. Like they're, they're getting, uh, they're soliciting opinions from the office of legal counsel saying like, can we ignore this law? Can we not enforce it? Um, and this like contributes to this sort of breakup between Carter and the left of the Democratic Party that culminates in, uh, Teddy Kennedy running against him in 1980 in Carter losing the presidency in 1980
Speaker 8:
51:09
a for you. So bad. [inaudible] um, so long. Seven [inaudible] [inaudible] Baby, Huh? [inaudible]
Speaker 9:
51:27
mm.
Speaker 8:
51:30
Saving the Satan can to the [inaudible] the happy zone.
Speaker 9:
51:48
[inaudible]
Speaker 2:
52:10
[inaudible] your son to sleep
Speaker 8:
52:25
the t.
Speaker 4:
52:29
So that's like a, that's a whirlwind. Um, as kind of the history of this breakup of the, the last real, uh, Bill that we've seen to raise the potential of, uh, jobs guaranteed in this country. And so I was wondering, because you, you do cite in, in your description of Humphrey Hawkins, one of the main problems is that Jimmy Carter, uh, sort of tried to smash all these things together into one bill that proceeded Humphrey Hawkins on the debate schedule in one of the, the principle issues in that was that he didn't want to raise spending. And that sort of made me think, you know, because we are the money on the left podcast. I was wondering if you could talk about at what point in this project you arrived or came to MMT and how that informs the way you think about these moments.
Speaker 3:
53:24
Ah, that's a great question. So, uh, I came to MMT, uh, sometime in graduate school that I was reading a lot of political economy fairly widely. Um, you know, I was reading, uh, Vickery, I was reading a lot of, uh, Minsky and then I ran across, uh, where is it? I actually have my copy on my desk. Yeah. Uh, I ran across, uh, understanding moaning money by, uh, l Randall Ray and kind of made me rethink a lot of stuff because in addition to writing this book, I had been doing a lot of blogging about direct job creation and trying to come up with my own plan and try to figure out like how much would it cost and how would you pay for it. Um, and I had been working on this kind of DOJ where I said, look, you know, cause I had noticed like during the great recession that the Federal Reserve had just created $7 trillion out of nowhere and it didn't create hyperinflation.
Speaker 3:
54:25
And I was like, Huh, why don't we set up a system where like, we'll have a direct job creation fund, right? That'll be financed, you know, with the payroll tax or something like that. But it can borrow from the Fed so that when you have a recession, instead of like having to support itself with its own revenue, it can take out a theoretically infinite, you know, zero interest loan from the Fed. And then eventually pay it back. And then I read Elle Randall Ray and I was like, oh, I've kind of backdoored my way into this. Like, you know, or we could just, you know, tell the Fed to write the government a check. Like, you know, that would be a simpler way to do this. Um, and, you know, it, uh, it kinda changed my thinking about this. I mean, I'm still fairly new to MMT.
Speaker 3:
55:20
I'm still trying to sort of work my way in through some questions about like, okay, how do we figure out how much money we can create? Like, how do you, you know, relative to the, you know, real productive capacity of the economy, you know, how do you, how do you operationalize that? Um, to what extent do you, you know, to what extent are backdoors useful, right? You know, if credit is all about faith, right? Um, you know, how do you kind of work the magic of convincing people that money is real, um, and liberate this power, uh, for public good? Because that's, that's the thing that like l Randall Res Work and then, you know, later when I've read more MMT have really gotten me to think about is this enormous power that is monetary power that we only use for the interests of a very powerful but small industry, right? That, you know, we created $7 trillion for the financial sector. We didn't create $7 trillion for people whose houses were getting foreclosed on or people who are going unemployed or people who didn't have health insurance. And I was like, why don't we use this power for everybody, not just for, you know, the people who are actually doing the best.
Speaker 1:
56:42
So one of the more exciting developments coming out of the MMT world now is the talk about not just a jobs guarantee, but a, a green new deal and there's sort of heavy borrowing from, um, the sort of rhetoric around the new deal that you cover throughout your book. Could you maybe talk about and comment on or just join us in, in a wonder at the sunrise movement and the, in the call for the green new deal?
Speaker 3:
57:12
Yeah. So, uh, I'm absolutely fascinated by the green new deal. Uh, I think it's like one of the smartest things that the left has come up with, uh, since like Medicare for all right. It's, it's not so much that it's like an incredibly technically complicated on its own, although it will be, but just the, the way of thinking about it right when I was talking about like, how do you sell the, how do you sell people on the, on the, the faith of this, on the dream of this. And what really got to me about the green new deal is, um, I wrote about this at lawyers guns and money is, it's a way of doing everything that the left cares about, right? It's about a job guarantee. It's about, uh, education and training. It's about a living, you know, the fight for 15. It's about environmental justice.
Speaker 3:
58:03
It's about racial justice. Um, it's about, um, universal healthcare. It's about childcare, it's about unions. Um, but it's in one vision that we can then talk to people about that, you know, it's not a 50 point plan for every single issue. It is the vehicle through which everything else flows. And I think it's God damn brilliant. Um, and it's one of those things that people really, really like that, you know, if you pull people on the green new deal, they like it. If you, you know, it's, it's even more popular than job guarantee, sort of full stop. Um, because it like combines everything that people like about the job guarantee with all of the stuff that they care about on a whole host of other issues.
Speaker 1:
58:52
It's got a much better ring than PBJ AI.
Speaker 3:
58:55
Oh, absolutely. Absolutely. Let us, let us never follow the Carter administration on anything having to do with like branding and public relations piece or fiscal policy. Very much. Yeah. So
Speaker 5:
59:08
from the point of view of your new book, what are the key lessons that we should be drawing for not just the fight for a job guarantee, um, but
Speaker 3:
59:22
more expansively, um, this green new deal? So, yeah, this is something I was, I was thinking about recently and I'm actually, uh, writing, uh, working on, uh, a paper or, uh, hopefully that'll be co-written between, uh, myself and, uh, Phil Harvey, um, about like what are these lessons? Um, and the moment, I think there are three main ones. Um, you know, I, I don't know if everyone's going to agree on this, but this is what, you know, I, I've come to the conclusion on number one, I think methods of organization really matter that it matters that direct job creation is public. Um, and not private. That, you know, it, I don't think it's going to work if we try to do this through like tax credits and subsidies to private employers, right? That's the [inaudible] model. Um, it matters that it's federal and not state or local.
Speaker 3:
60:21
And this is where I actually, uh, you know, differ from people like, um, the CBPS, uh, CB PPS plan, uh, you know, and the Levy Institute is playing. So Ray and Sandy Darity, uh, and also Cory Booker's a proposal, which is like, if you look through the whole history of like American social and economic policy, one of the key flaws that we've always had to deal with is federalism. That anytime you introduce a role for the states, you introduced this enormous capacity for regional variation. That is a polite way of saying, you know, racial discrimination, right? I mean, I'm, the best example of this is the affordable care act, right? If it hadn't been for Justice Roberts saying that the Medicaid expansion was a voluntary, there would be millions of people in Texas and Florida and all throughout the, the deep South who would have health insurance right now.
Speaker 3:
61:25
And the reason they don't is because those states are fundamentally opposed to the idea of black people getting any help from the government. And the same thing will happen with a job guarantee, right? You know, we can see this from the civil rights movement and the war on poverty, that the war on poverty was deeply disliked in the south because it gave poor black people an alternative to the white controlled labor market. And you know, in, in Mississippi that was absolutely hated. Um, so I think like the federal government needs to run this. Uh, it's not that the state and local governments and NGOs can't be like sponsors can't propose projects and help out with money and you know, give people a place to slot into. But like the federal government has to be in the driver's seat. Um, second thing, scale and scope matters.
Speaker 3:
62:22
Direct job creation has to be large enough in relation to the size of the problem to have a real impact. So for example, like the Cory booker sort of experimental model, I don't think it'll work. Now granted, you know, right now unemployment is super low, but like, it's not going to stay that way forever. So in the future, if we need DJC to like actually step up and bring unemployment rates down, it's gotta be big enough to do that. It's got to have a big enough impact on the economy. Um, the second thing is how you, uh, second part of that is how you organize the work matters. Like what kinds of stuff are you doing? Um, we've already talked about like the, the way that the greenness really matters because it energizes people who really care about climate change and the fact that this planet is going to be unlivable in 12 years if we don't do something.
Speaker 3:
63:14
Um, or sorry, it, that if we don't do anything in the next 12 years, the world will become unlivable. Um, but also things like, for example, light versus heavy construction, right? If we're going to build stuff, do we rely on a model that says let's you know, buy or rent as many cranes and backhoes and steamrollers as you know, is possible to like bring down the number of workers we need to the smallest number? Or do we say like, we've got a lot of unemployed people, their labor is valuable. Let's give them tools and put them to work. Let's be labor intensive. That's a good thing. Not a bad thing. Um, and finally an under that point, uh, the mix of infrastructure and services matters. So one of the things that people have been worried about is that if all of this work is in construction, it's going to be very heavily tilted towards men and leave a lot of women behind or just people who aren't suited to construction work.
Speaker 3:
64:18
Like, you know, people with disabilities and you know, like myself. Um, so in the 1970s, like one of the real advances, you know, the sita had a lot of problems, but one of the things they did right was it created what was called public service employment jobs. So there's all kinds of services that people need, whether it's health care, whether it's childcare, whether it's education, whether it's elder care, or whether it's just making the rest of the government work more efficiently, you know, put enough people into the DMV that the line takes five minutes. You know, it's that kind of stuff that like legitimately touches people. Um, the third thing is there's going to be conflict within the broader left slash center left, like the Democratic Party family, whatever you want to call it. And we need to be ready for it. So on the one hand, like direct job creation scares the hell out of some people for a couple of different reasons, right?
Speaker 3:
65:16
It is more statist like it is the government employing people. Um, it involves more spending, it bypasses a lot of traditional stakeholders like private contractors, state and local governments. Um, although, you know, as I said, I think there's a role for state local governments. Um, and it also challenges powerful sometimes semi-conscious ideas about the necessity of unemployment and the worth of unemployed workers. That there's this assumption that people who are unemployed, uh, are non productive or not worthwhile, you know, are, are lazy or stupid or you know, whatever. And so, you know, they, they have no value and the reality is like, unemployed workers have this enormous value that is constantly being lost, right? That there's no way of preserving labor power of someone who's not working.
Speaker 3:
66:15
Um, the another thing is that like, given that direct job creation is only gonna happen if and when Democrats control all three branches of government. Uh, one of the biggest problems we're going to have to deal with is not so much the right vigor. And I hate this idea, but they, you know, either we beat them or you know, or it never happens, but it's people on the left to center left, right? We're going to have to deal with budget hawks, we're gonna have to deal with other centers who are crazy worried about deficits. Um, and we're also going to have to deal with other leftists like universal basic income enthusiasts who see direct job creation as a competitor for budget dollars and political oxygen. Uh, and then the fourth thing I'll say is that like visibility really matters. I think one of the ways that we kind of missed a trick when it came to the American recovery and reinvestment act of 2009 is that we tried to like make things hidden.
Speaker 3:
67:09
You know, where, you know, uh, I've been, the best example of this is the, like the payroll tax credit that no one realized they got. And I was thinking back to like, when the bush tax cuts happened and like they sent out mail to everyone in America with like a picture of George Bushes face and saying like, hey, we got you a tax cut. We should do stuff like that. Like the WPA had these big red, white and blue posters on all of their job sites so that everyone knew that, where the WPA project in their community was. Um, you know, and when it came to Arra like, yeah, there were these kind of ugly orange signs, but unless you were driving, you couldn't really see them. So there need to be like a mix of projects so that like, and we have to be a little bit crassly political about this, you know, we need to make sure that there are projects in every congressional district in America and we need to make them, you know, very, very visible.
Speaker 3:
68:10
You know, uh, my, my thing that I, I'm nuts about is, uh, I believe very strongly in giving people cards. So, you know, you get a social security card, right? That's something in your wallet that you can look at and it's a tangible connection between you and the government. If it were up to me, I would say like, okay, green, new deal, awesome. The job guarantee part of it or the, the income guarantee part of it or the a living wage part of it. Everyone needs a card in their wallet, you know, laminated piece of plastic that they can sort of say, you know, even if it's only a symbolic function to sort of say like, this is something you have from the government. This is a right, that you now have that you can exercise your, you have a, a protection that you don't have already. Well, with that, um, Steven Attwell, thank you so much for coming on money on the left. Okay, my pleasure. Thank you very much for having me. And, uh, if you're interested in this stuff, uh, public at work is available through the University of Pennsylvania press or, uh, on amazon.com perfect oil show. These fascists about a couple of hillbillies can do.
Speaker 9:
69:30
[inaudible] [inaudible] well, I'm going to tell you, you may be surprised people in this world. [inaudible]
Speaker 2:
69:45
hi, this is [inaudible]
Speaker 9:
70:13
[inaudible] [inaudible]
Speaker 2:
70:18
[inaudible].
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