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In fact, life for the US working class these days is shitty, and it’s not by accident, it’s by design. It was called the Reagan-Thatcher neoliberal consensus, and it was wrapped up with lots of high-flying rhetoric about this freedom and that dynamism and those flexibilities, but you don’t have to be that cynical to see it as good old-fashioned class war. It’s obvious who’s winning.

Yes. Back in the 1970s, the working class was winning. Working class wages were going up 3x faster than CEO wages. The average employee at an auto factory could afford a house, a car, a non-working wife, a college education for his kids, and a good retirement.

That had to stop. So a plan was put together by the U.S. Chamber of Commerce and Supreme Court Justice Lewis Powell.[1] This is the actual memo.[2] It's worth reading. Before this, businesses did not lobby much, except over narrow issues. This got the U.S. Chamber of Commmerce into lobbying for business vs labor on a broad front, with funding from big companies.

It worked. Near total victory over union power in the private sector has been achieved in the US. The 8 hour day, the 40 hour week, and the minimum wage have been made ineffective. Funded retirement plans are history. "If you want a vision of the future, imagine a boot stamping on a human face - forever." became national policy. Marketed as "individual rights" and "opportunity", of course.

[1] https://billmoyers.com/content/the-powell-memo-a-call-to-arm...

[2] https://d1uu3oy1fdfoio.cloudfront.net/wp-content/uploads/201...

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> That had to stop. So a plan was put together ...

Others have already addressed these specific claims, and I'll add that this whole way of thinking (where anything and everything is the outcome of shady "plans" being hatched somewhere) does not generally lead to a good understanding of social problems. But this is not to say that progress in working-class compensation hasn't clearly stalled since the 1970s. Part of the issue is of course that a lot of that putative income has been offset by the huge increase in healthcare and education costs. And that's probably something where policy interventions are warranted, if only to reduce existing market distortions that put consumers at a huge disadvantage.

> offset by the huge increase in healthcare and education costs

These costs increase to the maximum amount the individual is willing to sacrifice to obtain these services. Because they are inelastic services - you cannot substitute healthcare. You can barely substitute education (esp. tertiary). And there's not a lot of economy of scale with these services, which makes it hard to lower the cost in competition (if there's even any).

> These costs increase to the maximum amount the individual is willing to sacrifice to obtain these services.

Individuals do not pay for healthcare services, many do not know the actual true costs.

Individuals in most cases do not pay - insurance companies do. This explains the high costs moreso than your example,.

I wonder where the insurance companies get all this money...

They get the money from individuals who are not using healthcare. That's the point.

Insurance companies minimize payouts to maximize profit - but they offer coverage that they often can't control the price of. It becomes a business negotiation between the hospital and insurance company.

The actual patient and the services rendered are many times irrelevant. If pricing was based on individual consumers you would see that reflect in pricing - no one would overpay for a cotton swab, for example.

> They get the money from individuals who are not using healthcare.

:thinking-face:

That's weird, I use healthcare, and yet I still pay monthly premiums. Can you explain why I don't fit into your explanation?

Food is even more inelastic than healthcare, why does it not see the same increase?

because food production is much more scalable and competitive imho.

What till you see climate change decimate food production, and you will see how inelastic food is, and the resultant price increases will be eye watering.

We see in areas where healthcare is completely private or more private - that services get better and cheaper (plastic surgery and dentistry). So the claims about scale and competition don't really hold water as something inherent to the service. In fact it becomes more apparent that the government regulation is creating the shortage.

> you cannot substitute healthcare

You can. For every health condition, there are a wide range of options varying in cost, efficacy, risk, time and pain.

I recently went to the doctor over a problem I have, and got a rather broad array of options. I decided the risks of each option were worse than the problem, and decided to live with it.

The notion that there is a one-to-one mapping of problem-to-solution is incorrect.

> You can. For every health condition, there are a wide range of options varying in cost, efficacy, risk, time and pain.

Broadly speaking: if you experience dire medical trauma — say you have a heart attack or get in a bad car accident — you need emergency care or you’ll probably die. If you have cancer, you need to treat it or you’ll die. If a vital organ stops working, you need to find a functional replacement or you’ll die.

You may have multiple options for treatment, or you may not. But for many health conditions, the choice is ultimately binary: treat your ailment or die. That sounds to me like a service that cannot be substituted.

Cancer, for example, has many treatment options available. So does a heart attack.

Besides, emergency conditions (being transported to the hospital in dire condition in an ambulance) are not at all where the vast bulk of health care is.

> has many treatment options available

is there one that's cheap? Can i buy an aspirin pill for cancer?

A substitute is not the same as options - a substitute implies lower cost but does the same job. Chicken is a substitute for beef (which is generally more expensive). Therefore, beef cannot become _too_ much more expensive than chicken, as people will just opt to buy the chicken.

But if you have cancer, and each treatment still costs thousands per visit/session, then they are not substitutes.

For cancer, your options are:

1. radiation

2. chemo

3. surgery

4. some combination of the above

All have their pluses and minuses. Sometimes people with terminal cancer opt for no treatment, as they'd rather enjoy a shorter time than have a painful longer time.

The notion there is no choice is simply incorrect.

Generally, only a pretty specific mix of these will yield a beneficial result. There are inoperable tumors, there are patients that will not withstand chemotherapy, and radiotherapy of a tumor too close to a critical organ will also not suffice.

Usually these treatment options would be weighed by a board of experts from the different medical fields involved, taking into account the individual patient's constraints.

I don't really see how you come to the conclusion that there is much of a choice for a cancer patient. It's not like you can tell the tumor board "I want surgery" when that's not a clinically viable option. And it's also not like any of these options is particularly affordable - any of them will easily bankrupt someone living from paycheck to paycheck. Heck, the MRI scan alone can.

It's still pretty binary between "get reasonable treatment costing tens of thousands or die", as the other poster pointed out.

> I don't really see how you come to the conclusion that there is much of a choice for a cancer patient.

Because I know several people who've had dire cancers, and they all had choices and made choices among the treatment options.

Indeed. Additionally, CAR-T therapy and vaccines are peeking over the horizon.

Yes, the cancer treatments vary in price. Even more so if you take the associated care into consideration: you can have a customized, personally adjusted treatment costing many times more than the (same ingredients) basic protocol.

Usually, no. But in this case, yes. This plan was amazingly effective in increasing the power of big business over government. Realize that from the New Deal through the 1970s, about 40 years, there was an adversarial relationship between big business and the government. That was viewed as the proper role of the government, as a counter to economic power. That was a core principle of the New Deal.

That memo, the U.S. Chamber of Commerce, and the Business Roundtable, turned that mindset around. It took a lot of time, effort, and money. It created many organizations. Conservative think tanks came from that effort.

You are making extremely strong claims with fairly weak evidence. The memo is a call to action for businesses to _catch up_ to the large lobbying influence created and wielded by unions in the 60s. As someone who moved to America to flee a totally barren economy run by labor unions, I am glad the business groups were able to rise to the challenge here. I simply don’t read the same vast conspiracy in the memo that you imply. In the early 70s, left-affiliated groups like SDS and Weathermen were probably producing internal organizing notes that read as equally self interested and myopic.

Another weakness in your grand theory is that across housing, cars, single incomes, and retirement, many of the affordability concerns have just as much to do with non-corporate organizing as corporate organizing. Since when did the Fortune 500 coordinate to jack up tuition? Which S&P companies run local planning boards? Low income households in other countries can afford decent housing stock and higher education. Corporations aren’t the reason our low income residents can’t. As a quick point, this isn’t a mere matter of a shrunken state either, since our government spending as a % of GDP has steadily risen: https://en.wikipedia.org/wiki/Government_spending_in_the_Uni...

The increase in college tuition has been driven by the colleges’ boards of directors, comprised of corporate leaders who forced a move away from faculty governance by installing corporate management in university administration. Which demands C-level salaries.

In addition, you’ll find many of the board members come from the local construction companies, who then win the contracts for demolishing and constructing new university buildings.

In principal, this is all driven by the competition for consumers, I mean students, who are hyper-focused on college ranking prestige in the name of future employment with, well...

Out of curiosity, which “barren economy run by labor unions” do you speak of?

I would rather not say because it'll spur an entire subthread arguing over whether the root cause was unions, state corruption, foreign intervention, or any other host of plausible (or not) theories.

I will concede that other people may explain that country's economic failures differently than I do. However, my view is not a fringe one, and since I have left, decreasing worker power has been correlated with a period of relative growth for the middle class.

I've made the jump in the other direction: from an almost-US-style hyper-capitalist country to relatively social democratic countries (first Austria then Germany) & my life here is astonishingly better than in my country of origin (level of economic development is similar, in fact I'd probably be earning more in the country I was born in while paying lower taxes).

So whose anecdotal evidence do we take, yours or mine?

I suggest that you work two 400 Euro "jobs" in two different bakeries simultaneously in Germany and report back after a year.

That wouldn't be legal. There is a minimum wage of 9,35 Euro per hour in Germany. You cannot legally work more than 48,13 hours per month on a 450 Euro mini job in Germany.

I used to speed every day on my way to my under the table construction job. What's legal and what happens are different things.

I assure you such & worse also exists in my home country. It's true that the German speaking countries still have a lot of issues, but it's also true that it's much worse in the more economically right-wing countries.

I was not making a universal claim, so your experience does not contradict my point.

What is your point (asking earnestly)?

My point is that the fates of the working class cannot simply be explained by the US Chamber of Commerce deciding to lobby for themselves in 1970 or the economic organization that might represent. For one, many ailments of low and middle income families can be explained by citizen lobbies: healthcare employs a lot of people, neighborhood groups are famously exclusionary.

You are making a strong claim with fairly weak evidence.

Considering that your anecdotes are about four different countries, rather than two, your last paragraph is needlessly antagonistic.

That is pretty much how the 1970s are portrayed in the UK media - any vaguely left wing policy is usually derided with accusations that whoever is proposing it want to return to the 1970s.

Of course, like all good propaganda there is an element of truth to it but I believe the political situation of the time was a lot more nuanced that current portrayals would have you believe - Dominic Sandbrook's books are rather good.

e.g. Right wing accounts of the UK industrial failure usually omit the effect of absolutely awful senior management in the lot of industries. Of course, left wing account similarly fail to mention the appalling behaviour by some unionised workers.

The astounding thing about the stock rightwing 1970s unions-caused-inflation narrative is that it completely ignores the role of oil price shocks.

Without renewables, oil was an absolutely bedrock commodity, directly influencing the prices of energy and raw materials.

At their peak, oil prices increased by 400%.

But apparently we're supposed to believe that greedy unions were entirely to blame, and oil prices and shortages had no effect on inflation whatsoever. Because cost-push isn't a thing, or something.

> I simply don’t read the same vast conspiracy in the memo that you imply.

Even if it was a conspiracy it isn't obvious it is a conspiracy against the common good. The American economic system has been a powerful force for good in the world - America is a hugely popular migration destination because of their superior economics and the alternatives at the time of the letter were places like the Soviet Union, Maoist China or Europe re-emerging from the rubble of their failures to maintain order and prosperity.

They weren't talking about "Communists" who were advocating for "like, life sucks for the poor, man" or modern "fascists" who want less immigration. The communists had just finished killing millions of people and their signature accomplishment were some of the greatest mass famines in history. Everyone knew someone who died fighting actual militant fascists. A rational person would have been very interested in protecting the American economic system as one of the few shining lights of progress in 1971.

Your second paragraph makes an important point: when reading texts from the 70s it's important to remember that they're using "Communists" and "Leftists" to describe groups who, in the public imagination at the time, were extremely destructive and pervasive. Big cities had hundreds of bombings, weird leftist cult leaders would commit unequivocal crimes and get sympathetic, top-tier legal representation. These were not the relatively subdued Tumblr leftists or Scandinavian socialists of today, even after accounting for COINTELPRO distortions of the historical record.

A particularly striking example is the case of Lincoln Hospital in NYC which was taken over by a leftist group named the Young Lords that received a million bucks a year from the famously bankrupt city government to run a putative methadone clinic and Marxist education intensive. The details are a bit of an aside, but long story short the clinic had poor outcomes for patients, doctors dying of heroin overdoses, staff absentee rates in the 70%s, and about 4x more in spending per patient than city run hospitals. Yet it still kept getting funding renewed until 1978 through a variety of lobbying schemes. Some contemporary publications write of this medical failure fondly: https://filtermag.org/how-the-young-lords-took-lincoln-hospi....

You should source your claims, especially when they're heterodox. Calling the People's Program clinic a failure is pretty heterodox, and you've already admitted you have an axe to grind.

I have no axe to grind. Where did I admit that? Is it simply by saying that I've lived through regimes where worker power was itself a (if not _the_) problem? For what it's worth, I am generally on the left end of the spectrum; certainly economically if not socially.

You’re right - I should have offered a source. You can reference the extensive reporting here: https://www.penguinrandomhouse.com/books/307365/days-of-rage...

Calling Days of Rage "reporting" is hardly without controversy [1].

[1] https://monthlyreview.org/commentary/fictionalizing-radical-...

Your source generally disputes the framing of the book but not the facts. Do you have evidence that the facts I cited about Lincoln Hospital’s expenses, lack of accounting controls, and death and drug abuse rates among providers are incorrect?

Oh, it disputes a lot of the facts, too. So do at least some of the people who gave interviews to Burroughs, interviews whose content the interviewees later described his having misquoted or in places outright fabricated.

Do you have any reasonably sturdy evidence that the claims you made are correct? Until you can prove them, you have cited no facts, but only made claims. Those claims are yours to support. Asking me to prove a negative doesn't really accomplish anything in that regard.

Please point me to where in the article Dan Berger claims the book’s facts about Lincoln Hospital are wrong. Until then, I am inclined to trust the fact checking apparatus of Penguin Books over your vague suspicions. I’m not asking you to prove a negative; my claims about the hospital were specific, falsifiable, and straight from a book printed by a reputable publisher.

Nonfiction publishers have fact-checkers? That's new. (That is pretty new, and still quite rare: https://www.nytimes.com/2019/09/22/business/publishing-books...)

I'm still not sure why I should be regarding Burrough's account as more likely to be true to historical fact than all of the other accounts I've been able to find. If nothing else, he, and you, have got an uphill battle in convincing anyone that his account is right, and everyone else's is wrong. You don't seem to recognize that. Perhaps he does. You seem to be quite familiar with the book; maybe he's more willing to support the claim than you so far have been, and has something better to offer than simple assertion. If you don't want to go to the trouble of trying to find references of your own, why not at least copy out whatever on the subject can be found in his bibliography?

What do you mean by heterodox? I haven’t seen this word before — is it the same meaning as unorthodox?

Essentially, yes. The two words' connotations vary slightly.

Really compared to the PIRA the "leftist" organisations that did direct action in the USA are a bit of a joke.

And you know everyone is entitled to representation

As an aside - the IRA was itself a very left wing organisation - something that they didn't emphasise when collecting money in the US!

I remember stories of the office hiding the posters of Lenin when us donors visited.

We did a black cab tour of Belfast a few years ago and I paid for a book in the Sinn Féin bookshop with my debit card - no doubt getting my MI5 profile off to a good start....

You're missing the fact that, by the 1970s, the rate of US-caused murders and famines (abroad, to be fair) had far outpaced anything the USSR was doing [0]. Ruthless capitalist imperialism has been at least as destructive as any other imperialist style in history, if not more so.

The American economic system has always lived on the shoulders of the American Empire - with almost free access to exploit resources within and outside the US with little regard for human life, especially the lives of non-citizens (slaves, foreigners). Combined with public research being funneled into private hands, usually under the guise of military research (see the entire IT industry in the 1960s-70s, and bio-engineering today); and with vast subsidies, either direct or as government guarantees of financial products; the capitalist system owes much of its success to the vast power of the American state, and has never been successfully replicated in significantly weaker countries (though it has been tried time and time again, usually under American guidance).

Utterly ridiculous. Capitalist imperialism is certainly not without major issues, but comparing the harms to other imperial styles like colonialism is insane. Show me where US imperialism did anything comparable to the Holodomor or the atrocities of the Congo Free State.

Oh, there are many.

Look at the Banana Republics, entire countries ruthlessly operated by US banana companies.

Look at the numerous coups that the US orchestrated against democratic governments that weren't aligned to the interests: Iran (installing the Shah, arming him, convincing and aiding him to start a nuclear program), Vietnam, Nicaragua, Honduras, El Salvador, Cuba (unsuccessfully), Guatemala, Indonesia, and others.

Their support of/demand for Indonesian occupation and massacres in Timor.

Their support of Saddam Hussein's war against Iran (after the US-installed shah was deposed), including use of chemical weapons.

The numerous atrocities committed by the CIA all over Latin America, either directly or through the guerrillas they were controlling - in Nicaragua, El Salvador, Honduras, Guatemala etc.

The many war crimes against Vietnam, including slaughter of civilians, burning crops and forests, destroying civilian infrastructure and hospitals.

The unquestioning support of Israel's brutal occupation of Palestine, of Israel's possession of illegal nuclear weapons.

The direct support of Saudi Arabia's slaughter of Yemeni civillians, with arms, know-how, embargoes, and diplomatic means.

The long years of Black slavery in the US. Medical experiments on black troops. Forced sterilization of black men and women, and of those considered mentally unfit.

I'm not going to spend my time investigating and debating the relative awfulness each of those atrocities, but I think if you spent the time to dig in, you would see that there are pretty clear differences between the events you mention and the ones I did. It's simply untrue to say there isn't a difference between supporting horrible people and actively planning and executing a genocide.

I grew up somewhere that was a victim of both European and American imperialism and they really aren't comparable. Even in some of the Latin American countries worst hurt by American capitalist imperialism, I think it would probably be unfair to say that it was equal to or worse than what European colonialism did.

Oen thing is clear - Stalin was an unspeakably disgusting human, and his regime committed atrocities that few have equaled (Hitler beeing among those select few). I am not arguing against that.

However, what the USSR did after Stalin is usually much milder than what the US did to their client states. It's true also that at least some, but most likely all, of the European colonial empires were atrocious as well. Discussing the relative merits of each disgusting atrocity is hard.

Still, the things that the US did in Latin America and Asia are absolutely on that level of human misery. Tortured children, imposed famines, indiscriminate killing, use of systematic rape as a form of punishment/deterrence, forced labor, ethnically motivated power structures, deliberate destruction of democracy and of the industrial power of some of these countries, the whole shebang.

So perhaps it would be unfair to say that it was worse than European colonialism, but it was certainly equal (though I fully admit, not as bad as Stalin: Probably worse than any later USSR leader)

For a start:

https://en.wikipedia.org/wiki/Contras#Atrocities

https://en.wikipedia.org/wiki/Indonesian_mass_killings_of_19...

Vietnam and Iraq are two that are very easy to bring to mind and widely known. Hundreds of thousands of people killed in and near their homes thousands of miles away from the U.S. for no real discernible reason.

There are, of course, hundreds of other examples.

You think the Iraq/Vietnam wars are comparable to the Holodomor or the Congo Free State?

Indeed. In fact, I just compared them.

Vietnam, Indonesia, lots of Latin America in the 1980s? The US was also an actual colonialist power in the Philippines.

The book Lobbying America details the history of Business Roundtable and replacing The New Deal with Reaganism. https://www.goodreads.com/book/show/17942038-lobbying-americ...

Sure, course corrections are always needed, but there's no denying the oversteer of the neoliberal policies since. We've learned a lot since the 70s and it's probably productive to update our mental models and worldview.

> Since when did the Fortune 500 coordinate to jack up tuition? Which S&P companies run local planning boards?

Since those large corporations funneled money and influence into parties and institutions that work tirelessly to cut government budgets and make the PR argument that government can never be employed to solve problems.

You’re saying this sarcastically but there is in fact a direct link between corporate power and politics at all levels.

Figure 1 on pdf page 10 of [1]

[1] https://scholar.princeton.edu/sites/default/files/mgilens/fi...

If you think political takeover is so easy, then certainly the entire structure of the republic should be blamed. Why do we blame corporate lobbying and not the electoral college or bicameral legislature? At the minimum, it seems much more important to fix the latter than the former.

Those political systems are blamed.

Not up til this point in the thread.

So? People do blame those problems outside of this discussion. Calls to abolish the electoral college began in 2000 and have only snowballed since 2016. Does every thread have to encapsulate each facet of society at large?

This thread began with a bold claim about the causes of change in worker power. I challenged the poster to provided evidence commensurate to the claim. I was responding to someone who failed to provide sufficient evidence. You seem to be making an unrelated point. Perhaps start your own top level response?

Your entire argument is based on a series of false equivalencies and misdirections.

The SDS and the Weathermen had almost no mainstream political influence relative to the business lobby, so obviously they can’t be compared in this way. Public college administration increasingly became corporatized and managed by the same business interests. Elite universities always have been. Local planning boards are captured by the wealthy in their communities. The economic trouble was driven by the oil shock, not high rates of unionization. Many countries in Europe have high rates of unionization and are not in anyway “barren.”

>> Back in the 1970s, the working class was winning.

On the other hand, There was a heroin epidemic, crime was skyrocketing, white flight was draining our cities of tax dollars, pollution was terrible, we had lines for gasoline

Not to mention US engineering and manufacturing started to decline. American started getting lazy and Japan started entering markets with superior products, soon to be followed by China and Mexico, ready to pounce with cheaper alternatives.

The 2010s/20s had an opioid epidemic - funded by big pharma, so that's okay, I guess. Today corporate crime is endemic (ask the people involved in Greek bonds and 1MDB.)

500,000 people are bankrupted by the health care system every year, carbon pollution is literally endangering the entire planet, the US has some of the lowest educational standards and poorest social mobility in the developed world, and the US establishment solution to a relatively straightforward health threat like Coronavirus is an ongoing fiasco.

And... the lines for gasoline were caused by OPEC constraints on gasoline, not by feckless poor people agitating for their rights.

... Are you blaming labor unions for the oil embargo?

Alan Greenspan, the economic "Godfather" of this era, viewed growing working insecurity as a positive development and expressed dismay that it may not continue indefinitely [1].

EDIT: Removed suggestion that Greenspan publicly expressed a specific intent to foster worker insecurity.

[1] https://chomsky.info/20120508/

[2] https://www.federalreserve.gov/boarddocs/hh/1997/february/te...

FWIW, the quote and interpretation as presented in your link is rated a “pants on fire” lie by Politifact: https://www.politifact.com/factchecks/2014/jul/21/facebook-p...

>Chomsky’s take on the substance of what Greenspan said seems reasonably on target.

Read the entire thing. It's not quite "pants on fire", its just not an exact quote. OP posting "explicitly" is incorrect since it's from Chomsky, however.

Chomsky and the original poster imparted a connotation which is simply not present in the original text.

Fair point. Chomsky has a tendency to exaggerate, but it's a difference of degree.

"Continued low levels of inflation and inflation expectations have been a key support for healthy economic performance...Looking ahead, the members of the FOMC expect inflation to remain low and the economy to grow appreciably further. However, as I shall be discussing, the unusually good inflation performance of recent years seems to owe in large part to some temporary factors, of uncertain longevity... Atypical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity... The low level of work stoppages of recent years also attests to concern about job security. " [1]

It is telling that Politifact left out that last sentence in its analysis of Chomsky's statement.

[1] https://www.federalreserve.gov/boarddocs/hh/1997/february/te...

"Insecurity" in that quote is describing a perception on the part of workers which, the quote discusses, doesn't seem to be validated by actual job market data. In particular, Greenspan is offering it as a reason why there isn't as much wage inflation given the relative tightness of the labor market. He says workers aren't changing jobs to capture increases because they'd rather stay put.

It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. A related, worthy question is why increasingly lower unemployment rates in the 90s (and even the 2010s) didn't show up in the Phillips Curve predicted increase in wages. My read of this quote is Greenspan speculating at an answer. I don't know if it's correct. I don't even know if economists today agree on an answer. In any case, he certainly doesn't seem to be cheering for precarity.

> It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any.

Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. [1]

The answer to your puzzle may be that employers have become a lot better at bargaining, lobbying, and union suppression than they were a few decades ago. It may also be the case that the government has become better at maintaining a high enough level of unemployment (through monetary policy) to prevent workers from gaining too much in a boom economy.

[1] Any of the tech folks on HN try asking to not be subjected to an open office hell, prior to this COVID thing? How great of a bargaining position did the software-engineer shortage give you in that conversation?

> Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies.

Noting that this was in 1997, this is basically the same point Greenspan was making - he is speculating they felt insecure and so weren't willing to do things like go on strike. It seems a reasonable theory although it's difficult to test if it is correct or not.

Either way, it most certainly doesn't indicate that Greenspan saw this insecurity of workers as a goal.

So, to make a different criticism from Chomsky, I will note that regardless of whether insecurity of workers is an end goal, an explicit goal of the fed is to maintain 'low' but non-zero unemployment. This, at least, is well-documented.

The left, naturally, points to that as an example of how the government is actively taking steps to depress the labour market (during good economic conditions).

Would you find that criticism to be more on-the-nose than Chomsky's claim?

> an explicit goal of the fed is to maintain 'low' but non-zero unemployment. This, at least, is well-documented.

> The left, naturally, points to that as an example of how the government is actively taking steps to depress the labour market (during good economic conditions).

I'm left leaning and I'd say anyone who thinks zero unemployment should be a goal is naive and uniformed.

Zero unemployment means for example forced employment of unmotivated employees, and zero market dislocation from geographic mobility.

https://theconversation.com/why-the-unemployment-rate-will-n... is a good discussion of this.

There are many unemployment rates. Generally speaking, the unemployment rate that we are talking about in this thread is 'What percentage of people who are actively looking for jobs can't find jobs?'

Getting it to zero does not require any forced employment, or any restraints on geographic mobility, or babushkas with home scales weighing you for five kopeks at the entrance to the Leningradski railway terminal.

No that’s not the unemployment rate we’re talking about, because you are using it to critique Fed policy, and that’s not the Fed’s definition of unemployment rate.

The Fed’s goal is in fact to promote maximum employment, and a non-zero unemployment rate is necessary for that: https://www.federalreserve.gov/faqs/money_12848.htm

Related to the discussion on insecurity, it is a good outcome to have an economy where people quit jobs and spent months on a careful job search. 0% unemployment means that nobody does that.

The link fails to argue for why it is necessary for that. Instead, it just says that's the fed's mission.

> it is a good outcome to have an economy

It's a good outcome for employers, not employees. If I can quit my job in the morning and get one I'm happy with before lunch, that's good for me - but it also means that employers are desperate for labour.

A sober, careful, multi-month job search is not a good thing for most people. They can't afford it, because they have bills to pay this month, not next year.

> It's a good outcome for employers, not employees. If I can quit my job in the morning and get one I'm happy with before lunch, that's good for me - but it also means that employers are desperate for labour.

> A sober, careful, multi-month job search is not a good thing for most people. They can't afford it, because they have bills to pay this month, not next year.

Your first case (quit and get a job before lunch) is bad for the economy because it means production is constrained by the availability of labor. That is bad for employees even in the short term because it forced employers to find alternatives.

I agree a multi-month job search is a bad thing, and I absolutely agree that avoiding that should be a goal of economic policy. Low, non-zero unemployment addresses this well: if there are many people spending multiple months on job searches then unemployment rises.

Production being constrained by the availability of labour doesn't mean one whit to me. I don't benefit from increased national production. The overwhelming majority of my expenses go towards things that aren't constrained by national production.

Employers always want to find alternatives to paying people for their labour. That's also not my problem.

It's an incredibly weird argument to be making. Employers need a thumb placed on their side of the scale, because otherwise... The country will produce fewer goods then it otherwise would? And because otherwise, they'll seek to reduce their costs, by employing fewer people? They are always motivated to do that anyways, and they are in a much worse position to do it than if they could trivially fire and replace their workforce, and if they are slower at accumulating profits.

Plausible. Do you know if healthcare, higher ed, and housing are industries where cost trends are convincingly explained by neoliberalism, i.e. some combination of deregulation and promotion of free trade and free markets? Or are you saying that the problem of affordability in these sectors can and should be entirely resolved by higher wages?

Well, all three are heavily subsidized by the government, so I would argue it is the opposite of the promotion of a free market and deregulation.

I wouldn't blame education costs or housing costs on neoliberalism, I'd blame them on availability of low interest, little down credit for housing and student loans. Which, while being a bit of a neo-liberal policy is not a cornerstone of neo-liberalism (nor is even controversial among the left, much to my chagrin).

Medical care is, of course, it's own awful mess.

Higher wages wouldn't fully solve either problem on a society-wide level. If you chang nothing else, I'd expect that costs of all three would rise until they soak up every spare penny of the middle class.

It's absolutely "pant's on fire" level of misleading to label a fairly reasonable attempt at root cause analysis as a goal by anyone.

I can say "the rise in house prices before 2008 appears to be mainly the consequence of permissive loan policies by banks" without meaning that I think either high or low house prices or permissive or non-permissive loan policies are good or bad.

I see this quite differently. Yes returns on capital have blown up, while working and middle class incomes have stalled. This is a real issue and is driving a lot of problems across the developed world.

I just think the factors behind this are somewhat different from the usual class war rhetoric - on both sides. I think the first effect is the introduction of hundreds of millions of workers in developing countries. China obviously, but also South Korea, Taiwan, also India particularly in financial and IT services. This has created a lot of downward pressure on labour prices in the developed world.

I think another effect is the property market sweeping up huge swathes of individual wealth and income. By and large there's a limited stock of desirable property. We all need a place to live, and when we have families and children we want the best home we can afford for them and us. That means increasing proportions of our wages have been spent in a bidding war against each other over the available housing. Certainly here in the UK this is a huge problem. Massive state subsidies to help new home owners get into property has just exacerbated the problem, hugely inflating the price of low and mid level housing particularly. Preferential tax treatment of property investments (in the UK anyway) also encouraged huge numbers of people to invest in property and become landlords.

I'm no economist so maybe I'm overestimating these shifts because I've seen and felt the effect of these factors personally, but I'm convinced they're having a considerable impact. On developing world labour I'm not sure much can be done about that, these people deserve jobs as much as anyone. I think things will even out though, I go to China regularly and wage growth over there has been staggering. As for property prices, it's about time we took a close look at the tax treatment of whats essential rental income and also inheritances. I think there's a shift needed favouring income from labour over capital. Don't get me wrong, I'm a thoroughgoing capitalist, but there's an imbalance there that needs redressing without resorting to class war eat the rich crap.

> Yes returns on capital have blown up

This hasn't happened. Rising incomes in the upper-middle class and above since the 1980s are largely driven by labor income in highly skill-biased sectors. (You'd think that the HN crowd would be rather familiar with this whole dynamic, but apparently not.)

OK, interesting. I'll have to look into that.

You're right that governmental attempts to artificially make things more affordable ends up blowing up the costs. For example in the US, education and health care.

Prices for things with no government subsidy or interference have dropped to essentially zero - like software.

You're right that governmental attempts to artificially make things more affordable ends up blowing up the costs. For example in the US, education and health care.

The "Law of Unintended Consequences". This constantly trips up well-intentionend people who support government interference in markets. Their goals are noble, but quite often the outcome is the exact opposite of what was intended.

>Marketed as "individual rights" and "opportunity", of course.

This is what happens when the concept of "individual rights" is directly substituted for the "individual right to choose what you consume" without any regard for any other individual rights, even those which are supposedly hallmarks of the U.S. like voting rights. The more I think about this, the more I'm reminded of Chomsky's Manufacturing Consent.

Precisely... for example, how about the right to privacy? It feels practically non-existent in North America (not so sure about elsewhere). As far as I've observed, it's essentially ignored in the vast majority of situations, to the degree that people treat you like you're paranoid if you even raise the subject.

> Back in the 1970s, the working class was winning

The working class today has higher wages and a higher quality of life.

If you’re a woman or any kind of minority, things are vastly better for you than in the 1970s. If you’re skilled, things are vastly better for you.

Unskilled white man labor was going to decline no matter what Reagan and Thatcher did as computers and automation changed production across the world.

So, requiring two adult humans in a single household to work to be able to live comfortably, whereas before required only one, that is progress?

The percent of one person households has nearly doubled since the 1970s, so the increasing household income is even more impressive.

Your belief is opposite reality.

https://www.census.gov/library/visualizations/2019/comm/one-...

If you want to live with the same standard of living as in the 1970s, it doesn't require two people to work.

Thanks for sharing those articles. The [1] article says that business lobbying and campaign contributions ramped up in the 1970s as a response to the Labor movement. The advent of television meant that politicians could spend money to get elected. This shifted power to Business groups, who could out-spend the Labor groups.

If you want to learn more, I really enjoy listening to Mark Blyth talking about the history of this stuff. He's really funny and has an incredible amount of knowledge and data to tell the story.

I think its too simplistic to say the system we had before Reagan/Thatcher was Good and the system now is Bad. But we are definitely seeing the shadow of the neoliberal capitalist system hurt people. And causing large scale social unrest, economic uncertainty, a generational wealth gap, and so on. Apparently some people are angry enough about the whole thing to vote for Trump just to get the neoliberals out of the white house.

And of course, the democratic process should be forcing the government to correct course, but there's been so much capture by lobbyists and wealthy donors that its absolutely failing the people its supposed to serve. Occupy Wall Street, the 2009 economic crash, etc seemed to have no lasting impact on economic policy.

This whole situation seems so central to the current economic and political situation - I don't understand why nobody knows and talks about this stuff.

https://www.youtube.com/watch?v=KGuaoARJYU0

People tend to have a rather skewed memory for the Thatcher years in the UK - they weren't a time of any unusual growth in GDP:

https://tradingeconomics.com/united-kingdom/gdp-growth-annua...

Mark Blyth is great and he's humorous. I really like his quick history of US neoliberalism.

https://youtu.be/8rxrjhWTdv8

I watched the whole video. Excellent stuff. Thanks for posting.

I read the first 15 pages of the memo, and have to run to a meeting. I don’t think it’s the slam dunk you think it is. I largely agree with it, knowing what I do about the US in the 1970s. It may be that the system has swung too far in favor of corporations. Certainly, today’s wealth inequality is destabilizing and needs to be addressed. But that memo, by and large, seems reasonable to me.

Here is a recent discussion about "WTF Happened in 1971?" There are quite a few different opinions.

https://www.reddit.com/r/TheMotte/comments/hyh565/wtf_happen...

Wow this memo reads like a caricature.

This history of the Business Roundtable blew my mind. It's among Caro's The Power Broker and Howard Zinn's A People's History of the United States for clarity and myth busting.

Lobbying America: The Politics of Business from Nixon to NAFTA https://www.goodreads.com/book/show/17942038-lobbying-americ...

"Lobbying America" tells the story of the political mobilization of American business in the 1970s and 1980s. Benjamin Waterhouse traces the rise and ultimate fragmentation of a broad-based effort to unify the business community and promote a fiscally conservative, antiregulatory, and market-oriented policy agenda to Congress and the country at large. Arguing that business's political involvement was historically distinctive during this period, Waterhouse illustrates the changing power and goals of America's top corporate leaders.

Examining the rise of the Business Roundtable and the revitalization of older business associations such as the National Association of Manufacturers and the U.S. Chamber of Commerce, Waterhouse takes readers inside the mind-set of the powerful CEOs who responded to the crises of inflation, recession, and declining industrial productivity by organizing an effective and disciplined lobbying force. By the mid-1970s, that coalition transformed the economic power of the capitalist class into a broad-reaching political movement with real policy consequences. Ironically, the cohesion that characterized organized business failed to survive the ascent of conservative politics during the 1980s, and many of the coalition's top goals on regulatory and fiscal policies remained unfulfilled. The industrial CEOs who fancied themselves the "voice of business" found themselves one voice among many vying for influence in an increasingly turbulent and unsettled economic landscape.

Complicating assumptions that wealthy business leaders naturally get their way in Washington, "Lobbying America" shows how economic and political powers interact in the American democratic system."

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