David R. Henderson  

Reflections on Competing Visions

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To Cut or Not to Cut?... When Doesn't the Law Matter?...

After my discussion this morning on KQED, I had an "aha" moment. It was when Craig called in at about the 40:40 point and the ensuing discussion, first by me, then by Sylvia Allegretto.

Craig said that he has a Masters' degree and a teaching credential and he's unemployed. He said he would take a job, "any job." But, he said, the fact of the matter is that "when someone comes into a Wal-Mart with my resume, they say, 'Why are you here?' and I say, 'Well, I need a job.'" Then, according to Craig, they tell him they're not interested. Krasny even prompts him by putting words in his mouth about how he's overqualified.

In the moment, when I heard Craig say this, I had the idea that he was saying he had actually tried to get a job at Wal-Mart. Now that I've listened to it, I don't think he was saying that. I think instead that he was speculating about what a Wal-Mart person would tell him. Thus the term "when someone with my resume" rather than the simpler "when I."

But that's not the aha moment. The aha moment was in noticing the difference between my approach, on the one hand, and Michael Krasny's and Sylvia Allegretto's, on the other. I thought I heard a man who was frustrated at not finding a job in which he could use his professional skills--thus his opening statement about being angry. I thought of the fact that in the mid-1990s, my wife and I had paid a tutor for our daughter $30 an hour. I know that was the high end, but with the inflation since then, it's probably about the middle. So that's why I suggested that he consider advertising as a tutor. I was trying to help him solve his problem. For millions of people to get jobs, those same millions must, one by one, solve similar problems.

But then Krasny asked Sylvia, with a little laugh, whether she wanted to give her suggestion. I think Krasny's laugh said a lot about his attitude. I think it said that he thinks we aren't really there to help people solve their problems and that instead it's about advocating large-scale government programs. Then Sylvia said. "The problem is that we have millions of people like the caller. So that trying to be a tutor, to work on your own, to be self-employed, which a lot of people do try to do, is really not the answer." Wow! It's not? He couldn't find a job? Yet, she wasn't saying that. She seemed to be saying that maybe he could but she didn't care about him. She cared about millions of people as a mass, but not as individuals. It reminds me of a slogan that I saw on a T-shirt in the 1960s, "I love humanity; it's people I can't stand." Well, I love people.


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CATEGORIES: Labor Market



COMMENTS (13 to date)
Nick writes:

Dr. Henderson,

Big fan of your blog, but to be frank your rhetorical style on the radio seemed a bit ham-fisted. I agreed with most if not all of your points, and I think they were sound logical arguments, however I can see why the woman said she was offended. I also think jumping down her throat for clumsy phrasing didn't really make you come off any better either.

When I watched films of Milton Friedman debating someone, he is always careful to explain how people are being harmed by the system he opposes, he never comes off as putting the blame on the people for taking a hand out. It seemed like you eventually started to get around to that point, but by then it was about the third go-round on the topic and clearly you had lost the war, the callers and other guest had you pegged as the blame the "lazy welfare queens" type of guy.


These are my views as a listener, hope you find them helpful and not too offensive.

Jon Leonard writes:

It may be regional, but $30 is far from the high end for tutoring now. I'm asking (and getting) $80 for high school math and science tutoring.

It can take a while to build a customer base, though. But the best way to start out is to volunteer at a local school, both for contacts and practice. It's puzzling on some level that I haven't seen a lot of additional volunteers when there are presumably more unemployed people with time to do volunteer work.

There seem to be a lot of unfortunate assumptions as to what's suitable work, and less entrepreneurial spirit than I'd hope for.

Doc Merlin writes:

I disagree with you David. I don't think monetary policy will be effective in increasing AD, because of changes in the monetary system have resulted in a small group being able to capture a lot of the upside from expansions in money.

The direct effects of monetary expansion on overall debt, however would still have an effect, but that doesn't raise AD so much as lower the debt burden.

Doc Merlin writes:

'When I watched films of Milton Friedman debating someone, he is always careful to explain how people are being harmed by the system he opposes, he never comes off as putting the blame on the people for taking a hand out. It seemed like you eventually started to get around to that point, but by then it was about the third go-round on the topic and clearly you had lost the war, the callers and other guest had you pegged as the blame the "lazy welfare queens" type of guy'

I have to agree with Nick, here. You have to go out of your way to explain how policy hurts individuals when you are dealing with leftists (and NPR is very leftist). I think you have gotten used to an audience on your blog that understands what you mean, and understands your language. I was struck when watching 'Free to Choose' how far Milton went to frame his arguments in the language of the left. It was really effective, and it is something I am also going to have to try harder to do.

Liam writes:

I have to disagree with Nick. I was actually shocked with the way the woman attacked David and I don't think it was merely clumsily phrased. Offensive and Ignorant?!?! Excuse me?!?! David was totally right to state that he had said nothing offensive and that she is welcome to disagree with him.

What I found amazing was how people kept putting words in David's mouth and claiming he said things that he hadn't. The one email comment asking if David was suggesting that highly educated people get jobs at Wal-Mart. And yet it was Krasny and Sylvia who said there are potholes to be repaired so the Government could create jobs doing that. Presumably with highly educated people that Wal-Mart won't hire. Oddly nobody was offended by that comment.

The one guy who David referred to who alluded he would take any job but Wal-Mart won't hire him. Maybe this is just me but I have 4 completely different resumes that I use depending on which type of job I am applying for. But I don't rely on a resume to get me a job. David was spot on when he said it's a personal choice not to work lower paying jobs. And for what it's worth, my Father-In-Law is highly educated and ran a successful small business and he now works at Wal-Mart as a shift supervisor. People who want to work, work.

You're right, David. That guy never applied at Walmart.

Matthew Gunn writes:

The biggest thing that I missed from the debate was a greater emphasis on Schumpeter's creative destruction.... that the recession involves a lot of people working in industries such as real estate, construction, and finance where the jobs are NOT coming back! In this case, unemployment checks are not the answer.

It even goes beyond those industries. Just an anecdotal example, Stanford B-School let go a number of librarians in the downturn as a cost cutting measure because of the switch towards online content. They could have been let go years ago, but it took an economic downturn and budget pressure to trigger the recalculation. This is consistent with an augmented version of basic producer theory where firms also have consumption. When firm survival is under pressure, firm consumption is cut (eg. charitable giving, generous but unnecessary compensation, etc...) and the firm moves closer to its pure profit maximizing model.

Anyway, the biggest thing I heard from the callers and the other guest was an opposition to change and a desire to collect unemployment until the world returns to how it previously was. To the extent a recalculation across the economy is taking place, unemployment checks merely delay the inevitable.

The other guest was framing the debate as:
1) Her: Unemployed get unemployment then something similar to their old job back.
vs.
2) Henderson: Work at Walmart.
(and unfortunately, I think she was getting away with it.)

The idea of creative destruction makes it clear that for many, (1) is untenable because the job isn't coming back! The world has changed. Henderson's advice to the caller to try tutoring was key... how do you use your current skills in the new economy?

David R. Henderson writes:

Thanks, Liam and thanks, Jon Leonard, for the update on tutoring rates.

To Nick,
First, I'm glad you're a fan. Now, to the Milton Friedman point. I aspire to be like Milton in the way you suggest. Here's my suggestion, though, about how to get a fair comparison.
1. Relisten to the piece using a stopwatch. Time how long the NPR reporter gets to give her Keynesian view of the world, with zero acknowledgement that this is a controversial view. To take one example, not everyone says that the way to get out of this is to increase consumption.
2. Then, using a stopwatch, time how long Sylvia gets to make her case. Notice how many questions Michael asks her that help her elaborate her view of the world.
3. Then, using that same wellworn stopwatch, time how long I get to make my case.
4. Finally, go back to any Friedman interview and see how much he is deferred to, see how long he gets to make his case, see how often he is in a situation where he is up against both a host and another interviewee who share the same statist view of the world and he gets less time than the other interviewee does.

In my experience on NPR, this is what I'm up against when I accept a gig with other interviewees. Also, although this didn't happen yesterday, it often happens that after the pre-interview the day before, I'm told that I'll be on with person X. Then when they call me the next day, I find out that there are both person X and person Y, both of whom share most of the same statist view of the world. I could wait until I get the same kind of offers that Milton got. I choose to take these offers. Good call? I'm not sure.

David R. Henderson writes:

@Matthew Gunn,
Good points well made. I should have taken a cue from Arnold.
Best,
David

Matthew Gunn writes:

@liam
"What I found amazing was how people kept putting words in David's mouth and claiming he said things that he hadn't."

I find that people are rarely TRULY listening. The world is a complex place, and people pigeon hole what they hear into previously defined categories.

For example, after some left wing listeners hear David say "Walmart" and that unemployment checks increase unemployment, they instantly put David in the pigeon hole of "heartless conservative bastard" and ascribe to David all their stereotypical views of a "heartless conservative bastard."

It raises an interesting debate question though... how do you conduct yourself in debate when people have all kinds of preconceived notions and are only casually listening. How would a quantum physicist debate a believer in Newtonian mechanics if the audience was also watching TV and couldn't follow any of the math?

Nick writes:

Dr. Henderson,

No stop watch needed it was extremely apparent that you got shafted for time.

One question, if you are still reading comments on this one. The host asked to prognosticate on the recovery. I imagine as an economist you get asked this frequently. Do you always give an answer? I have always found it odd that an economist will never answer "I don't know what will happen" or "It's unlikely anyone knows/could know what will happen". Not to say your opinion isn't based on evidence, just wondering.


RL writes:

I think you're right DH. You want to help individual people (and I know this, as you've offered to help me) and they want to save humanity. And we recall what HLM said..."The urge to save humanity is almost always a false front for the urge to rule."

David R. Henderson writes:

@Nick,
I do get asked this frequently and I answer, over 70% of the time, words similar to the ones you suggest. Good point. On this particular one, I have a little more confidence and so I answered. When I am asked what will happen to the stock market, I answer that it will fluctuate.

@RL,
Thanks. I thought I might be biased in favor of myself on this but while I was writing this post Tuesday night, my wife, who is sympathetic to my views but doesn't share them totally, almost gasped when she heard Sylvia say, in so many words, that this guy getting a job wasn't the solution. That's when I realized I was on to something.

Jake Russ writes:

David,

I'm glad you elaborated on this point from the end of the hour because Sylvia's words made me furious.

You calmly suggested to the guy that he be proactive about his joblessness. Create something for yourself, be it tutoring, whatever. Even if it's just temporary.

To hear Sylvia argue that he should instead sit back and wait until someone else "creates" a job for him... that idea is ludicrous.

If we all sit back and wait to for *someone else* to create our next source of employment, we’ll be stuck like this for the next decade, or more. It's always someone else's responsibility, never our own.


Side note: I agree with the others that some of the points you made were less effective due to the way in which you chose to phrase them. I do however want to refrain from being overly critical of your performance since this was the first time I've heard you speak. An N=1 is no place for judgment.

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