This time is [not] different, but where's that Wile E. Coyote Moment?

[alice wellintown]

Right now, in the US, the key trade-off is a fundamental one:
inflation or employment. One of the reasons I like Bernanke is that he
has put emphasis on employment. The Fed mandate has three parts, but
for decades, and especially after Volker,  the Fed has focused on
inflation or price stability and ignored employment and interest rate
stability. The US has a below average natural unemployment rate
((5.9%) when compared with OECD, where the average is around 7%.   In
Spain this rate is 11.85 and in Poland it is 14.5%. The rate is higher
in Germany, France, Italy, Canada, Sweeden, Ireland, lower in Mexico,
Korea, Luxemberg, Austraila and the UK. Some economists, including
Krugman and Benernake, think that the persistantly higher European
rates are caused by government policies and unions, together these
cause higher structural unemployment, that is, unemployment, even
during peaks in the business cycle, remains high in specific labor
markets because there are not enough jobs at the current wage rate.
Organized labor, through collective bargaining, acts like a high
minimum wage, and leads to structural unemployment. In the US,
however, where Labor is nearly dead, this influence is less than in
Europe. Moreover, what is called the natural rate of employment has
shifted in dramatic ways here in the US, and this has kept
unemployment low. So, before the Great Contraction, the US had a 4.6%
unemployment rate. This rate includes a 16% unemployment rate for
teens, an 8% rate for those under 25. And, a 10% unemployment for
African Americans. Women comprise a steadily increasing percentage of
the labor force, and are more skilled and educated, more productive
than their sisters in the 70s and 80s, and, they work for lower wages,
the workforce is also aging, so low skilled youth labor is also a
smaller percentage of the labor force. Thus, the natural rate of
unemployment in the US is and has been declining post-Vietnam. From
this alone, and there are other factors, like the fact that the
demographic shifts here in the US are not only taking place in the age
of workers, in the sex of workers, but also in the skill and
education, and race and ethnicity of workers, and all these work to
weaken labor. Of course, capital is quite powerful and can influence
government policies, at the State and National level, and, while it
still has to fight labor in some States, labor is losing the battle,
has no party to protect it. Look at teachers in Chicago, where, of
course, the President and his man are weakening labor with race to the
top and laws that prevent strikes and all the rest. CTU is a test case
for American Labor, and although it seems to have taken a small
victory, in the near future it will be crushed. So, how do workers get
their share? Not the old fashioned way: organize and strike or occupy.
These won't work. There is, unfortunately, no solution, no counter to
the force of American Capital. Sorry.