/Waiting for “Rooseveltian Relief”: An Oversimplified Framework for the Employment Situation
UncategorizedMay 11, 2020

Waiting for “Rooseveltian Relief”: An Oversimplified Framework for the Employment Situation


I’ve always loved the term “Employment Situation,” from the Bureau of Labor Statistics, because employment is indeed so often a “situation.” Like now, where the unemployment numbers are Great Depression-level (and probably undercounted, because of methodological issues at BLS and technical issues at the state level). Treasury Secretary Mnuchin says “the reported numbers are probably going to get worse before they get better.” It’s not clear that the lost jobs will come back. 42 million americans are in danger of losing their employer-based health insurance. In the midst of pandemic. According to Brookings, Among mothers with young children, almost 20% say their children are not getting enough to eat, a rate three times as high as in 2008, during the worst of the last collapse. It’s bad out there. How bad is it?

Anybody remember “the scariest chart in the world“? That was nothing!

Naturally, using education as a proxy for class, the working class is hit hardest, and the worse off among them the hardest:

Finally, Wall Street seems to be looking forward and not back, and has taken to discussing the shape of the recovery:

Democrats have promised that this bailout — the phase 4 coronavirus relief package (CARES 2) — will be “Rooseveltian” in scope, but we haven’t seen a bill, and prospects don’t look good. Via Axios:

Details: The legislation, which is still being drafted and is subject to change, is expected to include:

  • Roughly $1 trillion for state and local governments. They want to split this money into separate revenue streams to ensure each community can access it.
  • More money for hospitals and COVID-19 testing.
  • Roughly $25 billion to keep the U.S. Postal Service afloat.
  • Expanded nutritional benefits, Medicaid funding and unemployment insurance (which they call “paycheck guarantee”).
  • Another round of direct payments to Americans.

I don’t have time or the inclination to visit Roosevelt’s grave to see if he’s spinning in it, but I doubt very much that Roosevelt would have allowed himself to get wrapped round the axle on complex eligibility requirements:

House leadership is also working on narrowing down the guidelines for how these funds are allocated to ensure that people aren’t “double dipping” into the different pots of money, a senior Democratic aide told Axios.

  • For example, they do not want someone who is receiving more unemployment money to also receive money through the Paycheck Protection Program. However, it’s still unclear whether the PPP fund will be replenished.
  • “We’re trying to limit the amount of overlap so people aren’t abusing the system,” the aide said.

We’ll have to pry means-testing from liberal Democrats’ cold dead hands….

Meanwhile, in the rest of the country, the burning issue is “re-opening,” with protests, culture war framing, and so forth. CNN:

With the economy plummeting and unemployment rates soaring, some states have reopened businesses despite falling short of guidelines recommended by the White House and other health experts.

Among the guidelines for “Opening Up America Again,” states shouldn’t start to reopen until they have a downward trajectory of positive cases in a 14-day period or a “downward trajectory of positive tests as a percent of total tests within a 14-day period.”

It would be smart for states to meet those guidelines first, said infectious disease expert Dr. Carlos del Rio, a professor of medicine and global health at Emory University.

Otherwise, they risk a second wave of increased infections and deaths that could overwhelm hospitals and hit more Americans with expensive medical bills.

Even states that stick to their stay-at-home orders can be affected by neighboring states that lift their restrictions.

“It’s like having a peeing section in a swimming pool,” del Rio said. “All the time, we’re crossing state lines.”

So Federalism cannot address pandemics. Good to know.

Now, with that overly long summary of the employment situation, let me pivot to the promised oversimplified framework for understanding the relationship between it and the COVID-19 pandemic that induced it. That framework is class, as the Bearded One would understand it; I learned it — and I’d extremely happy to have scholars correct my misunderstanding — when I was working in factories. It made sense to me then, and it makes sense to me now. I’m really writing this post as a reponse to Amfortas the Hippie, who wrote this comment, which I hoist (having added capitalization; sorry!):

I obtained E.P. Thompson’s “Making of the English Working Class” the week before I became aware of a pandemic, in late Feb.

And i’ve found it difficult to read an actual book ever since,lol… Exhaustion and chaos, etc.

So I’m only maybe a fifth of the way into it… but he goes into great detail about [contradictory class locations].

The initial takeaway: It takes a lot of work and education and a willingness to be punished and a tolerance for long haul and resistance to backstabbing and etc.

It was a little easier back then to define the Classes, given lords and ladies and the long history of feudalism…. But there was still the same confusion of tongues we see here: Shopkeeper? How big counts? etc. Thinking about my grandad… small sheet metal manufacturing in Houston, 50’s-late 80’s. Came up from nothing, from a country shop much like the one I have now.

Kept care of his people, and was upset when the unions… which he had always supported, and even been a member of, back when… went on strike.

Perhaps… Just like with the whole Red-Brown alliance, and finding commonality with rednecks… “Working class” must be defined subjectively.

Although I would have a hard time believing the two bankers I know (small town single branch banks) were they to express solidarity, lol.

I’d need to see some orthopraxis (right action=”works”), rather than kind words and orthodoxy (right belief).

As i’ve said, the PMC I know… the local petite bourgeoisie… exhibit little class consciousness… Remember, it’s been hammered into them that we are a classless society.

So how could they?

These proverbial “Karens” haven’t the means to see things that way… And, interacting with them, there’s not much thought going on at all… merely Certainty that they are Right, full stop.

I’ve never had the opportunity to separate any of these folks from the herd like I have with feedstore workers and farmhands… Too pretentious to have a beer with the likes of me, and far too satisfied and holier than thou…. All virtue and status signaling to their peers, and a blind disregard for anyone below their station.

I’ll be watching their near-term descent closely, to see how they handle it… I reckon that will shed some light on all this.

What I’m hoping to do in the remainder of the post is provide some back-of-a-napkin diagrams to “separate… these folks from the herd.” I also hope the framework will clarify the politics of the coming “Rooseveltian” CARES 2, and the, er, resistance to it. I will present three figures. Each describes a cycle. The cycle of the working class is shown in red; capital is shown in black. C stands for “Commodity.” M stands for “Money.” (We will skip over the unfortunate fact that money can be a commodity, because we are not talking finance here.)

Figure 1: Wages

(The Bearded One’s notation for this figure is C-M-C’.) So I don’t think that “working class” need be defined subjectively at all. The members of the working class begin by selling their labor power (a commodity) in exchange for a wage (money). With that wage, they purchase the means of subsistence to reproduce their labor power[1] (food, shelter, clothing, and on up Maslow’s Hierarchy of Needs). If you work for wages, you see how your daily round is shown in that cycle: Get up, go to work, get paid, come home, eat, sleep. Rinse, repeat. Now, one could argue that Amfortas’ PMC are special, due to their credentials, intellectual skills, and so forth. And to an extent, owing to accidents of history, they are. However, (a) they are still selling a more rarified form of labor power for a wage (or a salary, fundamentally the same), and (b) one of the trends of the last decades, especially among youth, is that the PMC are being pushed downward into the working class. Adjuncts, rather than full professors, for example.[2] The PMC’s situation is, in fact, extremely precarious.

Figure 2: Capital

(The Bearded One’s notation for this figure is M-C-M’.) Now we add a second cycle for capital. The members of the capitalist class begin with money. They purchase labor power (and other commodities), combine them, and collect more money. (The source of profit is another topic not covered here). Get up, go to work, write the checks, go to the bank, come home, eat, sleep. Rinse, repeat. Capital’s position — as opposed to the individual capitalist’s — is not precarious at all, except to the extent that workers withhold their labor (through, e.g., strikes or other actions.) Of course, there are capitalist class traitors — Engels comes to mind — who are always to be encouraged.

Figure 3: Provisioning

To the above two interlocking and seemingly perpetual cycles, I add the concept of “provisioning,” connecting it to the means of subsistence. Provisioning means providing the means of subsistence to workers not through wages: mainly through government, but also through charity, mutual aid, nature (victory gardens), and so forth. (It looks exogenous because in this simple framework it is.) Now, if you are a capitalist, and want total control over your working class, you will want all their means of subsistence to come from wages, because that maximizes your power over them, and allows you maximum control over their wages, working conditions, etc. You will want as little provisioning as possible, and whatever there is should not empower workers. You will also regard capital, as opposed to labor, as the driver. For example, in the current pandemic, Peggy Noonan writes:

We can’t grapple only with the illness, we have to grapple with the crash. The bias now should be toward opening, doing everything we can to allow the economy to become itself again, to the degree that’s possible.

Toward that end, two thoughts… The first is that we must unleash the creativity of businessmen and -women, an uncalled-on brigade in this battle. Not only doctors and scientists will get us out of this, business must be on the lines, too….

[George Shultz says: “We have a potentially vibrant private sector. There’s an immense amount of energy and ingenuity and fresh thinking there. They think about how to get themselves in a profitable position, and to do that they have to take into account a lot—supply chains, the health of their employees, the safety of customers. We have to open things up and say to the private sector, ‘Do your job.’ They have creativity, they want to get things up and going again.”

The a priori case for leaving public health to the capitalists is not clear to me, but let that pass. The key point is that conservatives like Noonan want to keep provisioning to an absolute minimum.

So now we can forget about the moralizing and see what the “re-opening” debate is really all about (yes, people with guns in the Kentucky state house give me the creeps, but that’s at least partially the political class jerking my chain in the culture wars.

First, the working class needs to keep its C-M-C’ cycle going. Absent a minimum level of provisioning — unemployment is hard to get, and is not universal; health care is horrible; the rent is too high; the car payments aren’t paused; and on and on and on — There Is No Alternative to going back to work and collecting wages. And there’s no point moralizing about people who need to do that (entertaining though that is).

Second, the capitalists would like to keep their M-C-M’ cycle going. They too have rent to pay, debts to service, and on and on. I say “would like to” as opposed to “need,” because money tends to flow to those who already have it. Small business, of course, will have the hardest time, and will die and be snapped up by bigger businesses. Big business will do well, as is the way of the world.

Third, despite the yelling and screaming on the teebee, neither liberal Democrats nor conservative Republicans have any wish to disturb the sanctity of the wage relation (C-M-C’). The initial relief package was funneled through unemployment insurance and the PPP precisely for that reason (and not only because our sclerotic relief systems have a hard time writing checks and making bank deposits.) The only generic form of relief — the absurdly low $1200 payment — was carefully made for one time only, and changes to provisioning mechanisms — a UBI, even a Jobs Guarantee — were carefully kept off the table. If you take a second look at the Democrat’s “Rooseveltian” program, you will see that Democrats are still forcing relief through existing channels. These are the forms of provisinng proposed:

  • Expanded nutritional benefits, Medicaid funding and unemployment insurance (which they call “paycheck guarantee”).
  • Another round of direct payments to Americans.

No doubt the Republicans will fight all this tooth and nail, but in terms of changing the balance of forces between workers and capital, a change that the New Deal recognized, “nothing fundamental will change.” If the Democrats really do not want C-M-C’ to force workers back to work, then they need to think seriously about provisioning, and not this pissant stuff. That is our employment situation.

NOTES

[1] Labor power because “no one is essential.” Grocery workers are essential workers, but no one grocery worker is irreplaceable. Labor, Marx argues, is not alienable and cannot be sold. When a worker complains that management is not treating them as human, they are putting their finger on that distinction. In fact, the tendency is for capital not treat them as human, any more than cattle in a slaughterhouse are treated as human, except insofar as doing to meets whatever temporary requirements that capital might have.

[2] Heaven forfend we should pursue our labors for the sheer love of doing so.

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