We couldn’t decide which story seemed most noteworthy, so we’re snipping bits from three items in the Times.

First, Paul Krugman on the Republican Party’s “Mellon Doctrine.”

Here’s the report’s explanation of how layoffs would create jobs: “A smaller government work force increases the available supply of educated, skilled workers for private firms, thus lowering labor costs.” Dropping the euphemisms, what this says is that by increasing unemployment, particularly of “educated, skilled workers” — in case you’re wondering, that mainly means schoolteachers — we can drive down wages, which would encourage hiring.

There is, if you think about it, an immediate logical problem here: Republicans are saying that job destruction leads to lower wages, which leads to job creation. But won’t this job creation lead to higher wages, which leads to job destruction, which leads to …? I need some aspirin.

For the resolution of this conundrum, we refer Mr Krugman to the piece by Motoko Rich piece in the Business section, “Many Low-Wage Jobs Seen as Failing to Meet Basic Needs.” Pay particular attention to the disparity between official poverty lines and the actual costs of a half-decent life.

The study, commissioned by Wider Opportunities for Women, a nonprofit group, builds on an analysis the group and some state and local partners have been conducting since 1995 on how much income it takes to meet basic needs without relying on public subsidies. The new study aims to set thresholds for economic stability rather than mere survival, and takes into account saving for retirement and emergencies.

“We wanted to recognize that there was a cumulative impact that would affect one’s lifelong economic security,” said Joan A. Kuriansky, executive director of Wider Opportunities, whose report is called “The Basic Economic Security Tables for the United States.” “And we’ve all seen how often we have emergencies that we are unprepared for,” she said, especially during the recession. Layoffs or other health crises “can definitely begin to draw us into poverty.”

According to the report, a single worker needs an income of $30,012 a year — or just above $14 an hour — to cover basic expenses and save for retirement and emergencies. That is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour.

The Mellon Doctrine, you see, contemplates a future with more poor people! Which makes perfect sense in an era in which, as Floyd Norris points out, bankers believe that they should not have to assume risks on mortgage loans.

Small banks especially seem to think it is a birthright for them to make money on mortgages without suffering any ill effects if the loans go bad. They argue that they did not cause the last crisis, so they should not have to suffer now.

The founders of many of those little banks — now long dead — would never have thought it possible that such a right could exist. Now it is defended as critical to saving the housing market.

Drop me a line at rjk@dailyblague.com
This entry was posted on Friday, April 1st, 2011 at 10:30 am.