August 6, 1996
OBSERVER / By RUSSELL BAKER
What A Dunce
t takes great self-confidence to write a newspaper column. Some might say it takes arrogance. Be that as it may, my willingness to pronounce on a great many matters of which I have little or no knowledge is one of my prime qualifications for this trade.
When it comes, however, to matters economical, or to put it indelicately, money, I invariably lose courage, hesitate to speak at all, and, when I dare, do so only after groveling in apology for my unfitness.
Experience has shown that there are far too many people whose expertise in money matters qualifies them to crush my opinions under tonnages of wisdom. Many others, not content with demolishing me, take cruel pleasure in calling attention to the comedy I have created by playing the fool.
As I now want to talk about economics questions that leave me baffled, let me first, therefore, apologize for not knowing the answers to these questions, which would be perfectly obvious to anyone who had studied his Samuelson, Friedman and Galbraith.
With great humility, then, and greater trepidation, I put my questions.
The first concerns the bipartisan welfare bill, which proposes to punish the children of welfare parents who do not, after time, take jobs. My first question is: What jobs?
It is my impression that unemployment now stands at 5 percent. Doesn't this mean that 5 percent of people who want jobs cannot find them? If there are no jobs for people who want them, why do the President and the Congress assume that there will be jobs for these additional people being sent into the job market under work-or-else orders?
This, however, is only part of my question. It is my impression that the present 5 percent unemployment rate is regarded happily by our wisest money people as "full employment." What's more, as we have seen repeatedly, Wall Street has conniption fits whenever there are signs that unemployment might drop below 5 percent.
I mean, when statistics show more people going to work, the stock market always goes down. Wall Street obviously hates having too many people working. Not long ago a man obviously learned in matters financial explained this in The Wall Street Journal. The details were beyond my grasp, but he seemed to be saying that too much employment drives up the price of labor, which causes inflation, which causes disaster in financial markets.
Therefore, he said, it is the duty of the Federal Reserve Board to raise interest rates whenever employment rises noticeably. The rule here is: Raise interest rates and you depress the economy, thereby wiping out jobs and keeping the financial markets stable.
The Federal Reserve, apparently accepting this theory, is forever raising and lowering interest rates to maintain unemployment at the happy 5 percent level.
This being so, why in the world do Mr. Clinton and his Republican allies insist on making welfare clients take jobs? I realize it's good for their souls, but isn't it terrible economics? Here is one arm of government, Congress and White House, trying to raise the employment rate while another arm, the Federal Reserve, struggles to hold it down.
Does this make sense to everybody but me?
It seems to me that common sense would force us to stop people who are already unemployed from taking jobs since their doing so will cause inflation, create havoc in financial markets and destroy the stability for which we can thank our 5 percent unemployment rate.
If this is so, shouldn't we be encouraging welfare people to stay unemployed? Where is the sense in threatening to put welfare children out in the cold unless their parents take these jobs that threaten to devastate our economic stability?
Are they not, in fact, performing a valuable economic service to the country? By staying unemployed they seem to me to be contributing to the economic stability that brings such pleasant prosperity to the rest of us.
Wouldn't it be logical for a grateful nation to recognize the value of their services by opening its purse to them, instead of churlishly kicking them until they take jobs that the masters of money don't want them to take?
I'm just asking, that's all.
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