Neoliberalism: Wrong About Everything

Some economist from the Netherlands has the nerve to point out that Neoliberals were wrong about deregulation and employment. She isn't right because she is an economist, she's right because she is looking at the evidence and making a coherent argument instead of mouthing empty slogans about markets being good and regulations being bad and unnecessary until there is a market failure


She begins by jumping on the Alan Greenspan was actually a dummy train.

Asked during an interview in September 2007 whether European governments should liberalize their countries’ labor codes, former United States Federal Reserve Chairman Alan Greenspan responded that Europe’s labor-protection laws significantly inhibited economic performance and resulted in chronically high unemployment across the continent. In the United States, people are fired more easily than in any other country, and the unemployment rate at the time was among the lowest in the world.

Untill, of course, Greenspan's incompetence led to the current 9+ unemployment proved that he was all wet.

Oh yeah, that whole Neoliberal experiement in creating jobs through outsourcing, she asks that we

 consider Evergreen Solar, the third-largest maker of solar panels in the US, which announced in January that it would close its main American factory, lay off its 800 workers there within two months, and shift production to China. Evergreen’s management cited the much higher government support available in China as its reason for the move.Evergreen is only one of many cases suggesting that the US might find itself in the midst of what Princeton-economist Alan Blinder in 2005 dubbed the Third Industrial Revolution. 

Don't worry, though Blinder knows that

about one-third of all public- and private-sector jobs in the country  are vulnerable for offshoring. Blinder also predicted that the flexible, fluid US labor market would adapt better and faster to globalization than European labor markets would.

Which is of course to say that Blinder was half right and the important half, all will be well, wasn't just wrong it was radically evil.

Our Dutch friend suggest that although

we are only in the early stages of that revolution, and the outcome remains uncertain . . . a preliminary comparison between Europe’s largest economy, Germany, and the US suggests that the former is better equipped to hold its own in the age of globalization.

But how could that be? And anyhow, prove it:

German multinationals like Siemens and Daimler are ratcheting up investment to meet both emerging-market and domestic demand. The companies plan to add hundreds of thousands of jobs worldwide this year alone. While many of these jobs will be in Asia, both companies say that they will add high-skill jobs in Germany as well.

Why? you ask.  A heavily regulated labor market:

 Siemens, apparently conscious of the benefits of labor-market rigidity, has taken the unusual step of promising its employees a job for life. Last year, the company sealed an agreement with the trade union IG Metall that includes a no-layoff pledge for its 128,000-strong German workforce.

Making matters worse, Germany's politicians don't hate people:

A more important explanation for Germany’s current economic success may be the substantial government support that German industries receive on a structural basis, especially the car industry. The US economy, on the other hand, is bogging down in its policymakers’ persistent emphasis on consumption and tax cuts (most notably for the super-rich) over investment.

What's the solution? End Neoliberalism.

We now know that labor-market deregulation does not ensure economic resilience and rapid job creation. On the contrary, the best solution is probably a diversity of labor contracts. A certain amount of labor-market rigidity may make economic sense for jobs that require firm-specific skills and training, alongside greater flexibility for jobs that require fewer skills.