Social Safety Nets, Inflation Fighting, and Market Discipline

I've had some differences with Barney Frank in the past over Fed policy, but here he makes an interesting point. Why do European central banks respond more aggressively to inflation than the US central bank? Could it be the difference in social safety nets?:

Frank Says Stronger Social Safety Net Would Free Fed, by  –Michael S. Derby, Real Time Economics: There are many reasons why the Federal Reserve is boxed in on monetary policy, but Rep. Barney Frank Wednesday found a new dimension to the central bank’s dilemma. ...

Ben Bernanke and his fellow policy makers are facing a worrisome mix of tepid growth, troubled financial conditions and rising price pressures... The weak economy and market tumult call for rate cuts. But the energy-driven price gains and deteriorating expectations for future prices call for rate increases.

That’s left the Fed stuck at its current rate of 2%, very likely for an extended period. But according to Frank, if the U.S. social safety net weren’t so miserly, the Fed might actually have more room to take on inflation. ... “The relative insufficiency of our social safety net vis-a-vis what you have in Western Europe constrains monetary policy,” Frank said.

If the U.S. offered more support for the unemployed and displaced, “the Federal Reserve would then be freer…to slow down the economy in the knowledge this would not have a disproportionately negative effect” on the working population. That part of the population is already losing notable ground in economic terms, he said. ...

And, contrary to what you might hear - sometimes based upon the argument that we are not in a technical recession - "families are facing hardship":

Bernanke: Recession or Not, Families Are Hurting, by Sudeep Reddy: ...At a House hearing, Mr. Bernanke — responding to a lawmaker’s question about Americans’ economic pain ...[and] whether a recession is underway. ...

“Whether it’s a technical recession or not is not all that relevant,” Mr. Bernanke said. “It’s clearly the case that for a variety of reasons families are facing hardship.” ...Mr. Bernanke recounted the “numerous difficulties” facing the economy: “ongoing strains in financial markets, declining house prices, a softening labor market, and rising prices of oil, food, and some other commodities.” ...

As to whether this is a technical recession, “I don’t see why that makes a great deal of difference,” Mr. Bernanke said, adding that the terminology doesn’t play into the Fed’s policy decisions.

In other what are you whining about news, prices are up, and the ability of workers to buy goods and services is down:

U.S. consumer prices soared at their fastest annual pace in nearly two decades last month... Even more worrisome for policymakers than the headline inflation jump may be signs that food and energy prices are starting to filter through the broader economy, as evidenced by sharp price gains last month in housing, transportation and services. ...

The consumer price index jumped 1.1% in June..., the second-highest increase since 1982 and the highest since 2005. Excluding food and energy, it advanced 0.3%. ...

Consumer prices swelled 5% on a year-over-year basis, the highest rate since May 1991. The core CPI grew a more modest 2.4% compared to June 2007, though that's still well above the Fed's long-term goal of 1.5% to 2%. Over the past three months, core inflation rose at a 2.5% annual rate. ...

In a separate report, the Labor Department said the average weekly earnings of U.S. workers, adjusted for inflation, fell 0.9% in June, suggesting incomes aren't keeping pace with prices...

I'm not sure that I agree with Robert Reich that the episode we are currently experiencing proves that the Great Moderation was more luck than anything else, particularly that it disproves Fed policy made any difference. There is a lot of empirical evidence pointing to more aggressive inflation fighting as a key factor in the Great Moderation (e.g. Has Monetary Policy become More Effective? by Jean Boivin and Marc P. Giannoni, and On the Sources of the Great Moderation by Jordi Galí and Luca Gambetti are two recent contributions in this area), and we don't know how bad the current episode might have been had the Fed, say, followed a 1970s-type policy prescription (that is, even though we had bad luck - a large shock hit causing large effects - without moderation through Fed policy the state of the economy could have been much worse). But I do agree with his call for increased social insurance:

The End of the Great Moderation, the Bailouts of Freddie & Fannie and Wall Street, and the Tattered Safety Net for Everyone Else, by Robert Reich: As we bail out Wall Street along with Freddie and Fannie and all the top financial executives who have been pocketing tens of millions a year, yet allow millions of homeowners and jobless Americans to sink, it's worth contemplating what's happening to the American economy and to our social safety nets.

What economists have called "The Great Moderation" - a period when the business cycle evened out, and neither inflation nor recession posed much of a threat- began in the mid-1980s, and now appears to be over. It was good when it lasted. But it led the nation to think we didn't need much by way of social insurance.

No one knows for sure what caused the Great Moderation. Some had credited increased sophistication of financial markets and the wisdom of the Federal Reserve Board. Hindsight suggests it was more luck than anything else.

Well, folks, it turns out the great moderation was something of a fluke, and now tens of millions of Americans are in trouble with no safety net to help them.

That's because the apparent end of the boom and bust cycles led us to assume the economy would no longer impose huge, unexpected, and arbitrary losses on large numbers of Americans. So we basically got rid of the safety nets. We abolished welfare, let unemployment insurance wither, and paid scant attention when corporations eliminated defined-benefit pensions and cut health insurance benefits. We even stopped worrying about the safety of small investors, allowing federal deposit insurance to shrink as a proportion of total savings (witness the recent bank run in California).

But now we have to rethink safety nets. Right now, nets are being spread for the wrong people. The giants of Wall Street along with Fannie and Freddie get bailed out but there's still no relief in sight for most homeowners who can't pay their mortgages. Corporations that don't deliver on their pension obligations are helped but there's nothing for retirees and small investors whose savings are drying up because of Wall Street's decline. Small investors are losing their shirts but the Fed stands by to help the biggest.

Yet I have to believe the end of the Great Moderation will eventually result in a broader safety net. Maybe not the old forms of social insurance, but new ones like universal health insurance, earnings insurance, and savings accounts in which the dollars you put away are supplemented by government dollars.

The very rich, fattest investors, and the biggest corporations don't need safety nets. Now that the booms and busts are back, the rest of us do.

I don't advocate protecting the financial system to bailout the "very rich, fattest investors, and the biggest corporations," it's the people who would need the social safety net if the broader economy fails that are the concern. We need both enhanced social insurance and a stable financial system. For stabilizing the financial system, the trick going forward will be to develop mechanisms that are able to prevent financial meltdowns, but avoid rewarding the people who brought about the potential for collapse. I think regulation that prevents behaviors that lead to these kinds of problems is our best chance, but we can't anticipate everything possible problem that might occur and there are times when insuring against collapse requires us to hold our noses and clean things up as best we can. But that should be a last resort. As for how the social safety net fits into this, much like the ability to fight inflation, the ability to discipline market participants - to let those who made bad bets, bad decisions, etc. suffer losses or other penalties - is also enhanced when a stronger social safety net is present.

Comments

[Bruce Wilder]

I think we ought to be cynical enough to admit the possibility that some would-be policymakers would actually desire to increase economic fluctuations, as a means to (literally) shake-down the poor and middle classes.

The technocratic pretension that we are agreed upon desirable ends is deceptive. All that economic engineering can agree upon is the design of machine, the principles by which its levers and gears work.

Policy could saddle the poor and middle class with expensive "insurance" provided at an immodest fee by private wealth in place of cheap, public provision (as instituted by the New Deal and the Great Society), and then, introduce more exaggerated economic fluctuations. The poor and middle classes, exposed to greater risk, will have their income and wealth reduced by abrasion and transferred upward.

Increasing inequality and increasing household risk are products of a general policy shift, which has the object of changing income and wealth distribution. The banking crisis is, arguably, the plain product of this policy shift, and in crisis, exists the opportunity to change direction.

[kthomas]

Hear hear, BW.

[anne]

Barney Frank's conjecture is terrific.

[Movie Guy]

Mark Thoma - "I think regulation that prevents behaviors that lead to these kinds of problems is our best chance, but we can't anticipate everything possible problem that might occur and there are times when insuring against collapse requires us to hold our noses and clean things up as best we can. But that should be a last resort."

U.S. laws and supporting regulations to prevent many if not most contributing causes of this meltdown were in place previously, having worked very well for decades. Those Federal laws and regulations were gutted and thrown to the curb.

The Long Demise of Glass-Steagall, 1933-1999
Frontline, PBS

1913-2008
Where Credit Is Due: A Timeline of the Mortgage Crisis
By Nomi Prins
July/August 2008 Issue, Mother Jones

Foreclosure Phil
by David Corn
May 28, 2008, Mother Jones

The history of legislation and regulatory events leading up to this financial meltdown are fully documented. No need to reinvent the wheel when all the U.S. Government has to do is bolt it back on.

[kthomas]

anne! I just KNEW you would like that, and comment as such. :)

[Tim]

One little quibble with part of this post, there is a specific reason that the ECB cares more about inflation than the Fed: they are legally bound to care about inflation above all other concerns, while the Fed has a triple mandate. It's written into each of their charters what their criteria should be in determining policy, and in this case the law for each is clear.
Now, one can argue that the reasons for having that rule are because of the social safety net or lack thereof, but the rules for the Fed each were written back while on the Gold Standard and the ECB only has inflation fighting as it's central mission due to the Germany's historical fear of inflation.
What I would say is that during the Great Moderation many central banks had implicit or explicit changes made to their mandate so that they focused on inflation (or even inflation targeting) while the US did not make that change. It could be that we could not make that change because we lacked a social safety net and therefore needed a central bank that took that into account.

[save_the_rustbelt]

Layoffs happen during recessions. Any safety net only cures a portion of the pain. The realist in me says this will always happen.

Let's not hope for job losses as the best means to fight inflation, safety net or not.

[save_the_rustbelt]

"So we basically got rid of the safety nets. We abolished welfare, let unemployment insurance wither,...."

That is a wee bit of an exaggeration.

[Winslow R.]

MG wrote: " No need to reinvent the wheel when all the U.S. Government has to do is bolt it back on."

Balderdash. If regulation is simple to bolt on, it is just as simple to unbolt regulation once memories fade.

The mechanism needs to be redesigned. See the difference?

Why not redesign the mechansim so that it needs minimal regulation? Why not redesign the mechanism so that it is inherently stable?

Yes it is possible.

[anne]

Suppose, then, universal health care and minimal cost public college education alone, along with a more aggressive monetary policy. When necessary for employment sake the emphasis would more surely come from fiscal policy even though the effect is more slowly realized. The Federal Reserve would still protect against recession, since ordinarily recession possibilities alone would limit price movements. I like considering such a mix.

[anne]

The problem fiscally is, how do we even get to universal health care, assuming more support then I anticipate from insurers and employers. How is such a fiscal transition affordable, given Democratic policy proposals for the coming Congress? While there is broad support in Massachusetts for the move to universal health care, the support appears no less than on passage even with requirements for purchase, how the state is to afford continually widening insurance coverage is not clear since employers are less and less part of the broad support in anticipating increased costs.

How then is moving to universal health care and minimal cost public college education affordable in a time of continued tax cutting which is anticipated?

[Movie Guy]

Winslow R.,

Spell out the problems with the governing U.S. Code that was previously in place regarding bank oversight and regulatory authority.

Also explain why derivatives, SIVs, and similar financial instruments as well as hedge funds should note be subject to considerable oversight and regulation.

As the Federal laws were gutted, there were many experts and other individuals who cautioned, including remarks in Congressional testimony, that what has just transpired would most likely occur.

Here we are. Game. Set. Match. All lost.

Put the laws back in place, fine tune a few, and stop pretending that Rome has to be reinvented stone by stone. That is such nonsense.

[anne]

Paul Krugman was rightfully excited with passage of Medicare legislation, preventing cuts in physician payment, passage against a Presidential veto, but passage will not ease a cost problem. General Motors has just stopped health care insurance provision for retiring white-collar workers who are eligible for Medicare, and this will be a matter of course from here. But, there is no prospect of lessening administrative costs for private insurance companies covering Medicare patients.

Budget problems are still to come.

[Cynthia]

Let's just hope that our social safely net (what's left of it, that is) isn't cannibalized and made into more waste, more fat, and more corruption to be added to our already wasteful, our already fat, and our already corrupt military, healthcare, and banking systems.

[ndd]

This thread gives me the opportunity to once again scream into the void, that all the regulations in the world aren't worth a bucket of spit if the regulators (can you say "SEC" and "Alan Greenspan"?) refuse to enforce them.

You need a mechanism to ensure that existing regulations are enforced, particularly if there is "regulatory capture". If the federal bureaucracies tasked with regulating won't get off their a**es for ideological or other reasons, who has an interest to force them to? The best candidate is the states. Give the attorneys' general of the states standing to ask for injunctive relief in the Federal courts to force the regulators' hand, and for the states to have the immediate right to act in their own respective states if the Federal regulators won't.

... he screamed into the void.

[Winslow R.]

Movie Guy wrote "Spell out the problems with the governing U.S. Code that was previously in place regarding bank oversight and regulatory authority. "

The fact that necessary regulations could be removed?

MG wrote: "Also explain why derivatives, SIVs, and similar financial instruments as well as hedge funds should note be subject to considerable oversight and regulation. "

I'd be satisfied with a public payment system along with no government bailouts of any counterparties. No regulation needed if leverage is turned on its head.

MG wrote : "As the Federal laws were gutted, there were many experts and other individuals who cautioned, including remarks in Congressional testimony, that what has just transpired would most likely occur. "

Yes, Federal laws you propose are easily gutted.

MG wrote"Put the laws back in place, fine tune a few, and stop pretending that Rome has to be reinvented stone by stone. That is such nonsense. "

Rinse, lather and repeat. Such stupidity.

[MattY]

"If the U.S. offered more support for the unemployed and displaced, “the Federal Reserve would then be freer…to slow down the economy "

This means that we train in a specialty, offering services to the unemployed, standing by like volunteer firemen, ready at a moments notice to set up job training, family counseling, helping to deliver food? We do this during slow economies?

The government cannot act counter cyclical. The government may be able to hound us into taking on more debt, but even that hounding is generally too little too late.

Barney Frank is not an economist, and what he is talking about here is changing our behavior, as social science, not economics. Making us go into some automatic recession style behavior, and that is likely to require some evolution, which Barney is even less expert.in

[ken melvin]

Caught Pelosi, Blinder, Summers, Elmendorf, Frank, Sinai, Blank, ... on C-span last night. Impressed w/ the concern for those most effected, the looking down the road, and, especially, with the dems willingness to take expert advice.

Thanks Bruce - The fleecing takes many forms. Some more obvious, some more repugnant, but this housing bubble amounts to one of the greatest transfers of wealth of all times. Even the 'middle class' got in on it.

[kthomas]

MattY, evolution? No, but Americans will definitley have to adjust, adapt. In this case, with less. Hunger is a very good teacher, and so many in our rich country have never been hungry. But dont worry, President Bush said everything was OK, and Sen. Gramm has told us to stop whining.

[don]

"Why do European central banks respond more aggressively to inflation than the US central bank?"
Tim makes a valid point. But more importantly, I think the overriding reason for Europe's greater inflation vigilance is that their labor markets are more heavily unionized, so inflationary expectations are much more likely to result in a cost-push inflationary spiral. Also, they are not so arrogant or so stupid as to think monetary policy should have any other role.

[bakho]

so current US inflation is caused by high energy prices which add to the costs of most items. So the Fed should raise interest rates to throw the country into recession in order to stop the increase in energy prices? Is there a better alternative?

What about energy conservation and new efficiency standards? If we cut oil demand by 20% through conservation to drive down prices, would that be preferable to raising interest rates to double digits again to tank the energy use in the economy to drive down the price of oil? Just because a Fed action COULD address a problem (energy driven inflation) does NOT mean that Fed action is the better than alternative policy. Maybe if the Fed held onto its cards, conservation efforts would take care of the problem?

Maybe the EU is more aggressive in attacking their inflation because they are already much more energy efficient and cannot use a drop in their energy consumption to reduce inflation?

[Movie Guy]

Winslow R.,

There are people just like you serving in the U.S. Congress. Those are the fools who voted to gut the banking laws in the U.S. Code.

Your argument sucked.

[ken melvin]

Love the theater, acting, storyline, ... of BBC's Jane Auaten series, but every so often I remember that behind those estates and riches lay colonialism, slavery and abject poverty amongst England's lower class.

[esb]

More than a rumour (or rumor), less than a fact ...

is that S.A.F.E. (China), which had been instructed to forgo major diversification out of dollar assets prior to the close of the Summer Games, has now been freed and ordered to begin the process at once.

If true, this is the straw.

We shall see,

but this would explain the sudden genuflection of Bush/Cheney in front of Iran (the weekend Geneva meeting) as a desperate attempt to collapse the price of oil.

Probably the only real card they have to play.

Right now, what SAFE does and what IRAN does are the two political choices that trump everything else.

If SAFE is now selling and if IRAN says "no deal" kiss the dollar adios.

Everything else will be immaterial.

[Patricia Shannon]

I've been wondering what causes recessions to end? Lack of jobs leads to lower spending, leading to more loss of jobs. What, besides government action (which includes wars), turns it around?

And while I'm asking, what is Hi Fi (besides good sound equipment).

[anne]

"More than a rumour (or rumor), less than a fact ...

is that S.A.F.E. (China), which had been instructed to forgo major diversification out of dollar assets prior to the close of the Summer Games, has now been freed and ordered to begin the process at once."

Rubbish.

[esb]

http://www.ft.com/cms/s/0/fc250ac2-5361-11dd-8dd2-000077b07658.html?nclick_check=1

Go argue with Geoff.

[Winslow R.]

MG wrote: "There are people just like you serving in the U.S. Congress. Those are the fools who voted to gut the banking laws in the U.S. Code.

Your argument sucked. "

Movie Guy you lack conversational skills.

I am nothing like the fools who voted to gut the banking laws in the U.S. Code. Nor am I like the fools who think bolting back on regulations will fix things.

My advanced degrees are in systems controls and stabilization. It is very clear the current monetary policy system has inherent built in instabilities which are compensated for through fiscal policy bailouts. The system itself is unbalanced as it has an inherent bias that shifts resources to the financial class. There of plenty of people that would like to keep that bias.

I'd like to know why repeated financial crises fail to make this clear to people such as yourself?

Why fight making the monetary system a stable system unto itself? If you understand history, the monetary system is moving into a more stable configuration, just very slowly.

Can we get there by tweaking it a little bit each time it breaks down, sure. There are plenty of people that agree that we should take a very long time less we introduce instability, kind of funny.

[Ryan]

The ECB targets inflation because that is their JOB; it is really as simple as that.

[Barkley Rosser]

It is "the job" of the ECB because it was mandated to target inflation, unlike the Fed. While it may be that this social safety net argument plays in there, I think it is very secondary. The mandate to target inflation was part of the deal with Germany to get it to give up its strong Deutschemark in favor of the euro, and part of the deal was also to locate the ECB in Frankfurt-am-Main, where the Deutsches Bundesbank is located. The Germans were proud of the strong anti-inflation policy of their central bank and wanted to be reassured that if they let it lose its power (and they their currency) that an anti-inflation policy would be followed. That is where the inflation targeting mandate of the ECB came from.

Now, one can ask where the strong anti-inflation policy of the Deutsches Bundesbank came from. Most would say the unpleasant experience of two hyperinflations in Germany in the 20th century, with its social policy, including the Mitbestimmung policy of having union leaders on corporate boards of directors being part of this as labor moderated wage demands for many decades, partly being paid off with the generous social safety net policies of the Federal Republic of Germany, its famous social market economy (sozialmarktwirtschaft).

[Lee A. Arnold]

At first I thought that Gramm said Americans are a bunch of winos! Trying to be patriotic I went and got drunk, and immediately wondered why we let only the financial system create money. It's not like those clowns don't screw things up and take us all to the cleaners, a couple of times every decade it would seem. So why are we kowtowing to this system? Why not at least print the money necessary to pay directly for nationalized healthcare?

[save_the_rustbelt]

"I've been wondering what causes recessions to end?"

Surviving businesses retrench, cut debt and build cash reserves, then they need to invest the cash.

depletion of finished goods inventory levels, time to restock

Pent up consumer demand - now we rebuild the inventory.

Freeing of credit.

Etc.

says...

"The remarkable decline in macroeconomic volatility experienced by the U.S. economy since the mid-80s (the so-called Great Moderation)"

The pain of the seventies inflation fight(which Bernanke is dead set on forcing us to repeat)allowed 20 years of declining interest rates until Bernanke and Greenspan experimented with negative rates, debt based growth, and savings destruction. The sleeping inflation has awakened.

We were able to survive destruction of fiscal policy and sensible regulation during the administration of the first republican idiot, Reagan. Idiot II has been worse.

[Cynthia]

Lee A. Arnold,

So you thought that Gramm said Americans are a bunch of winos!

[awfully funny, yet awfully sad]

[Movie Guy]

Winslow R.,

If you are familiar with the U.S. Code that I cited above and the history behind such Code, then it is obvious as to why it was put in place. It worked.

The force of law is the issue. Regulations and the modification of such are still subject to the dictates of the law. When that law is stripped from the books or made worthless by legislative fiat, then there is no basis upon which regulations and systems manangement rests with any guarantee of compliance or success.

The banking industry laws are weakened to the point that we have no effective division of banking activity at this juncture, nor is the Congress willing (thus far) to regulate a range of new financial instruments. It is in the operation and off balance sheet execution of such instruments that substantial debt has been hidden. And as the buyers of such instruments vanished, the banks have been walking such debt onto the balance sheets.

I will take the force of law any day over unenforceable system regulations not based in law.

I recommend strongly that you research the writings of Satyajit Das, an independent debt derivatives expert. He wrote the most widely used global credit textbook, a 4,200-page reference work. His work includes explanations of how derivatives and other such instruments work.

He stated recently citing Churchill, "This is not the end or even the beginning of the end, though it may be the end of the beginning."

As explained last fall, "Defaulting middle-class U.S. homeowners are blamed, but they are merely a pawn in the game," he says. "Those loans were invented so that hedge funds would have high-yield debt to buy."

The problem is immense and there is no oversight based in U.S. Code that governs the operating activities of hedge funds. Greenspan and others insured that there would be no rules applied to the operation of the hedge funds.

You may want a system's approch. Fine. I want U.S. Code that forces banks, investors, and other entities to stary within identified legal confines. We can apply a system's approach to insure that those laws, now voided and others never applied, are applied to the activities of hedge funds, SIVs, and other instruments.

It's just not complicated: Few if any laws, No rules, No compliance.

Restore the legal framework. Then build a complaince system around it for verification.

[a]

I think interest-rate policy is more likely to be the difference between a debtor society (the U.S.) and a saver society (Euroland, as a rule). Debtors want low interests and inflation, savers don't.

[Winslow R.]

Movie Guy wrote: "The force of law is the issue. Regulations and the modification of such are still subject to the dictates of the law. When that law is stripped from the books or made worthless by legislative fiat, then there is no basis upon which regulations and systems manangement rests with any guarantee of compliance or success. "

We have a national currency brought into creation by international corporations regulated by national regulators. A quasi international/national financial system is not possible to regulate with national enforcement agencies.

"Restore the legal framework. Then build a complaince system around it for verification."

A monetary system either needs a currency created internationally with international regulators or a currency created nationally with national regulators.

How do you propose to limit currency creation only to U.S. citizens that can be prosecuted by U.S. law?

[Francois]

"The government cannot act counter cyclical."

That is exactly what a government ought to do. Be there (more interventionist) when things get bad for the population and fade into the background (less interventionist) when things are going well.

But for this model to work, one has to think in terms of fiscal discipline, a.k.a. save for rainy days and stop spending like mad just to play pederasts with the political donor class.

[Patricia Shannon]

save_the_rustbelt says...

"I've been wondering what causes recessions to end?"

Surviving businesses retrench, cut debt and build cash reserves, then they need to invest the cash.

depletion of finished goods inventory levels, time to restock

Pent up consumer demand - now we rebuild the inventory.

Freeing of credit.

Thanks.
But it seems to me the pent up consumer demand can't be a factor until things start getting better from the other factors.

[Patricia Shannon]

Movie Guy, Winslow R., I don't see that your remedies are mutually exclusive. Prevention and cures are both needed.

[baileyman]

It's because the European bank ONLY has an inflation mandate.

[paine]

"The core CPI grew a more modest 2.4% compared to June 2007, though that's still well above the Fed's long-term goal of 1.5% to 2%. . ..."

gotta love the absurd ignorance in that passage

"..more modest... " but "..well above..."

if the silk hat anti inflation fiends
have hysterics
the media has a freak out

[paine]

accelerated rises in the wage rate base
of the economy happen
the corporate system goes into convulsions

if not if its just commodity prices
moving up faster then wage rates

its called
lowering real unit labor costs

if you want a free open full employment
job market
---and since most of us live thru that market
maybe we oughta---
then you gotta have tradeable rights
mark up caps

otherwise
jobs and wages get hit to cure
a vicious worsening tail chase
created by the present system's
corporate pricing power

[paine]

i didn't even read the barnsters bit

i was captured by the evil premise

we can play harder price level ball
if the job victims have a better safety net

hope:

systems that irrationally and vicously
"solve" their episodic self created crises
at the exspense of some large hunk of the folks
eventualy get.... sublated