Rumsfeldia: Fear and Loathing in the Decade of Tears
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Moving from an eight to a twelve hour day will almost certainly reduce employment. Basically, there are only so many working hours out there, and even with a reduction in take home wages, I don't think you'd see that much expansion of the productive economy.
Essentially, assuming a fixed number of working hours. Assuming that you increase labourers work day/period by 50%, that means that you've surplused a third of your workforce. 33% are being sent home because there's no work for them.
Now, assuming that the 33% is high, there's probably a bunch of positions where for one reason or another, that's not viable. You'd still be at say 28 to 25%.
I can't see the economy expanding sufficiently to sop up roughly 28 to 25% of new unemployment. Even with reduced wages/reinvestment in stock options. Let's assume some expansion though. The economy leaps ahead and expands to 10 or 15%, and we see a boom/bubble.
That still leaves between 10 and 18% of the working population cast adrift and into the lurch. Assume that this is on top of the regular unemployment rate which in the 80's ran between 5 and 8%, we are looking at 15 to 26% and a gutted social safety net.
Some interest things here.
First: Major social/economic dislocations. Basically, we have everyone scrambling to be in the lifeboat - ie, not to be part of that 33 to 25% that gets pitched overboard as redundant. I see a lot of fear, a lot of uncertainty and desperation. The ones who get to stay in the lifeboat are going to be scared and vulnerable, they can get replaced really easy.
Second: Goodbye unions. You can't maintain effective labour solidarity when there's a line up ready to take your job, or any job. Goodbye any kind of bargaining power. Don't like having your wages shifted into stock options? Tough luck, at least you still have a job, that can change real quick.
Third: Artificial expansion of the labour pool will depress labour prices. This will be exaggerated by the 'stock option route' which I think is designed to reduce the up front cost of labour even more. I suspect that what we'd see is a shift in the salary structure - the 'stock options route' would swallow union dues and encroach on or devour pension plans and health plans before actually going into take home pay. It would go into take home pay, but not before picking up the low hanging. There might be an illusory sense of wealth, since stock options represent 'assets' that, as Jonathan Edelstein has pointed out, could be used as security and borrowed against for credit.
Fourth: Who gets laid off. I suspect that it won't be on the basis of seniority. Rather, the targets for layoffs are probably going to be the vulnerable constituencies - blacks, women, immigrants and especially the politically nonconforming. Basically, all groups that are already on the outs with and marginalized by the Rumsfeld administration. There's the 'back to the 50's and get women out of the workplace shtick/jobs for men' shtick. There's racial divide and rule politics. There's going to be strong incentive to have and hold the 'right' views, particularly if you want to keep your job.
Fifth: Assuming that the reduction in labour costs driven by these various factors takes place, then you've got a lot of extra capital or extra revenue coming into the hands of business. It's like dumping pure sugar into the bloodstream. So you'll see some kind of boom. The economy will expand, or it will appear to expand. Businesses will do well, they'll expand operations, diversify, invest. On the surface, Rumsfeld will be able to take credit for an economic boom, and he'll be in a position to promise that the boom will eventually reach out and lift all the boats, including those temporarily unemployed or surplused. Basically, for those who have jobs, there's a bright future just around the corner. For those who don't have jobs, there's a future with a job just around the corner. He can get some mileage out of that.
Sixth: There's limits to the boom. Everything seems to show a depressed consumer economy with people shifting to credit and blowing through their savings, either to maintain their lifestyle while employed, or to keep from starving if unemployed. Depressed consumer economy means depressing the market for goods and services, and that means that production and productive capacity is excessive - there's no one to buy. There's no indication that the US is doing gangbusters international markets. So, sooner or later, you're going to see a stall or contraction in the productive economy, with unemployment rates freezing or starting to climb, new rounds of layoffs, etc.
Seventh: So there's a problem. Business has all this cash from artificially depressed wage costs. The consumer economy can't expand sufficiently to drive that cash into investment. Where does it go? Speculation, I think. Acquisition, lots of buy ups. And a lot of reckless investing. I think we'll see the Savings and Loans fiasco amplified by crack. The foundation will be different obviously - the savings and loans fiasco was a matter of deregulating the industry and creating a desperate race for the big money return. This syndrome is going to be, as I said, injecting pure sugar into the veins in the form of record amounts of cash in business profits, and trying to make something of that. In the long run, its going to crash out. Possibly big time. The best anyone can hope for is a kind of ongoing reallocation of assets and wealth. Worst case is catastrophic implosion.
How long will that take? Assuming artificial exuberance, all kinds of recklessness, and a commitment by Rumsfeld to keep the bubble going as long as possible, he might get a few years, maybe more.
And by that time, Americans might well be trained to drink the Kool-ade, bow and scrape on command and enthusiastically eat the weakest among them.
Essentially, assuming a fixed number of working hours. Assuming that you increase labourers work day/period by 50%, that means that you've surplused a third of your workforce. 33% are being sent home because there's no work for them.
Now, assuming that the 33% is high, there's probably a bunch of positions where for one reason or another, that's not viable. You'd still be at say 28 to 25%.
I can't see the economy expanding sufficiently to sop up roughly 28 to 25% of new unemployment. Even with reduced wages/reinvestment in stock options. Let's assume some expansion though. The economy leaps ahead and expands to 10 or 15%, and we see a boom/bubble.
That still leaves between 10 and 18% of the working population cast adrift and into the lurch. Assume that this is on top of the regular unemployment rate which in the 80's ran between 5 and 8%, we are looking at 15 to 26% and a gutted social safety net.
Some interest things here.
First: Major social/economic dislocations. Basically, we have everyone scrambling to be in the lifeboat - ie, not to be part of that 33 to 25% that gets pitched overboard as redundant. I see a lot of fear, a lot of uncertainty and desperation. The ones who get to stay in the lifeboat are going to be scared and vulnerable, they can get replaced really easy.
Second: Goodbye unions. You can't maintain effective labour solidarity when there's a line up ready to take your job, or any job. Goodbye any kind of bargaining power. Don't like having your wages shifted into stock options? Tough luck, at least you still have a job, that can change real quick.
Third: Artificial expansion of the labour pool will depress labour prices. This will be exaggerated by the 'stock option route' which I think is designed to reduce the up front cost of labour even more. I suspect that what we'd see is a shift in the salary structure - the 'stock options route' would swallow union dues and encroach on or devour pension plans and health plans before actually going into take home pay. It would go into take home pay, but not before picking up the low hanging. There might be an illusory sense of wealth, since stock options represent 'assets' that, as Jonathan Edelstein has pointed out, could be used as security and borrowed against for credit.
Fourth: Who gets laid off. I suspect that it won't be on the basis of seniority. Rather, the targets for layoffs are probably going to be the vulnerable constituencies - blacks, women, immigrants and especially the politically nonconforming. Basically, all groups that are already on the outs with and marginalized by the Rumsfeld administration. There's the 'back to the 50's and get women out of the workplace shtick/jobs for men' shtick. There's racial divide and rule politics. There's going to be strong incentive to have and hold the 'right' views, particularly if you want to keep your job.
Fifth: Assuming that the reduction in labour costs driven by these various factors takes place, then you've got a lot of extra capital or extra revenue coming into the hands of business. It's like dumping pure sugar into the bloodstream. So you'll see some kind of boom. The economy will expand, or it will appear to expand. Businesses will do well, they'll expand operations, diversify, invest. On the surface, Rumsfeld will be able to take credit for an economic boom, and he'll be in a position to promise that the boom will eventually reach out and lift all the boats, including those temporarily unemployed or surplused. Basically, for those who have jobs, there's a bright future just around the corner. For those who don't have jobs, there's a future with a job just around the corner. He can get some mileage out of that.
Sixth: There's limits to the boom. Everything seems to show a depressed consumer economy with people shifting to credit and blowing through their savings, either to maintain their lifestyle while employed, or to keep from starving if unemployed. Depressed consumer economy means depressing the market for goods and services, and that means that production and productive capacity is excessive - there's no one to buy. There's no indication that the US is doing gangbusters international markets. So, sooner or later, you're going to see a stall or contraction in the productive economy, with unemployment rates freezing or starting to climb, new rounds of layoffs, etc.
Seventh: So there's a problem. Business has all this cash from artificially depressed wage costs. The consumer economy can't expand sufficiently to drive that cash into investment. Where does it go? Speculation, I think. Acquisition, lots of buy ups. And a lot of reckless investing. I think we'll see the Savings and Loans fiasco amplified by crack. The foundation will be different obviously - the savings and loans fiasco was a matter of deregulating the industry and creating a desperate race for the big money return. This syndrome is going to be, as I said, injecting pure sugar into the veins in the form of record amounts of cash in business profits, and trying to make something of that. In the long run, its going to crash out. Possibly big time. The best anyone can hope for is a kind of ongoing reallocation of assets and wealth. Worst case is catastrophic implosion.
How long will that take? Assuming artificial exuberance, all kinds of recklessness, and a commitment by Rumsfeld to keep the bubble going as long as possible, he might get a few years, maybe more.
And by that time, Americans might well be trained to drink the Kool-ade, bow and scrape on command and enthusiastically eat the weakest among them.
Doesn't this describe Enron? Wasn't a lot of the wealth of the tech bubble in stock options?
Considering 'constructive destruction' I can see the American economy becoming reliant on the hungry market for arms around the world.
Hey, longtime follower here, glad to see this is getting updated again! 
And I have a quick question: what were the Uplifting Corporations as the Engine of Our Economy and the Creators of Prosperity Act and the Religious Liberty Act again? It's been a while, so I forgot. The former involved corporate voting rights, correct?
And I have a quick question: what were the Uplifting Corporations as the Engine of Our Economy and the Creators of Prosperity Act and the Religious Liberty Act again? It's been a while, so I forgot. The former involved corporate voting rights, correct?
Hey, longtime follower here, glad to see this is getting updated again!
And I have a quick question: what were the Uplifting Corporations as the Engine of Our Economy and the Creators of Prosperity Act and the Religious Liberty Act again? It's been a while, so I forgot. The former involved corporate voting rights, correct?
The Uplift Act allows corporations to vote and, in certain cases, run for election and hold office. The Religious Liberty Act allows recognized churches to form and administer to corporations as part of their religious mission. Said corporations do not need to be involved in religious activities.
I don't see either act not getting smashed to pieces the moment a federal judge opens his newspaper, but there's been no indication of a legal challenge.
Orville_third
Banned
There's one thing you may have forgotten. Some churches already have corporations. The LDS have several.
http://en.wikipedia.org/wiki/Deseret_Management_Corporation
That's because the courts have been cowed into submission following Thurgood Marshall's near-impeachment.
And the crash of Rumsfeldia is gonna be an epic train wreck.
Mapping out the long term forecast for Rumsfeld's economic policies are terrifying. We're talking a collapse on the scale of Weimar Germany or modern Argentina.
That's raises a good point, what's the Supreme Court, not to mention the lower Federal Courts, like under Rumsfeld?
Think this from a year ago is revealing of what's going on:
Problem is that Rumsfeldia is obviously imploding. It's just a matter of when he's out of power.
Problem is that Rumsfeldia is obviously imploding. It's just a matter of when he's out of power.
If there's any equivalent of the "Special Relationship" in ATL, it would likely be the "Entente cordiale".
The Soviet Union is probably closer to OTL's China, in that it's a quasi-capitalist state that's more Communism-In-Name-Only. Maybe something like a slightly more red Sovereign Union.
More than an year ago, Drew described TTL Soviet Union in a way that could be summarised like this: "OTL People's Republic of China minus all the outsourcing".
Yes, something close to that -- perhaps also think in terms of the model Ryzhkov is using, Chile - where Pinnochet ran an authoritarian state politically while his "Chicago Boys" created a free market model.
With regard to the USSR and Europe - an entente cordiale may describe it, although there is a dual dependency at work here - Europe needs Soviet gas and oil, and Ryzhkov's reforms require access to European markets and capital. This reciprocity of needs will draw both sides closer together. As a consequence, there is a declining tendency in Europe and Moscow to view the other as a potential military adversary (with the exception of the Russian historical wariness of the Germans) and more a sense that they have more in common than what separates them.
This can hold provided the Europeans don't take on a reform the Soviet political system crusade.
So far
Rumsfeld has been able to appoint only one Supreme Court Justice, and that was the relative centrist Bob Dole, who was appointed early in Rumsfeld's Administration when Rummy was still trying to look reasonable. I don't think any of Justices will resign willingly in this climate.The attempt to impeach Justice Thurgood Marshall was an early attempt at political opportunism and polarization - and it failed. Given that it failed, it might well embolden federal judges - for now.
But, Rummy has had five years in office (up to 1986) to appoint Federal Judges, and one can imagine more right-of-centre and pro-business judges being appointed. To placate the CVs he might also sneak a few Roy Moore http://en.wikipedia.org/wiki/Roy_Moore types through as well.
Of course the implications of the 28th amendment are that he will have less trouble from the Senate in the future with any odd ball appointments - should he, of course, survive that long, and should the amendment pass.
In that case you could consider FLG'72 to be a complete story.
Three alternatives suggest themselves and are open to further TLs.
1] Reagan wins in 1980, thus returning to a TL similar to OTL, but still with echoes from the shocks of the more disturbed '70's (and of course, the utter desolation of China).
2] Hugh Carey wins in 1980, thus creating a whole new TL for the 1980's, where a Carey Administration has to deal with the shocks of the '70's.
3] Similar to above, except that Pete McCloskey wins in 1984, defeating a reputdated Rumsfeld, with appropriate problems for the GOP going forward, and the McCloskey Administration having to repair the damage.
4] I'm open to other ideas on a different sequal to FLG'72 - this being AH nothing is written in stone.
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