Lemon Socialism Lives

by Jacob Davies

You have to hand it to the New York Times: they really know how to pick a perfect link-bait case study. This one is a classic:

Tremaine Edwards, 35, a former computer technician who had been unemployed for two years before he was hired in May by Gallery Guichard, a private gallery in Chicago. Mr. Edwards now earns $10 an hour, financed by the government, through the Put Illinois to Work program, to maintain the company’s Web site, curate exhibits and run gallery events.

The trick is to pick an example that isn't instantly, universally horrific - "Government Pays Criminals To Drown Kittens" - but instead, one that can be played straight for the whole story. Sure, the government spending money to subsidize failing private art galleries may sound outrageous to anyone who actually works for a living, but I'm sure for a key segment of the NYT's audience - the microscopic proportion of people who can afford to buy art at fancy galleries - this is a heartwarming tale of preserving cultural institutions.

So, well played, NYT. This case is an art gallery failing for lack of sales. Now, generally we don't want businesses to fail in a major recession, it's true. But the main reason we don't want that to happen is that their employees join the unemployed. Non-viable businesses failing is part of the normal economic process, even during a recession.

But this program - at least in this case - manages to both prop up failing businesses with direct subsidies and cause them to lay off their paid employees:

Mr. Guichard said he expected to keep three of the five new workers after the program ends. But the month before it began using the program, the gallery had four employees on its payroll (in addition to a few who worked hours as needed); none of these workers are still there. Three left on their own, said Mr. Guichard, in part because they were frustrated after their hours were cut and their income fluctuated.

But one — Mr. Guichard’s cousin Juan Rodriguez — was laid off.

Mr. Guichard said he wanted to keep Mr. Rodriguez, a 24-year-old, precocious curator and a “hard worker,” but decided not to because Mr. Rodriguez did not qualify for Put Illinois to Work.

Instead, Mr. Guichard hired Mr. Rodriguez’s younger brother, Patrick, whom the gallery now can employ free.

Genius. Just think what this would do for the stock market if extended to the whole economy - the government could pay all private workers with borrowed money, saving business owners the fuss and bother of having to share any of the profits - and saving the rest of us from having to witness any filthy, worthless make-work projects paid for with government money, like renovating schools, building roads, or improving park facilities.

Comments

[John Thullen]

Wow! Ten bucks an hour.

If you stuff a burlap bag with lentils, it makes a great pillow at night in the back seat of your car.

[Kenneth Almquist]

"This case is an art gallery failing for lack of sales.... Non-viable businesses failing is part of the normal economic process, even during a recession."

It's not at all clear from the story that the business was non-viable. Sales were indeed down, in part because of the recession and in part because lower sales meant the gallery had to cut staff, which presumably reduced sales further. That doesn't mean that the business couldn't have survived and eventually recovered.

It's not a good thing for a business to fail during a recession if the only reason the business is non-viable is that we are in a recession. When businesses fail, that means the economy can't get back to full employment until other businesses are created, or other existing businesses expand, to take up the slack.