Krugman: Policymakers' Caution May Be Leading Us To 'Long-Term Jobs Catastrophe'
Paul Krugman (who really is freaking out about the administration's economic policies) explains why their inaction on high unemployment is so dangerous:
I really don’t think people appreciate the huge dangers posed by a weak response to 9 1/2 percent unemployment, and the highest rate of long-term unemployment ever recorded.
Right now, I’m reading Larry Ball on hysteresis in unemployment (pdf) — the tendency of high unemployment to become permanent. Ball provides compelling evidence that weak policy responses to high unemployment tend to raise the level of structural unemployment, so that inflation tends to rise at much higher unemployment rates than before. And the kind of unemployment we’re experiencing now, with many workers jobless for very long periods, is precisely the kind of unemployment likely to leave workers permanently unemployable.
And there are already indications that this is happening. Bill Dickens, one of the people has who worked on downward nominal rigidity, tells me that the Beveridge curve — the relationship between job vacancies and the unemployment rate — already seems to have shifted out dramatically. This has, in the past, been a sign of a major worsening in the NAIRU, the non-accelerating-inflation rate of unemployment.
The point is that while policy makers may think they’re being prudent and appropriately cautious in their responses to unemployment, there’s a good chance that they’re prudenting and cautiousing us into a long-term jobs catastrophe.
I do hope that his freakout over this includes pitchforks, torches and nooses.
Vote GOP and move forward to the 18th Century.
Because behind all the economic jargon is a simple fact: this is the stuff revolutions are made of.
When folks are desperate to feed their families and all hope seems lost, then the demise of the current system doesn't look so scary anymore. They start considering alternatives, and violence to secure their needs (and rights) is one of them.
The nativity of the dead right is my term du jour…
statusquObama, change you can only pretend in
Besides, according to Art Laffer's cocktail napkin we don't need no stinkin' jobs. Once those tax cuts are permanent, we'll all be living off our investment income.
Vote GOP and move forward to the 18th Century.
so, as per chuck todd: "from now on it's Obama's fault."
the truth is, 19 months in, Obama needs a close up look at this country, just like Sherrod said.
Some stuff you can't make up!
He's still looking for the country's "better side".
Good luck with that.
Vote GOP and move forward to the 18th Century.
used to cause politicians to freak out.
I guess until we vote these fuckers out, and they join us
in the unemployment line, they won't care.
Hell, even then they won't. They can always go and get a
7-figure a year salary from some lobby.
Hell, you want to play "Deficit Hawk?"
Fine.
We'll heat up the tar to boiling.
Then stick the feathers on you.
There, now you look like a hawk.
Then, we take you to the Washington Monument and see
if you can fly, you out-of-touch MFers.
mortgage favors, Christopher Dodd, still free to guzzle the fabled bean soup in the Senate lunch room?
Which means less income tax both federal and state, and state sales tax, and increased demands on an underfunded social net which will also cost additionally.
Meanwhile CEO's make out like bandits.
Can you imagine ross perot and warren buffet french-kissing?
Diabolus est Deus Inversus
Hmm..which one is the contortionist?
Vote GOP and move forward to the 18th Century.
The midget...
Diabolus est Deus Inversus
That's a horrid image.
Just doin' my job ma'am...
Diabolus est Deus Inversus
Good. Now moving on....
Hasa Diga Eebowai
lost in the wilderness of their models and equations and their quaint expectations of the way things ought to go if you can tweak numbers.
Actually, most regression analysis as a tool to model human behavior has been completely delegitimized.
Vote GOP and move forward to the 18th Century.
what?
Hasa Diga Eebowai
How did modeling human behavior work out in the last crash.
They may still be using them, but the fact is...it's snake oil.
You can't model greed, especially when the first premise of capitalism is that greed doesn't exist.
It's why Randianism is total bullshit.
Vote GOP and move forward to the 18th Century.
modeling human behavior. Even climate modeling is easier. The climate, at least, follows the laws of physics. No model is ever perfect that's why it is a model. I'm not really disagreeing with you generally (except that you can model greed)because when conditions become chaotic all models lose their predictive power. I was just wondering why you're picking on regression analysis which is just a statistical technique for fitting a curve to data and,as a technique, hasn't been discredited by anybody.
Hasa Diga Eebowai
...is that corruption doesn't exist--it's just "enlightened self-interest".
Third premise is that unemployment is all voluntary--we're all either too lazy-assed to work for them or to go develop our own multinational corporation.
Fourth premise is that if securities are being traded, America has no economic problems and we are out of the recession.
Obvious fifth premise is that capitalists are either delusional or lying their asses off. You make the call.
It's really rather simple.
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
Sorry, don't mean to blogwhore, but this is a great article.
A Decade of Declining Housing Prices
http://www.counterpunch.org/whitney07272010.html
Vote GOP and move forward to the 18th Century.
It is a good article, albeit pretty damn depressing.
Banks are playing the same game that the commodities traders have been playing with our markets. In the same way withholding oil in barges offshore drives up prices, so does banksters holding houses off the market to artificially drive up prices.
You'd think we would have rules about this sort of thing, but apparently they all were either nullified or their regulatory agencies were staffed with pointless industry goons.
Maybe if we didn't constantly let the foxes watch the henhouse under the guise of "but the fox knows how the hens work". Fidiots.
..government taking over their lives; what about corporations and banks? Where's the anger towards them? Or are Progressives solely responsible for that?
Mickey: "It was an epiphany. Do you know what an epipany is?"
Keoni: "NOT NOW MICKEY!"
Most public anger is misdirected and misguided. Ignorance is impotence, so all poeple do is bitch...they don't even take the time to understand what their bitching about. The public is a two year old that doesn't want to go to bed early. Waaaah...i don't want to sleep...waaah...I'm tired....waaaah...I don't feel good....waaaah...I don't want to go to sleep.
Collectively...we...are...the...dumbest...people...on...the...planet.
Vote GOP and move forward to the 18th Century.
..none of it has tried to contact us!
Mickey: "It was an epiphany. Do you know what an epipany is?"
Keoni: "NOT NOW MICKEY!"
Ingorance fuels impotent rage, that inchoate beastly mindset that spews all over the place at the behest of our Corporate puppetmasters.
From it, we get the guy who, while sitting at a standstill at a red light, blocks cross flow traffic, just because he can, throwing up his middle finger to punctuate his rude obstructionist stance.
From it, we get the gal who condescends to 'help' an endless line of unemployed people, sneering occasionally as she explains that some have failed to complete a random document and are no longer eligible for their benefits.
From it, we get the countless thoughtless, hate-filled acts and utterances that diminish the humanity of us all.
I am close to the end, myself, certainly the end of my internet access since I have insufficient income now to pay my rent and utilities for the foreseeable future. I will be homeless or dead this coming month, and all my activism (and my contributions to our ongoing efforts to sustain freedom and our democracy) will be moot.
One's relative insignificance can be a hard pill to swallow...
have an extra bedroom
every time you throw a little mud , you lose a little ground .
Keep the Internet, find an overbooked individual, move into their spare bedroom, and do their housework/babysitting in exchange for 3 squares and the wireless.
Do not kill yourself. Somewhere Out There is a corrupt human resources man holding dead peasant insurance on you, and you do not want that sucker to win the game over your dead body.
Dead progressives win no advances.
But then Mommy government makes it allll better...she tells us tales about how great we are, and how we can go to the moon, and how if we cut taxes, beautiful unicorns will fly out of the asses of rich people and the world will be a better place.
Vote GOP and move forward to the 18th Century.
Corporations are now spending money on Repugnicant candidates like there's no tomorrow.
http://www.statesmanjournal.com/article/20100...
there IS no tomorrow...
If you are age 50 and up, you are now the equivalent of age 70 in the corporate workforce. If you've been unemployable for two years and you're in your 50s, you are mostly permanently unemployable.
If you are in your 40s, you are now the "older" worker who will be first in line for layoffs (higher-paid "old" people suck too much profit from The Corporation, and their health benefits become inconveniently expensive).
We may be living longer, but the corporate life-span of the average worker has shrunk to nearly half of what it used to be.
Citizens United enables corporations to establish republican/conservademon ideological dominance throughout government. The side effect is that the financial rape of people who are unemployable is constitutionally permissible.
I think you're demonizing Republicans too much.
Don't forget the Blue Dogs and the majority of the Democratic party that is just as corrupt and awful as the Republicans. Citizens United is sure to keep Blue Dogs in office as well.
It's not about black and white, red and blue, republican and democrat... It's about rich and not rich, or to be precise, "on the payroll of the rich" and "not on the payroll of the rich".
conservademons = conservaDEMons = conservadems = Blue Dogs = republican scum.
There are some Democrats fighting republican scum. Don't suggest there's no difference.
It's not about parties. It's about corporate power and governance.
We have already lost the fight, however, because we've been conquered and divided. If we ever decide to unite, then we have a chance of overthrowing the plutocracy that is now in place and growing.
It is politically incorrect to undertake genocide. But it is fiscally responsible to live within ones means. If your "means" don't allow you to live, how is it anyones fault but your own?
The "elites" will start by lowering the standard of living in America. Can't have the workers of the world expecting to live like the kings of the American workforce. I have heard this comeing from many conservative web posts. They start by saying that American workers have become too used to having the good things in life..ie; electricity, heat, good food (debatable), and other "non-esentials"
And besides, even the poorest in our nation live better than Kings used to. Don't you read history? Of course they never are talking about them, just those beneath them. It is a sad state of affairs, but I am afraid this is how it is going to be.
Hey! Go back to eating your corn syrup and flavor-ice. The rich people who run everything didn't say you could speak ...
I'm sure I'm not going to see Social Security or Medicare benefits. Conservatards are going to gut our social support systems to the cheers of Palin-supporters, "Birthers", and every other kind of moron this country has to offer.
When unemployment rises, consumption drops.
Lowered consumption means factories produce less.
When factories produce less, they need fewer workers.
So high unemployment becomes permanent.
That's our current situation.
The ONLY way to have avoided this situation AT THE OUTSET was for government to spend large amounts of money on (a) unemployment benefits and (b) projects that employ large numbers of people and help jumpstart the new economy.
Since no one did that, we're screwed. Businesses have downsized, laying off all "excess" labor and shifting the burden of production to those remaining few. And so long as consumption is sluggish (which it will be so long as unemployment is high) these businesses will not be hiring.
NOW it will take MASSIVE government spending on WPA type projects to turn this around. AND it could be done. We have crumbling infrastructure, no high speed rail where it is needed, an ancient electricity grid, not enough wind turbines or solar farms.
And don't let ANYONE tell you we don't have the money. What we don't have is the collective political will to do this.
Well worth watching:
Van Jones Address Netroots Nation 2010
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
Another fallacy of current economic doctrine is that decreases in consumption will adjust corporate greed. Shifts in production to Third World countries put an additional burden of unemployment on those who are already in grinding poverty, and The Boys simply resume or accelerate their investment gaming to cash out the difference via securities trading.
http://www.ctheory.net/articles.aspx?id=652
How depressing. I am 54 years old, and have been struggling for the past three years to become a teacher. I have been unemployed or underemployed for the past two years.
At a time when excellent math teachers are in short supply, you'd think I would be snapped up quick, fast, and in a hurry. You'd be wrong.
Some days, I cannot claw my way out of the stultifying ennui that goes hand-in-hand with abject depression.
Never in a million years would I have envisioned myself unemployed and unemployable at this stage of my life.
The Corporate Megalomaniacs may not be holding a gun to my head, but they are killing me as surely as though they were.
hang a sign in your yard advertising your service.
..person in your situation, have you considered "Private tutoring"? or SAT prep? It might be a way to use your skills and get something going. Just a thought.
Mickey: "It was an epiphany. Do you know what an epipany is?"
Keoni: "NOT NOW MICKEY!"
surfjac, I am pursuing those and any other opportunities I can think of.
BTW, moraltrumpslegal richly illustrated what I addressed in another thread: the now pervasive inchoate, impotent rage that fuels the countless thoughtless acts and utterances that diminish the humanity of us all.
Tue, 07/27/2010 - 08:54 — moraltrumpslegal
hang a sign in your yard advertising your service.
______________________________________________________
I'm hanging a job wanted sign on my wang...
Diabolus est Deus Inversus
I suspect that many African-American parents would love some additional tutoring for their children's futures. See if a church would allow you one of their meeting rooms in exchange for a cut of the take. Also check with Indian and Chinese parents, who can pay better but want that competitive advantage for their young'uns.
Both the NeoConservatives and NeoLiberals must be not-so-secretly rubbing their hands in glee. The shrinking Middle Class continues to fall off the job market chart into the ever growing "great unwashed masses" of displaced homeless unemployed. It provides the Powers-That-Be with the opportunity to not only acquire a greater portion of the remaining wealth of this country at pennies on the dollar (like real estate), but to also disenfranchise the voting public. Not only that, but their ability to cast off that less tractable portion of the citizenry will save natural resources at the same time that a brand spanking new optional preemptive overseas military adventure (against Iran) begins to spin up.
American Exceptionalism and the siren call of empire demands a fresh new crop of cannon fodder to feed the Crony Corporatist Oligarchy and their wholly-owned MICC. We will have the choice of dying (quickly) either on our knees here at home, or on our feet in combat overseas. The one option that the Powers-That-Be have not factored in is the potential for the growing "great unwashed masses" deciding to die (quickly) on our feet in combat against them, here at home.
It is said that the most dangerous people in the world are those who have nothing left to lose, with no hope of change for the better. When enough of such people self-organize, pitchforks and torches appear, and rumors of revolution waft on the air. If the Oligarchs aren't nervous, they should be ...
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
up until you mention what the powers that be have not factored in.
Hell yeah they've factored that in. Trust me, they've got a lot better ways of controlling the unruly mob than the unruly mob has of knocking the system over. Mainly the PTB have control over the mind - people are still more distracted than ever. I'm a Huxley-an - we're too distracted and too stupid to know or consider what's going on. The PTB have it on us in regard to passive control - its less bloody and less obvious.
Before enlightenment - chop wood, carry water. After enlightenment - chop wood, carry water.
small groups of disaffected citizens that resort to violence against them, but I rather doubt that they have workable plans to suppress up to 1/10th of the population up in arms and hunting down the wealthy oligarchs. Even the Military Commissions Act, which establishes the legality of foreign troops (Canada and Mexico) on USA soil to help suppress rebellion, doesn't account for 30 million freedom fighters.
No civilization is beyond the anarchy of the "unwashed masses" after 72 hours of no food, water, or shelter. There will be unavoidable violence. The question is, will soup lines and tent cities be up to the task? I think not ...
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
When the academics and managerial classes lose it all, the next "Rights of Man" will appear. Yesterday's torches and pitchforks will be tomorrow's corporate viruses and hacks (I hope...)
The pitchfork and torch class will show up at the polls to choose between the truck-stop king with the campaign managed by the heroin financier/Watergate whitewasher, vs the C Street secessionist, as in Tennessee's race, and believe that the one with the strongest connection to the Savior will pass the Savings on. Those who never had much to lose will retreat to the woods with a bottle of Mad Dog or a meth pipe. Those who have lost much will have the anger and the cred to get the job done.
this guy's work. It contains some real gems: "they emphasized the “insider-outsider” theory of wage bargaining. When workers become unemployed, the remaining employed workers increase their wage targets, preventing the unemployed from getting their jobs back. In my view, however, there is little evidence for this kind of hysteresis effect.
There is more evidence for stories in which the long-term unemployed become detached from the labor market. These workers are unattractive to employers, or they don’t try hard to find jobs. These stories fit evidence that hysteresis effects are stronger in countries with long-lived unemployment benefits.
He's right about the first part. There's precious little evidence for wage inflation caused by workers increasing their wage targets. I'm not so sure about the second part.
Hasa Diga Eebowai
done for us for that matter. As much as I love technology and gadgetry I see little hiring going on in that sector either. Oh wait, you can apply to be a app and software beta tester! No pay but you get to work for a company.
why aren't they setting an example by pushing through immediate pay cuts for all government workers who make over a certain amount, and pay freezes for the rest?
I didn't see it mentioned above, but the article link is wrong ... here's the right one:
http://krugman.blogs.nytimes.com/2010/07/26/p...
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