Thursday, December 16, 2010

Krugman Explains Our Unemployment

Paul Krugman, in his usual lucid prose, offers a differentiation of two kinds of unemployment, and tells us which one we have in the US. He takes issue with assertions of structural unemployment, and his conclusion is hardly surprising to those who follow the situation:


That is not the case in the United States today. Where’s the evidence of a structural rise in unemployment? There are no large groups of workers with rising wages; there are no large parts of the labor force at full employment, and there are no full-employment states, aside from Nebraska and the Dakotas. And inflation is falling, not rising.

Clearly, in contrast to what you may have heard, the United States is not facing an inflationary obstacle — if you look for evidence, there is none to be found. What the economy needs is more demand; provide that, and you’ll be amazed at how many willing, productive workers there are, currently sitting idle. 

No matter what Mitt Romney says, few people in America remain unemployed by choice or by laziness. But as long as demand is weak, there will be high unemployment, for reasons that hardly require explanation. Therefore government... the last institution with the power to do so... must stimulate demand. So far, it hasn't done nearly enough.


  1. I hope Obama doesn't do what our bunch of wankers are doing - creating up to a million job losses over the next four years by gutting central and local government and public services

  2. jams, in essence our wankers are doing exactly that. There are many "state" services that simply cannot be supported by state budgets alone, e.g. care for the indigent elderly, and by tradition the states have received federal assistance in paying for those. So as the 'publicans and Obama whack away at federal assistance to states, states necessarily simply reduce services formerly provided at no cost or greatly lowered cost to their residents. The 'publicans are downright proud of whacking the poor and, of late, the lower middle class. And a lot of these GOPers claim to be Christians. Go figure. I don't remember any quotes about "Blessed are the poor, for they shall be given an increased tax burden to pay for tax cuts for the rich," do you?

  3. Check John Boehner crying about growing up poor in Ohio on 60 Minutes at my blog. Can you say 'crocodile tears'? I knew you could.

  4. Welcome, Kay! I don't know if those are crocodile tears, but they're certainly a crock o' something... Thanks for posting that poor, poor baby's video... and thanks for stopping by here for what I hope is a bit of relief from such tripe.

  5. You're welcome. I'm adding you to my 'follow' list. I don't always do politics at my place either. Be sure to join Jams et al on Mondays for The Groaner of the Week!!! It's a hoot!!! I have to take a stand so people know bot everyone in Ohio is batshit crazy.

  6. Kay, that groaner really was one! Stella groaned as loudly as I did when I repeated it to her. You keep posting 'em, I'll keep groaning at 'em!



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