Monday, August 23, 2010


From the Houston Chronicle's Texas on the Potomac blog:

Here's some bad news from DC: the Hamilton Project has released a study that says it will probably take more than a decade for the nation to get back to full employment.

"If future job creation reaches about 208,000 jobs per month, the average monthly job creation for the best year for job creation in the 2000s, it will take almost 140 months (about 11.5 years) to reach pre-recession employment levels."

Of course, the economy could take off like a rocket as it did in the 80s and 90s, in which case it might take "only" five years.

The projection is right in line with warnings by economists Carmen Reinhart and Kenneth Rogoff about the aftermath of financial crises in their groundbreaking "This Time Is Different: Eight Centuries of Financial Folly."

More here.

At this point, I think it's safe to say that the economy, in all probability, will not "take off like a rocket." This shit's structural. That is, we've been having a neoliberal orgy for thirty years, which has resulted in all manner of weird imbalances, in terms of international trade, wealth disparity, and the very formulation of economic policy itself. The whole notion of letting the rich run everything, upon which most of neoliberalism is based, has turned out to be a very bad idea, not unlike the notion of letting the fox guard the hen house. Nonetheless, the American power elite continue to look at the economy in these terms, essentially dooming us to scratch and crawl our way out of chronic recession.

I'll meet you at the top, sometime in the 2020s, when I'm in my mid fifties.

This is, indeed, bad news. But what really pisses me off is that we knew what needed to be done to jump start the economy: abandon the Reaganomics bullshit and return to Keynisanism, pouring hundreds of billions into the economy, on the scale of spending during WWII. That's what pulled us out of the Great Depression, and it would have in all likelihood kept us out of this economic wilderness we're in now. But no. Neoliberalism continues to be very fashionable among our elected leaders who don't know much more about economics than the average high school freshman.

Maybe God will send us manna to eat while we wonder around the desert. If He exists.