Monday, July 08, 2013

Defining Prosperity Down

New Krugman:

Friday’s employment report wasn’t bad. But given how depressed our economy remains, we really should be adding more than 300,000 jobs a month, not fewer than 200,000. As the Economic Policy Institute points out, we would need more than five years of job growth at this rate to get back to the level of unemployment that prevailed before the Great Recession. Full recovery still looks a very long way off. And I’m beginning to worry that it may never happen.


Put it this way: If unemployment rises from 6 to 7 percent during an election year, the incumbent will probably lose. But if it stays flat at 8 percent through the incumbent’s whole term, he or she will probably be returned to power. And this means that there’s remarkably little political pressure to end our continuing, if low-grade, depression. 

Someday, I suppose, something will turn up that finally gets us back to full employment. But I can’t help recalling that the last time we were in this kind of situation, the thing that eventually turned up was World War II. 

More here.

Click through if you want some more details about why the government is very unlikely to do anything about widespread long-term unemployment.  But suffice it to say that the overwhelming belief among the policy elite in the flawed assumptions of Reaganomics, in spite of masses of contradictory real world evidence, guarantee continued indifference to what amounts to an ongoing depression.  Throw in the fact that voters have to be REALLY outraged for economic pain to have some power in the voting booth, and, as Krugman observes, we're in for stagnation for years and years to come.

So the American Dream is over for most of us.  At least for the foreseeable future.  We live in shitty times.  Because that's what our leaders want.