With Paul Krugman’s latest ob-ed that describes in simple terms the impending social, political, and economic disaster awaiting America due to the employment situation, the silly arguments here at Daily Kos by economics-oriented bloggers, that the recovery is on the way and we’re all SAVED, should be discredited by the information pointing to a Japanese "lost decade" for America. If we were about to "recover" then why do we need another stimulus package to forestall the "disaster" of which Krugman speaks? What purpose does it serve to show that businesses are "growing" predominantly due to slashing costs (mostly employees) when for all intents and purposes America is still in the depths of a horrific recession and likely will be for years to come?
NYT, 7/12/09
Most economic forecasters now expect gross domestic product to start growing soon, if it hasn’t already. But all the signs point to a "jobless recovery": on average, forecasters surveyed by The Wall Street Journal believe that the unemployment rate will keep rising into next year, and that it will be as high at the end of 2010 as it is now.
Now, it’s bad enough to be jobless for a few weeks; it’s much worse being unemployed for months or years. Yet that’s exactly what will happen to millions of Americans if the average forecast is right — which means that many of the unemployed will lose their savings, their homes and more.
To head off this outcome — and remember, this isn’t what economic Cassandras are saying; it’s the forecasting consensus — we’d need to get another round of fiscal stimulus under way very soon. But neither Congress nor, alas, the Obama administration is showing any inclination to act. Now that the free fall is over, all sense of urgency seems to have vanished.
This will probably change once the reality of the jobless recovery becomes all too apparent. But by then it will be too late to avoid a slow-motion human and social disaster.
But as long as the GDP is growing at 1%, we’re SAVED, we’re RECOVERED! Right.
These econ-oriented bloggers seem clueless to the effects of 10-12% unemployment as well.
With banks facing the "ticking time bomb" of a commercial real estate collapse along with the continued stresses of residential real estate (toxic assets holdings, increasing unemployment causing further foreclosures, etc.), nobody knows what the fuck is going to happen so let’s stop pretending that we do.
Here's my diary on the commercial real estate situation: Link.
Krugman sees something akin to Japan’s "lost decade" unless we do something bold.
That’s not a recovery folks, that’s a disaster.
It's time to start facing the facts and addressing the situation, not cheerleading an economy on the brink of disaster. We likely need another stimulus; that needs to be addressed. Most American companies are outsourcing American jobs wherever they can; that needs to be addressed.
Stop the cheerleading and start leading econ bloggers.