"Easy Useless Economics" by Paul Krugman at the NYTimes.

[applegrove]

Easy Useless Economics
by Paul Krugman at the NYTimes.


http://www.nytimes.com/2012/05/11/opinion/krugman-easy-useless-economics.html?_r=1


"SNIP................................................................

A few days ago, I read an authoritative-sounding paper in The American Economic Review, one of the leading journals in the field, arguing at length that the nation’s high unemployment rate had deep structural roots and wasn’t amenable to any quick solution. The author’s diagnosis was that the U.S. economy just wasn’t flexible enough to cope with rapid technological change. The paper was especially critical of programs like unemployment insurance, which it argued actually hurt workers because they reduced the incentive to adjust.

O.K., there’s something I didn’t tell you: The paper in question was published in June 1939. Just a few months later, World War II broke out, and the United States — though not yet at war itself — began a large military buildup, finally providing fiscal stimulus on a scale commensurate with the depth of the slump. And, in the two years after that article about the impossibility of rapid job creation was published, U.S. nonfarm employment rose 20 percent — the equivalent of creating 26 million jobs today.

So now we’re in another depression, not as bad as the last one, but bad enough. And, once again, authoritative-sounding figures insist that our problems are “structural,” that they can’t be fixed quickly. We must focus on the long run, such people say, believing that they are being responsible. But the reality is that they’re being deeply irresponsible.

What does it mean to say that we have a structural unemployment problem? The usual version involves the claim that American workers are stuck in the wrong industries or with the wrong skills. A widely cited recent article by Raghuram Rajan of the University of Chicago asserts that the problem is the need to move workers out of the “bloated” housing, finance and government sectors.

...............................................................SNIP"

[xtraxritical]

1. Paul Krugman knows his macro economics well.

Austerity at this time is suicidal for this nation.

[provis99]

2. ugh. the University of Chicago.

the University of Chicago seems to be the national center for bad ideas and libertarian crap, whether in the economics department, the sociology department, or the political science department. The ones that I've met in these departments are true believers and fanatics, with no grounding in the real world.

[Left Coast2020]

3. Dr. Krugamns article last week was to-the-point.

Pertaining to the steps that need to be taken to get this economy running on all cylinders again. He laid out specific steps that need to be taken. I was curious because I am always curious of what Professor Krugman has to say. And believe me, I ride my bike to get around. I see waaayyyy too many closed warehouses, restaurants, retail stores, and other businesses wherever I go. Its depressing.