Paul Krugman: The Fatalist Temptation

[LongTomH]

As usual, Professor Paul Krugman's latest op-ed at the NY Times hit the nail right on the head: The Fatalist Temptation:

I’m seeing more and more pieces like this one, in which pundits look at stubbornly high unemployment and declare that it must be structural — something we just have to live with, or at least something that will take long-term policies (translation — someone else’s problem) rather than mere stimulus, to correct.

Bah humbug. Actually, worse than that, because this kind of fatalism corrodes whatever will we might have to actually deal with our problems.

Why is unemployment remaining high? Because growth is weak — period, full stop, end of story. Historically, low or negative growth has meant rising unemployment, fast growth falling unemployment (Okun’s Law). Here’s a scatterplot of quarterly data since 1948, with pre-Great Recession observations in blue and observations since 2008 in red:

<snip>

But I’d add a second factor: the truth about our slump — that we know how to fix it, that we could fix it in a year if we had the political will, but that bad ideas and worse politicians are standing in the way — makes people uncomfortable. They want to believe that we have a deep problem, and that’s why we’re in such a mess.

The truth is that the fault lies not in our structure, but in ourselves.

[somone]

1. But our leader says we must do something about entitlements

and useless eaters :sarcasm:

[tcaudilllg]

2. Krugman fails.

He does not point to the cause of the evil: Republican antipathy.

[Demeter]

3. Don't Forget Official Democratic Collusion

we've been had. Repeatedly

[applegrove]

4. I saw some CNN newspeople talking about how unemployment was structural. They talked

about how we had to find new industries that would create jobs. I was shocked. It is all about the corporation ceos paying less in wages as they fall to their workers, upping productivity that way and getting a fatter bonus. No other way to increase productivity these days because they have already outsourced all then can and put the screws to workers re: bathroom breaks and such. No other way for those ceos to get bonuses.

Also too the boomers are retiring and it would have been an employees market in 2014 as the baby boomers retire en mass had the recession not hit. Which would have meant wages would rise.

[Cereal Kyller]

5. Too controversial

to comment on. :scared::hide::cry: