MSNBC.com reports today that its panel of mostly business economists says no more government stimulus spending is needed:
“Though unemployment will remain stubbornly high, and the economic recovery sluggish in 2010, the government doesn’t need to provide another round of stimulus spending to keep the economy afloat, they say.”
That’s a mighty big “though” there! Just how stubbornly high do they expect unemployment to remain?
“The forecasters are not upbeat about the outlook for the job market next year. Though the latest employment data point to the end of a nasty cycle of job cuts, next year’s recovery is not expected to make much of a dent in the unemployment rate, which is hovering around 10 percent. The consensus is that the jobless rate drops by just two-tenths of a percent, to 9.8 percent, by the end of next year.”
That forecast is in line with other general predictions I’ve seen. And each point in the unemployment rate represents about 1.5 million jobless persons. So why not have a jobs program to relieve this stubborn problem? (First, to be fair, let’s note that two of the eleven members of the panel do support another round of stimulus. They are Jan Hatzius, chief economist of Goldman Sachs, and Ethan Harris, head of North American economics for Bank of America Merrill Lynch. When Goldman Sachs and Bank of America are the good guys, maybe there’s something wrong with my profession?)
Edward Leamer of UCLA, whom I have heretofore associated with common-sense empiricism and clear writing, channels his inner Scrooge and mixes his metaphors in offering this beatings-will-continue-until-morale-improves prescription:
‘“The time to short-circuit the negative feedback from job losses is behind us,” said Ed Leamer[,] director of the UCLA Anderson Forecast. “Let the private sector heal the economy.”’
To paraphrase Homer Simpson and Proverbs 21:13: “It’s not that we’re not listening to the cries of the unemployed, honey, it’s just that we don’t care.”