The job market is pretty vacant. And we don’t care!

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.”

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2 Responses to “The job market is pretty vacant. And we don’t care!”

  1. Mark E. Says:

    I can see the reason for pessimism with the stimulus plan. Nothing seems to have worked particularly well toward economic recovery. However, I think the reason may be in the broad strokes that have been applied. Too much has been relied on pumping money to the banks to allow the market to recover on its own.

    I believe we are experiencing a bit more than a simple recessionary ebb in the economic cycle. Rather, we may be experiencing a major shift in economic reality. As such, simple, easy, popular ideas may not be adequate to address our current situation, even ideas that may have worked wonderfully in the past.

    It may be time to stop short term thinking in terms of bringing unemployment back to what we consider normal levels and start thinking more expansively to meet the end result of this shift in the long term. Another looming problem of today could even be addressed simultaneously in this effort.

    The misuse, or at least the overuse, of our natural resources is becoming more and more entangled directly with traditional monetary economics. The idea of externalities in economics should no longer be considered just a theory or even a minor player. Global warming as a result of the burning of fossil fuels is just the most well known example, but there are many others brewing.

    I’d like to see more green jobs as they would address both these issues. Targeting federal spending is this area would not only create jobs, but if significant enough, it would also create a competitive market for such goods. Obama has mentioned fixing our rail system, and I think that is a great example of what should be done to help green our economy.

    I don’t believe my suggestions would be a viable short term fix. However, since there might not be any such fix, it just might be time to choose a path that meets our future needs. As it has been said many times about global warming; it we wait for it to happen, it will be too late.

  2. democommie Says:

    Ranjit:

    They are not “stubbornly unemployed” so why would they care about anyone who is?

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