Thursday, May 13, 2010

Unemployment at 10.2% and nobody in DC seems riled

This Brad DeLong quote has been getting a lot of play on the blogs today, and rightfully so:
The most astonishing and surprising thing I find about Washington DC today is the contrast in mood between DC today and what DC was thinking a generation ago, in 1983, the last time the unemployment rate was kissing 10%. Back then it was a genuine national emergency that unemployment was so high--real policies like massive monetary ease and the eruption of the Reagan deficits were put in place to reduce unemployment quickly, and everybody whose policies wouldn't have much of an effect on jobs was nevertheless claiming that their projects were the magic unemployment-reducing bullet.

Today.... nobody much in DC seems to care. A decade of widening wealth inequality that has created a chattering class of reporters, pundits, and lobbyists who have no connection with mainstream America? The collapse of the union movement and thus of the political voice of America's sellers of labor power? I don't know what the cause is. But it does astonish me.
One reason might be that the Fed as already lowered interest rates to essentially zero and the government is already running a large deficit. But obviously these measures are not working, at least not in the near term. Is 10% unemployment the new normal? Does anyone in power think this is a crisis? Or are they all so intimidated by deficit scolds that they're afraid to do anything about the problem? Seems people are still willing to lend money to Uncle Sam at 3.56% as of May 12th, 2010. Maybe they should put the country back to work. It's not like there isn't stuff for people to do: infrastructure, schools, research, green energy (or if you're a conservative, border security, crime prevention, re-tooling the military). I think there are plenty of places the US Government could get more than a 4% return on its money.

Obviously, I have a personal stake in this: I'm seeking a job, and I'd be fine if inflation went up a bit in order to bring unemployment down to reasonable levels.


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