Thursday, June 16, 2011

More on unemployment

Both All Things Considered (NPR) and Nightly Business Report (PBS) on Tuesday were selling this idea of structural unemployment, with the Business Report suggesting that we should get used to a "new normal" of seven percent unemployment. So the campaign continues.

I think there are two sources of this push to normalize excessive unemployment rates:

1) The business community likes the idea of government taking over more of the funding of worker training programs. It saves them money, straightforwardly. It also means they don't have to worry as much about turnover. They don't have to put in place expensive programs to promote worker retention and loyalty. (By the way, David Leonhardt's column in today's Times suggests that business opposed a payroll tax holiday because they want to get the money without having to hire more people.)

2) Politicians of both parties have reached the conclusion that there is no popular support for additional fiscal stimulus, so they are making the best of a bad situation. Convincing people that nothing can be done about unemployment removes any responsibility they might bear for not doing everything they can, particularly the thing that might be effective.

This is the opposite of leadership, of course. Rather, it is rank opportunism. A few lonely voices in the media are making the case, notably Paul Krugman, but it's a long wait for the politicians or business leaders to take it up. The language itself has been poisoned by all the talk of "failed stimulus," as if that had anything to do with the truth.

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