The American economy has been shedding jobs much, much faster than Okun's law predicts. According to that rough rule, we should be at about 8.5% unemployment today, not slipping toward 10%. Something new and possibly strange seems to be happening in this recession. Something unpredicted by the experts. "I don't think," Summers told the Peterson Institute crowd — deviating again from his text — "that anyone fully understands this phenomenon."Except I think Mr. W. predicted this strange phenomenon pretty well. It's called "Stimulus." If the average American job pays $40,000/ year and we take $1 trillion out of the public sector, that's a loss of some 25 million jobs we're causing right there. (Right? Someone still good at Math work that out for me.)
Plus there's the whole green jobs thing, also noted here previously, by which every job we "create" costs 2.2 traditional jobs.
if the result is that we're stuck with persistent 9%-to-11% unemployment for a while — a range whose mathematical congruence with that other 9/11 is impossible to miss — we may be looking at a problem that will define the first term of Barack Obama's presidency the way the original 9/11 defined George W. Bush's. Like that 9/11, this one demands a careful refiguring of some of the most basic tenets of national policy.
Time thinks we're headed for Obamavilles --not quite as bad as Hoovervilles.
We're a long way from Hoovervilles, of course. But it's not hard to imagine, if we're not careful, a country sprouting listless Obamavilles: idled workers minivanning aimlessly through overleveraged cul-de-sacs with no way to pay their mortgages, no health care, little hope of meaningful work and only the hot comfort of angry politics.They say it regretfully, as a thing to be avoided. I say it's the express goal of the Obama/Alinsky Administration.
