Thursday, August 7, 2003
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Good economic news
Of course, this news came out the same day as this Bob Herbert op-ed predicting economic catastrophe.posted by Dan on 08.07.03 at 12:38 PM
I despise Herbert's "henny penny" apocalyptic interpretation of economics, but he is right that this has been a jobless recovery so far. I am optimistic that employment figures will be improving shortly, but that hasn't happened yet. Perhaps that's because employment gains always lag GDP growth. Last week's figures weren't not that positive concerning employment figures. Maybe the rate of jobless claims was cut in half, but overall unemployment probably did increase. It technically fell .2 percent, but only because half a million people gave up on looking for work. Furthermore, a increase in productivity may be beneficial for long term economic growth - making goods and services cheaper for everyone and making our labor market more competitive - but it probably hurts in the short term. What is that Keynes quote: "In the long run we are all dead." Jobs really aren't created if productivity gains match GDP growth. If productivity continues to increase at such a high rate, that may be good for the overall economy, but bad for the job market.
I am glad that Herbert and others are being so negative about the economy and the weapons hunt in Iraq. When jobs are created, and more evidence about the weapons program is released, much of the NYTimes op-ed page will be exposed for the frauds that we all know them to be. It may be a little too early for that yet.posted by: Matt Stern on 08.07.03 at 12:38 PM [permalink]
I know you are not an economist but you should know that Herbert's point is not contradicted by the data you show. In fact, Brad DeLong might say it is explained by it.
Didn't Paul Krugman teach you anything as outside chair?
:)posted by: GT` on 08.07.03 at 12:38 PM [permalink]
Yes, employment should be on the upswing. But it isn't.
Maybe I missed it but I did not read Herbert's piece as saying that the job problem was forever. I read it as saying it's a problem TODAY (which I think it is) and that the Bush administration does not seem to be doing much (which I think they aren't).
Let me be clear that I mostly disagree with Herbert's articles. In fact, I hardly ever read them.
Congrats on the new website, BTW.posted by: GT on 08.07.03 at 12:38 PM [permalink]
Perhaps I was a little misunderstood. Posting comments at work is not conducive to writing with both clarity and nuance. I was trying to say that it may be premature to call this good economic news. Krugman and Herbert are currently correct that this has been a jobless recovery. However, I do think that the job market is on the cusp of making a recovery, and when this happens, they'll have to eat their words.
By the way, I do like your new site a lot more than the old one.posted by: Matt Stern on 08.07.03 at 12:38 PM [permalink]
Employment figures "far from rosy"? I can only speak from personal experience. Ex-IT supervisor, previously making 51k a year. Just took an $8 an hour call center job, after being out of work for 13 months. Every job I interviewed for had over 200 applicants for the job. The call center is full of folks who'd run out of benefits and were desperate enough to take anything.
I am hopeful that things will pick up by the 2004 election, but do not see good news anytime soon. In the meantime, I hope like hell I get a ton of overtime, because there is no way I can pay my mortgage and bills on $8 an hour.
The picture looks a lot rosier if you still happen to have one of those high paying jobs.posted by: Teri Pittman on 08.07.03 at 12:38 PM [permalink]
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