Despair of the Jobless

The folks who put the voodoo back in economics keep telling us that prosperity is just around the corner. For the unemployed, that would mean more jobs. Are there more jobs just around the corner?

This alleged economic upturn is not just a jobless recovery, it's a job loss recovery. The hemorrhaging of jobs in the aftermath of the recent "mild" recession is like nothing the U.S. has seen in more than half a century. Millions continue to look desperately for work, and millions more have given up in despair.

The stories have been rolling in for some time about the stresses and misfortunes that are inevitably associated with long-term joblessness: the bankruptcies, foreclosures and evictions, the dreams deferred, the mental difficulties — anxiety, depression — the excessive drinking and abuse of drugs, the family violence. There are few things more miserable than to need a job and be unable to find one.
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Working Americans need jobs just to survive. But the Bush administration equates the national interest with corporate interests, and in that equation workers can only lose.

There are ways to spark the creation of good jobs on a large scale in the U.S. (I will explore some of them in a future column.) But that would require vision, a long-term financial investment and, most important, a commitment at the federal level to the idea that it is truly in the nation's interest to keep as many Americans as possible gainfully employed.
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"A FORM OF LOOTING"

Akerlof: There is a systematic reason. The government is not really telling the truth to the American people. Past administrations from the time of Alexander Hamilton have on the average run responsible budgetary policies. What we have here is a form of looting.

SPIEGEL ONLINE: If so, why's the President still popular?

Akerlof: For some reason the American people does not yet recognize the dire consequences of our government budgets. It's my hope that voters are going to see how irresponsible this policy is and are going to respond in 2004 and we're going to see a reversal.

SPIEGEL ONLINE: What if that doesn't happen?

Akerlof: Future generations and even people in ten years are going to face massive public deficits and huge government debt. Then we have a choice. We can be like a very poor country with problems of threatening bankruptcy. Or we're going to have to cut back seriously on Medicare and Social Security. So the money that is going overwhelmingly to the wealthy is going to be paid by cutting services for the elderly. And people depend on those. It's only among the richest 40 percent that you begin to get households who have sizeable fractions of their own retirement income.
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  thanks to wood s lot

And this is why, ultimately, history is against the current economic regime and the Republican Party that hopes to enact it. In the end money is based on promises, and the Republican government in power now is making promises that the next generation will not feel particularly obliged to keep, because the cost of general economic collapse is far higher now, and events will not be allowed to get anywhere near the level of tension that had Frenchmen happily marching off to war in a naive spring of 1913. By far the most likely scenario is the ending of the supply of credit, coupled with increasing tension in the "middle sphere" of countries that have developed industrialized bases, but not sufficient liquidity - Argentina, Taiwan, Korea, Brazil, Venezuela, Indonesia all have capital assets in their urban cores which are at world standards, but not enough of an internal market to sustain the growth of those assets.

And it is thinking ahead which is what people in the internet blog space should be doing. We have limited impact on immediate events, though more and more every day, instead it is the long term where the intellectual power of the internet space is most important - taking arcane predictions from economics papers, and explaining in clear detail what projects mean.
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