ECONOMIC DOLDRUMS….A few days ago Paul Krugman wrote a column in which he suggested that there was “something funny” about recent unemployment data:
An unusually large number of people have given up looking for work, so they are no longer counted as unemployed, and many of those who say they have jobs seem to be only marginally employed. Such measures as the length of time it takes laid-off workers to get new jobs continue to indicate the worst job market in 20 years.
A shouting match ensued between Brad DeLong and Dan Drezner over whether Krugman was really interpreting the statistics correctly, but regardless of the specific placement of Krugman’s qualifiers, yesterday’s job news seems to be on Krugman’s side:
The unemployment rate did dip two-tenths of a point to a 14-month low of 5.7%, but that was because more than 300,000 people dropped out of the labor force ? a sign not of economic strength but of an exodus of discouraged job seekers.
There is something funny about the economy these days, because despite big GDP growth numbers and falling unemployment we’re not seeing rising employment, rising incomes, or rises in factory orders. What’s more, even the IMF is worried about our budget deficits, the dollar is sliding, and George Bush wants to distract everyone by sending us to Mars.
This isn’t the Great Depression, but it’s not exactly good times either. There really is something disturbing about this economic “recovery,” and it’s not something that can be solved with yet another round of tax cuts predicated on wildly phony projections of job growth. Unfortunately, that seems to be the only tool George Bush is willing to consider using.
We really need to get rid of this guy.