The introduction to the Atlantic article "How a New Jobless Era Will Transform America" is from a private correspondence with my friend Tom. – Ilene
Tom: From a sociological point of view, I think the following article is insightful. Don Peck talks about the impact of unemployment on people, communities, and cultures. His forecasts are based on an assumption that the US economy will take a long time to correct our current joblessness — and on sociological findings that many people who begin their work lives in a period such as this are permanently scarred.
Unfortunately, this author has bought the mainstream economic establishment’s view hook, line, and sinker. At the end of this article he urges the continuation of present policies, with even greater vigor — the one way to make our future even bleaker than his article suggests. This is the author’s prescription even though he quotes Paul Krugman as saying he [Krugman] has “no idea” how the economy could quickly return to strong, sustainable growth.
Peck’s so-called Millennial generation is particularly illuminating: he answered many of my questions about my nieces, who are in that group. It was apparently not just my sister who wrecked her kids with non-stop attempts to boost to their self-esteem. There was a wide spread belief in this parenting style — and it has resulted in catastrophe for many of these young people. The bottom line: these youngsters don’t like work, but they have unusually high material expectations. (My 28 year old niece still hasn’t worked a day in her life, and won’t even help out at home. She lives with her parents, who are also housing and supporting her husband and child! Meanwhile, my niece attends law school, but everyone agrees she is very unlikely to ever find a job as a lawyer.)
It’s a darn shame. All of this misery caused directly by Alan Greenspan and the Federal Reserve, along with all the other government interventions that made the bubble so long lasting and disastrous. And now Ben Bernanke is seeking to keep the economy from ever correcting these distortions. Meanwhile we have the ongoing massive transfer of wealth from people all across the economy right into the pockets of bankers and financiers — as well as into the pockets of federal bureaucrats.
But our mainstream economists continue to celebrate rising economic aggregates wherever they can be found as if those numbers were indicative of a healthy economy.
Ilene: Tom, I might add to your final sentence an article by Pragcap, "STAT OF THE DAY: 93% OF ANALYSTS EXPECT S&P TO RALLY HIGHER." Quite unbelievable, the financial markets and the economy seem completely detached, and the majority of analysts believe this will continue.
How a New Jobless Era Will Transform America
THE GREAT RECESSION MAY BE OVER, BUT THIS ERA OF HIGH JOBLESSNESS IS PROBABLY JUST BEGINNING. BEFORE IT ENDS, IT WILL LIKELY CHANGE THE LIFE COURSE AND CHARACTER OF A GENERATION OF YOUNG ADULTS. IT WILL LEAVE AN INDELIBLE IMPRINT ON MANY BLUE-COLLAR MEN. IT COULD CRIPPLE MARRIAGE AS AN INSTITUTION IN MANY COMMUNITIES. IT MAY ALREADY BE PLUNGING MANY INNER CITIES INTO A DESPAIR NOT SEEN FOR DECADES. ULTIMATELY, IT IS LIKELY TO WARP OUR POLITICS, OUR CULTURE, AND THE CHARACTER OF OUR SOCIETY FOR YEARS TO COME.
By Don Peck
HOW SHOULD WE characterize the economic period we have now entered? After nearly two brutal years, the Great Recession appears to be over, at least technically. Yet a return to normalcy seems far off. By some measures, each recession since the 1980s has retreated more slowly than the one before it. In one sense, we never fully recovered from the last one, in 2001: the share of the civilian population with a job never returned to its previous peak before this downturn began, and incomes were stagnant throughout the decade. Still, the weakness that lingered through much of the 2000s shouldn’t be confused with the trauma of the past two years, a trauma that will remain heavy for quite some time.
The unemployment rate hit 10 percent in October, and there are good reasons to believe that by 2011, 2012, even 2014, it will have declined only a little. Late last year, the average duration of unemployment surpassed six months, the first time that has happened since 1948, when the Bureau of Labor Statistics began tracking that number. As of this writing, for every open job in the U.S., six people are actively looking for work.
All of these figures understate the magnitude of the jobs crisis. The broadest measure of unemployment and underemployment (which includes people who want to work but have stopped actively searching for a job, along with those who want full-time jobs but can find only part-time work) reached 17.4 percent in October, which appears to be the highest figure since the 1930s. And for large swaths of society—young adults, men, minorities—that figure was much higher (among teenagers, for instance, even the narrowest measure of unemployment stood at roughly 27 percent). One recent survey showed that 44 percent of families had experienced a job loss, a reduction in hours, or a pay cut in the past year.
