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Friday, January 13, 2012

What Recovery?

If we add 200,000 jobs a month, will recovery take 7 years or 12 years? ... On Friday, we got the December jobs number: +200,000. That's good, but not good enough. I posted a graph from the Hamilton Project showing that, at that rate, the labor market wouldn't recover till 2024. But perhaps that's too pessimistic. The Economic Policy Institute took a look at the same numbers and concluded that a growth rate of 200,000 jobs per month would lead to a full recovery in seven years or so. That's nothing to celebrate, but it's better than the Hamilton Project's estimate of 12 years. It's also a bit odd: Isn't this a simple matter of taking job losses and dividing by monthly job gains? Well, no. The date of our eventual recovery depends on some crucial unknowables about the future of the American labor force. – WonkBlog Washington Post

Dominant Social Theme: This was a bad recession but it'll be all right soon.

Free-Market Analysis: We have learned that the US recession is over and that the only reason Europe is in trouble is because Southern European countries like Greece won't rein in their spendthrift ways. But as an alternative news site, we have never subscribed to the idea that what has occurred in the early 2000s is a merely a normal business cycle event.

In fact, we are on record numerous times as explaining that what has occurred in the 2000s is the END of the dollar-reserve economic system. If the cycle itself is left to run its course, gold looks (possibly) to finish above US$3,000 or US$4,000 (maybe US$5,000) and Western-style paper-money economies cannot stand that sort of strain, in our view.


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