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Tuesday, January 25, 2011

Turbulence Ahead

By the numbers, the great recession's long gone. The World Bank forecasts that developing countries -- chugging along at an average growth rate of 6 percent -- will expand the global economy by more than 3 percent this year. In the last six months, London's FTSE 100 is up more than 15 percent, and Wall Street's Dow Jones index is up nearly as much. It's just about enough to say the good times are back.

All this good news, however, provides little comfort to workers in the U.S. and Europe. Because even in the rosiest scenarios, job prospects there will continue to be few and far between. And more broadly, on jobs, austerity, and currencies, both sides of the Atlantic may spend the year caught in an ill-informed policymaking spiral that means, though it's frustrating to say it, more malaise.

No recovery can be called real without bringing down unemployment. As in the euro zone, the haunting number in the U.S. hovers around 10 percent. (In Spain, it's twice that.) And there is a wide consensus among economists that something like the pre-crisis unemployment level of 5 percent remains years away, at least.

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