The Long ”Recession” Deepens:American job creation at a standstill

The alarm bells should be ringing at the White House and in the halls of Congress at the latest economic numbers in the painful prolonged battle to restore prosperity to America. We are now a full two years since the economic growth numbers turned positive and the apparent first leg of the great slump bottomed out in the summer of 2009. For the fourth consecutive month job creation has been very disappointing and so small as to have no positive effect on lowering the very high unemployment rate. This past month partly because of continued layoffs in the public sector at both the federal and state and local level and because of an on-going labour dispute in the private sector there were exactly zero  net additions to the labour force. Well over 250,000 net new hires are needed each month to bring down the unemployment rate but the economy with respect to new hiring is moving in exactly the opposite direction. The time for action is now.

President Obama is apparently about to propose a package of tax and spending measures which need to focus on direct job creation and reinvestment in infrastructure,the environment, storm reconstruction, aid to states and local authorities, education and income support for the unemployed, perhaps additional mortgage relief as well as special tax incentives for business to hire new employees. These ought to be substantial programs in the many 100s of billions of dollars. The Republicans and Democrats should put aside their partisan objections for another day and recognize the urgency of the situation. The lower the unemployment rate the smaller will be the deficit in the medium term and the easier it will be to address structural imbalances in the long term.

it is also time for the private sector to step up to the plate and unlock their amply filled treasuries and start hiring.  When they were in danger because of the crash the American government and taxpayer came to their rescue. It is time to repay the debt.

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About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, business cycles, deficits and debt, fiscal policy, J.M.Keynes, U.S., unemployment. Bookmark the permalink.

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