Wow, even The Economist, by no means a liberal rag, is agreeing with the Krugmans and Stiglitzes on what ails the major economies:
"The left is right on one thing: the main cause of the current high joblessness is the severity of the last recession and the weakness of the subsequent recovery. Yet the West's economies have embarked on contractionary policies. [...] the main culprit is a collective, premature shift to fiscal austerity by governments." [Emphasis mine.]
I don't agree with The Economist's hint, however, that something structural has changed in the employment picture. If that were true then we'd be seeing some industries with very strong hiring, others very weak. As it stands, hiring is down across the board -- which means the real culprit is a lack of aggregate demand. They trot out high male unemployment (the "man-cession") as an example of a structural change ... but that can easily be explained by the facts that men are overrepresented in construction and transportation, two of the hardest hit sectors. But now it seems those jobs are coming back, and men are getting hired faster than women.
It is not impossible for politicians to reduce the West's frighteningly high unemployment levels
September 10, 2011 | The Economist
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