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Douthat Redefines Pessimism Upwards

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Monday, 05 July 2010 07:56

The NYT's Ross Douthat gave pessimism a new meaning when he noted the economy's poor jobs performance in June and commented that:

"It’s now been 30 months since the beginning of the recession, and it looks as if it could take another 30 or so to regain the level of employment we enjoyed in the autumn of 2007." Actually, we are down about 7.7 million jobs right now from the pre-recession peak. Making this up in 30 months would require creating jobs at a rate of more than 250,000 a month. This is a faster pace than we have seen in any month of the recovery thus far (excluding Census jobs). There are few forecasters who are this optimistic about the economy's performance over the next two and a half years.

It is also worth noting that his claim that the economy was harmed by pessimism surrounding the stagflation of the late 70s is somewhat dubious. Investment, the component of output most sensitive to attitudes, was at a record share of GDP at that time. The investment share of GDP in the late 70s still has not been exceeded. 

Comments (12)Add Comment
...
written by Mark G., July 05, 2010 9:53
" Actually, we are down about 7.7 million jobs right now from the pre-recession peak. Making this up in 30 months would require creating jobs at a rate of more than 250,000 a month."

125,000 new jobs per momth needed to absorb population/demographics growth. We're looking at 375,000 to 400,000 new jobs each and every month to make up the loss in 30 months.
...
written by izzatzo, July 05, 2010 11:09
Malthus Oh Malthus
It's Different This Time

Too Many People
Too Much Crime

Not Enough Resources
Not Enough Time

Invisible Hands Everywhere
Except For Mine

Lend Those Hands
To Unemployed Masses

Not With Welfare
But Keynesian Passes

Douthat Was Wrong
Pelosi Was Right

Spending Is Stimulative
Regardless Of Source

Except By Teabaggers
Who Spend With Remorse
...
written by Min, July 05, 2010 12:41
At the start of the administration, people were looking for "shovel-ready" projects to get people to work quickly. Wha' hoppen?

At this point in time, unemployment is more urgent. The time has come not to worry about the shovels. Put people to work. If there is not enough work right now, pay them for showing up.
...
written by diesel, July 05, 2010 1:00
You guys still just don't get it. As Douthat says, "While our rivals...face a slow demographic decline, our population is steadily increasing." There's a pleasant thought, we'll f**k our way to prosperity.
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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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