Job losses continue

The Guardian reports that the US lost another 131,000 jobs in July.  Much of it can be attributed to the Census winding down, and laying-off employees, but June estimates have been revised to 221,000 from 125,000.  Paul Krugman suggests that politicians may be busy redefining what it means to have a good economy.  Dr. Krugman has been deeply critical of current economic policies around the world in his blog and his column.  Of particular concern is the move by many countries to “tighten their belts” and cut spending.  It’s truly astonishing that so many people around the world have forgotten the Great Depression and written Keynesian economics off.  Increasing government spending is the only feasible method of stimulating the economy at this point.  The Fed is already up against the zero bound, so there’s not much that can be done by way of monetary policy to help the economy.  We desperately need big spending on public works.  Hell, it’s obvious that the US has crumbling infrastructure in need of major overhaul.  Why not fix our stuff and stimulate the economy at the same time?

There are other economic issues here, such as the out-sourcing of US manufacturing, limiting the effects of economic stimulus, but that’s another issue to be tackled after we stabilize the economy.

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4 responses to this post.

  1. Posted by cicely on August 7, 2010 at 5:38 AM

    I have a cynical suspicion that the wealthy end of the Republican party doesn’t want the economy to stabilise under a Democrat administration; that they are willing to wait it out, and maybe buy up some properties on the cheap. This way, they can hope to flush the Dems out of the system, and claim the credit for an economic recovery that they went to some lengths to undermine.

    Or maybe it’s late, and I’m sad.

  2. I wouldn’t put it pass them, cicely.

  3. I don’t think the Republicans care about stabilizing the economy, ever. They’ve been promoting policies that are known to cause economic instability for thirty years now. As long as society stays stable enough that their money continues to buy stuff, they’re going to support deregulation and decreasing government spending on everything except the military.

    Before the Great Depression, things were bad (but not necessarily starving bad) for the working class and the middle class was a small fraction of the population. It wasn’t until huge swaths of the population began to suffer severe hardship up to and including starvation that we elected someone willing to do something about it. Roosevelt didn’t have a choice in 1933. People were rioting in the streets of the cities because they had no food, no shelter, and no chance for that to change. The country was truly on the verge of anarchy. Obviously, a huge government spending program, WWII, ended the Great Depression, and in the 50s, 60s and 70s American manufacturing along with the GI Bill enabled the middle class to grow. I think we’re seeing a shift back to a pre-1030s style equilibrium with a small middle class and impoverished working class. That’s just me, though, and I’m a known cynic.

  4. hii.. What’s Up???? Do you have updates..???

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