Taughannock Falls

Taughannock Falls
from: althouse.blogspot.com

Friday, August 27, 2010


Paul Krugman wants policy makers to face reality:

The small sliver of truth in claims of continuing recovery is the fact that G.D.P. is still rising: we’re not in a classic recession, in which everything goes down. But so what?

The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.

All of this is obvious. Yet policy makers are in denial.

Not only is Krugman right, the consequences of this denial may be catastrophic politically for the Democrats. Working people and the white collar unemployed have lost patience with the happy-talk from the Obama administration. Talking about being disappointed with the slow pace of the recovery won't cut it. Only by laying out a bold plan for putting millions back to work can the President regain the confidence of American voters. It may be time to propose a huge W.P.A. style jobs program.

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