The NYT Nobel-prize-winning columnist isn’t happy with the government right now. He believes Obama needs to do more to foster job creation. He praises the stimulus plan but says it’s too little of a good thing.
Suppose that the economy were to keep growing at 3.5 percent. If that happened, unemployment would eventually start falling — but very, very slowly. The experience of the Clinton era, when the economy grew at an average rate of 3.7 percent for eight years (did you know that?) suggests that at current growth rates we’d be lucky to see the unemployment rate fall by half a percentage point per year, meaning that it would take a decade to return to something like full employment.
But wait, it gets worse. Turns out recent grads caught in bad timing will suffer permanent consequences in their careers.
But anyone who really cared about the prospects of young Americans would be pushing for much more job creation, since the burden of high unemployment falls disproportionately on young workers — and those who enter the work force in years of high unemployment suffer permanent career damage, never catching up with those who graduated in better times.
That sound you hear is the crackling of my diploma burning.