The Wrong Worries- Another Excellent Article by Krugman

Paul Krugman's consistent claims that it is necessary for US economic policy to focus on employment creation has been admirable, in light of the continuously high unemployment rates at the national level and, even more so, in states with high Latino and Mexican-origin populations.

His most recent op-ed in the NY Times calls attention once again to this issue, now framed within the context of the drastic declines in the stock markets in the US and other countries.

As he indicates in the excerpt below, the ratio of employment to population has remained virtually the same during the last two years, resulting in a lastin human catastrophe.

"Yes, officially the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin. But at no point has growth looked remotely adequate given the depth of the initial plunge. In particular, when employment falls as much as it did from 2007 to 2009, you need a lot of job growth to make up the lost ground. And that just hasn’t happened.

Consider one crucial measure, the ratio of employment to population. In June 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number was down to 59.4. As of June 2011, two years into the alleged recovery, the number was: 58.2.

These may sound like dry statistics, but they reflect a truly terrible reality. Not only are vast numbers of Americans unemployed or underemployed, for the first time since the Great Depression many American workers are facing the prospect of very-long-term — maybe permanent — unemployment. Among other things, the rise in long-term unemployment will reduce future government revenues, so we’re not even acting sensibly in purely fiscal terms. But, more important, it’s a human catastrophe."

The complete article:

The Wrong Worries - NYTimes.com: