One of the more notable characteristics of Paul Krugman's work as an economist is the moral view he brings to the numbers. Morally, the deciders of the Federal Reserve have been "the good guys." They saw unemployment as a key problem in our recovery from the fiscal crisis and they have persisted during the long period of recession brought on by the failings of the financial system and sustained over the past five years by budget "hawks."
Fed officials are, as I said, the good guys. Sometimes it seems as if nobody in Washington outside the Fed even considers high unemployment a problem.
Why isn’t reducing unemployment a major policy priority? One answer may be that inertia is a powerful force, and it’s hard to get policy changes absent the threat of disaster. As long as we’re adding jobs, not losing them, and unemployment is basically stable or falling, not rising, policy makers don’t feel any urgent need to act.
Another answer is that the unemployed don’t have much of a political voice. Profits are sky-high, stocks are up, so things are O.K. for the people who matter, right? ...Krugman, NYT
Trouble is, as long as our top 10% are doing okay we're happy. That "means" everything is going okay. Our system is changing, updating. Higher unemployent is natural, acceptable.
But we also know that's morally very questionable at best. It's not the time for the Fed, or anyone else, to stop worrying about the meagre improvement in employment.
Yes, you hear talk about a “new normal” of much higher unemployment, but all the reasons given for this alleged new normal, such as the supposed mismatch between workers’ skills and the demands of the modern economy, fall apart when subjected to careful scrutiny. If Washington would reverse its destructive budget cuts, if the Fed would show the “Rooseveltian resolve” that Ben Bernanke demanded of Japanese officials back when he was an independent economist, we would quickly discover that there’s nothing normal or necessary about mass long-term unemployment.
So here’s my message to policy makers: Where we are is not O.K. Stop shrugging, and do your jobs. ....Krugman, NYT
