A Lost Decade of Economic Growth

Here is a bit from a post by Paul Krugman on his NY Times blog.

Clive Crook argues that we’re flirting with the possibility of a lost decade. I disagree — the flirting took place three years ago. The lost decade question now isn’t whether our flirtation with a lost decade will turn into something serious; it’s whether the torrid affair we’re now having with the potential for a lost decade can somehow be broken up.

Step back from the short-term news flow, and look at my favorite indicator these days, the employment-population ratio:

Click to Enlarge
What you see isn’t a recovering economy that may be stumbling; you see an economy that has stopped its free fall, but hasn’t really been recovering at all.

I’d say that the burden of proof right now is on those who claim that we aren’t on track for a lost decade.

It is tragic that Obama has decided to surround himself by the authors of the financial crisis: Larry Summer, Ben Bernanke, Tim Geithner. He had a chance on taking office of making a clean break with the past and working hard to get Americans back to work. Instead, he chose to please the Wall Street types with lots of money to the bankers and nothing for the unemployed or those who lost their homes. You don't cure a Great Recession by "trickle down" economics. Obama is a smart man, he should know this. But he gets paid big bucks by Wall Street, so he stuidiously ignores the facts and pretends that he has been working "for" Americans while he in fact is working for the banks.