Jobs: ‘Nothing We Can Do’? Not So, Says Krugman

Paul Krugman laments the fact that the leaders of most Western industrialized nations seem to have taken chronic and rising unemployment as an established economic condition about which nothing could or should be done. He describes the situation as a kind of “learned helplessness” on the part of those leaders.

But, he says, there is no real reason unemployment could not be reduced: our workers are willing and skilled, and a mere four years ago, unemployment ran only around 5 percent. So… what has changed?

The core of our economic problem is, instead, the debt — mainly mortgage debt — that households ran up during the bubble years of the last decade. Now that the bubble has burst, that debt is acting as a persistent drag on the economy, preventing any real recovery in employment. And once you realize that the overhang of private debt is the problem, you realize that there are a number of things that could be done about it.

… (Krugman lists examples of approaches here.)

So there are policies we could be pursuing to bring unemployment down. These policies would be unorthodox — but so are the economic problems we face. And those who warn about the risks of action must explain why these risks should worry us more than the certainty of continued mass suffering if we do nothing.

As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle.

“Learned helplessness…” a disingenuous thing to learn, in my opinion, another way of ignoring the problem instead of addressing it. Meanwhile, one member of this household is unemployed (effectively retired involuntarily), and the other is working 50 percent, despite her best efforts and impeccable credentials in her field. Thanks loads, President Obama. [/snark]

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