What Recovery?

The US economy, many believe, is turning a corner.  Maybe so, but for much of the country, what lies around the corner is a dead end.  In far too many places, high levels of unemployment still exist, and joblessness has been the norm for years, even decades. Unless we try something different, these places will once again be left behind as more prosperous areas recover.

via What Recovery? Across America, People in Distressed Cities and Small Towns Face Economic Catastrophe | Alternet.

Why We’re Falling Into a Double-Dip Recession

Robert Reich (Why We’re Falling Into a Double-Dip Recession) provides a cogent analysis of the current employment situation. He is not calling a Double Dip recession quite yet, but I will be very surprised if we don’t experience one in the United States—and for all of the reasons he states. Moreover, according to This Time It’s Different (PDF), a typical recession results in an unemployment rate 7-ish points above per-recession averages. That should mean a rate of over 12 percent for a duration of 3 years. Of course, the trigger to this recession suggests that this is bigger than an average recession, so I’d expect the it to last longer (or double-dip) and the unemployment rate to increase.

As Reich points out, the primary reason it isn’t as bad as it could be is due to good old-fashion fiscal policy. He does a good job of pointing out the distinction between a Keynesian variety short-term stimulus from the long-term debt accrued by the supply-siders of the past 30-odd years. If we don’t get a handle on this, we may end up experiencing a lost decade much like Japan in the 1990s.