NP - Structural w/ Austerity or Demand-Lack w/ Stimulus?

[Paul Mackin]

On 5/11/2012 11:25 PM, David Morris wrote:
> Both sides of the fence, Alice?
> Sorry, Krug doesn't agree w/ you. He says so explicitly, so your hedging
> will not prosper in his book.
> But you fit his structuralist bill perfectly when you say "What can be
> done about this? Not much."
> That's the Structuralist's plan: Nothing.

The key  question is, how much is not much.

A drop in the rate of even one percent adds up to about a million and a 
half people.

Unemployment above the normal rate (5-6 percent as Alice says) is 
destructive of society.

Save as many souls as possible is my motto.

P


>
> On Friday, May 11, 2012, alice wellintown wrote:
>
>     Krug suspects, as do most people who study this problem, that we may
>     be looking at higher unemployment in the USA, that is, higher than its
>     "longer-run normal value"  (5%-6%),  for several years.
>
>     Is the unemployment structurual? Hard to say for sure, but there is
>     reason to agree with Krug on this. And, the Fed agrees that structural
>     unemployment, while quite difficult to measure, is not what we have so
>     much as cyclical unemployment, slack demand.
>
>     What can be done about this? Not much. The Fed is doing its job. The
>     fiscal headwinds need to be dealt with next. Unemployment, sad to say,
>     will not return to normal for some time if all goes as forcast.
>
>     on JPM Chase, I agree with ROBERT B. REICH: Break up the big banks and
>     put some kind of GS back in place.
>