The American economy could experience painfully slow growth and stubbornly high unemployment for a decade or longer as a result of the 2007 collapse of the housing market and the economic turmoil that followed, according to an authority on the history of financial crises.
That finding, contained in a new paper by Carmen M. Reinhart, an economist at the University of Maryland, generated considerable debate during an annual policy symposium here, organized by the Federal Reserve Bank of Kansas City, which concluded on Saturday.
The gathering, at a historic lodge in Grand Teton National Park, brought together about 110 central bankers and economists, including most of the Federal Reserve’s top officials. In 2008, the symposium occurred weeks before the Lehman Brothers bankruptcy nearly shut down the financial markets. At the symposium last year, officials congratulated themselves on weathering the worst of the crisis.
But the recent slowing of the recovery cast a pall on this year’s gathering. As economists (some wearing jeans and cowboy boots) conferred on a terrace with a sweeping view of the 13,770-foot peak of Mount Teton, or watched a horse trainer tame an unruly colt at a nearby ranch, they anxiously discussed research like Ms. Reinhart’s. (Participants pay to attend the event, which is not financed by taxpayers, a Kansas City Fed spokeswoman emphasized.)
3 thoughts on “High unemployment could last a decade”
Some of you called me a pessimist (and worse) when I said we wouldn’t see any recovery until at least 2015. This study is saying 2016 or longer. Of course that keeps extending out when we don’t allow the market to correct itself and address the real issues like our twin deficits and over valued real estate. All the stimulus and the banker bail-out has gotten us is more time in the doldrums and a worse crash in the long run. And it’s cost our grandchildren their future earnings to the tune of around 75% of their earnings that will go to taxes to pay back our debt. Shame, shame, shame on us all.
You aren’t a pessimist Woody, but simply a realist. How in the hell are things going to get better if our leadership continues to allow our ability to make a buck as a nation is ravaged by outsourcing and offshoring? The following extract is from a 2004 article from the CFR. This doesn’t allow for the huge job losses incurred as function of the AIG-Goldman Sachs derivatives debacle that created a ‘need’ for TARP and the ‘stimulus package under our current ‘dear leader’. Millions of jobs have been lost from brokerage houses, to banks to housing and construction. Anyone projecting recovery is talking sh*t as far as I’m concerned. America is heading down the path to a broken, broke down “banana republic”. There will be rioting in the streets, its just a matter of time. We’re now in the sweep hand mode to our ultimate demise. I challenge the “PollyAnnas” on this site to refute my assertions and prove otherwise. Even our professional jobs are being usurped by those issued H1-B visas, this includes medical professionals, not simply tech jobs. No one at the top is addressing this situation. It’s full steam ahead, consequences be damned! The American people have no friends in high places. We’re suffering from “globalism gone wild”… : |
***
“Boston-based consultancy Forrester estimates that 400,000 service jobs have been lost to offshoring since 2000, with jobs leaving at a rate of 12,000 to 15,000 per month, says John McCarthy, the company’s director of research. Other estimates say up to 20,000 jobs a month may be moving overseas. This is in addition to the 2 million manufacturing jobs that are estimated to have moved offshore since 1983. These numbers are predicted to rise. Management consulting firm McKinsey & Company’s economic think tank, the McKinsey Global Institute, predicts that white-collar offshoring will increase at a rate of 30 percent to 40 percent over the next five years. By 2015, Forrester predicts, roughly 3.3 million service jobs will have moved offshore, including 1.7 million “back office” jobs such as payroll processing and accounting, and 473,000 jobs in the information technology industry.” …extract from an article by Sharon Otterman, Council of Foreign Relations, February 20, 2004
Link to entire article
https://www.cfr.org/publication/7749/trade.html
Carl Nemo **==
Main stream economists imbued with the Keynesian tradition still wonder how it is that providing ALL that monetary stimulus isn’t working. Even looking at Japan for guidance, they still believe you can get something, a whole lot of something in fact, for nothing. Tell it to Tokyo.
That was Keynes utopian fallacy: getting something for nothing, but Keynes only had one single economics course during his education. His vision was sociological, not technological, and we all suffer because of those in charge of our economic apparatus who have unknowingly bought into his worthless schtick.
Comments are closed.