Paul Krugman’s column today really shows that the only structural problems that exist in our economy today are in the inability of policy makers to confront the employment crisis through bold action. Krugman writes, ” We aren’t suffering from a shortage of needed skills; we’re suffering from a lack of policy resolve. As I said, structural unemployment isn’t a real problem, it’s an excuse — a reason not to act on America’s problems at a time when action is desperately needed.” Things aren’t mystifyingly complicated – we need stimulative government spending to that is specifically designed create jobs.
Incidentally, Duncan Black has been saying for months that it’s just a matter of time before conservatives start doing what Krugman identified today – namely, saying high unemployment is structural and there is little that can be done about it, so everyone should just get comfortable for the long haul. It’s sad to see Duncan proved write.