The Deep Hole

Paul Krugman’s column today is a sober reminder that even in places where some economic indicators are improving, we are still in a deep economic hole and are years away from getting out of it. The only place where I think Krugman goes wrong is his assertion that we aren’t done digging in our hole. First, we still have a foreclosure crisis which is likely going to continue for another couple of years and affect millions more homeowners. This will continue to crush working families, drive down property values (tying people to their current location), and keeping new construction down. Second, Krugman fails to specifically mention how Republican attacks on public servants are going to lead to further job losses at the federal, state, and local levels. Government is one of the few areas which can be reliably creating job now. But instead of stimulus projects being used as job engines, we’re more likely to see cuts in public jobs. Workers are already being forced to take furloughs, collective bargaining agreements that are up this year will be met by hard bargaining and union busting efforts by governors of both parties, and those workers who don’t have the protection of unions can expect even worse results. Oh and for workers who are retiring soon, their pensions are already shells of what they should be – both because of the economic collapse and deliberate choices by Republican politicians to not meet contractually obligated funding line items.

All of this is to say that while things may well be on a real uptick, the climb is going to be steep and it’s likely that we fall back before we get out of this economic hole.

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