The Great Recession wiped out what amounts to every U.S. job created in the 21st century. But even if the recession had never happened, if the economy had simply treaded water, the United States would have entered 2010 with 15 million fewer jobs than economists say it should have.
Thanks to Tyler Cowen for the pointer. Read the whole thing. I love it and I hate it.
What I love is that he looks at the entire decade, not just the last two years. I have been trying to make that point, also. In addition, he focuses on the employment/population ratio, which I think is a better indicator than the unemployment rate.
What I hate are sentences like this:
Before we can fix our jobs machine, we must figure out what broke it.
How many things bother me about the sentence? Start with the "we." Then go to "fix...machine." When you think of the economy, think of a rain forest that you live in and study, not a machine that you fix.
Finally, economic progress is not really about creating jobs just to create jobs. It is about exploiting ideas, comparative advantage and the division of labor. The benefits of progress include more leisure and a reduction in the danger and unpleasantness of work.
I don't think any of us knows where this reconfiguration is leading. My bet would be that Robert Fogel is correct, and that health care, education, and leisure are the future growth sectors. But I doubt that we will get to where we are going any faster by pumping up aggregate demand. Demand policy reminds me of an old Bill Cosby joke about trying to fuel a car by pouring gasoline all over it and hoping it will seep in somewhere.