NY Times: Jobless and Staying That Way

[marmar]

Jobless and Staying That Way

By NELSON D. SCHWARTZ
Published: August 7, 2010


Americans have almost always taken growth for granted. Recessions kick in, financial crises erupt, yet these events have generally been thought of as the exception, a temporary departure from an otherwise steady upward progression.

But as expectations for the recovery diminish daily and joblessness shows no sign of easing — as the jobs report on Friday showed — a different view is taking hold. And with it, comes implications for policymaking.

The “new normal,” as it has come to be called on Wall Street, academia and CNBC, envisions an economy in which growth is too slow to bring down the unemployment rate, while the government is forced to intervene ever more forcefully in a struggling private sector. Stocks and bonds yield paltry returns, with better opportunities available for investors overseas.

If that sounds like the last three years, it should. Bill Gross and Mohamed El-Erian, who run the world’s largest bond fund, Pimco, and coined the phrase in this context, think the new normal has already begun and will last at least another three to five years.

The new normal challenges the optimism that’s been at the root of American success for decades, if not centuries. And if it is here, the new normal could force Democrats and Republicans to rethink their traditional approach to unemployment and other social problems. ..........(more)

The complete piece is at: http://www.nytimes.com/2010/08/08/weekinreview/08schwartz.html

[Kat45]

1. The current state of things should never be called 'normal,' 'new' or not

It should not be considered normal to have such high unemployment. If it is considered normal, the thinking will be that it's ok, that there's nothing you can do about it. That is not acceptable.