By Simon Avery
Trust Paul Krugman to spell it out for us in simple language. The Nobel Laureate and economics professor at Princeton University entitles his latest New York Times column: “Bernanke’s Unfinished Mission. ”
He argues that a mix of complacency and fatalism has replaced the sense of urgency that filled the Fed late in 2008 and early this year.
The Fed needs to do more to reduce unemployment because the Obama Administration has come up short, he says, raising the prospect of the Fed buying another $2 trillion (yes a “T”) in assets.
“I don’t think many people grasp just how much job creation we need to climb out of the hole we’re in. You can’t just look at the eight million jobs that America has lost since the recession began, because the nation needs to keep adding jobs — more than 100,000 a month — to keep up with a growing population.”
Over the next five years, the U.S. needs 18 million new jobs, or 300,000 a month, he calculates. So why in the world is anyone cheering news of job losses of only 11,000 in November?
“The Fed sprang into action when faced with the prospect of wrecked banks; it doesn’t seem equally concerned about the prospect of wrecked lives.”
