The Lost Decade

Paul Krugman writes today in his NY Times blog that we appear to be heading into a Japan-like lost decade.

Prof. Krugman has a chart in his blog of the civilian employment to population ratio from 2006 to the present. In 2006, about 63% of the civilian adult population was employed. Since mid-2009, this number has been hovering around 58.5%, with no discernable uptick. The freefall, as shown clearly in the chart, occurred during the recession.

We appear to be clearly in the era of the "new normal," where unemployment is essentially off the radar screen of those in power, and the unemployed are the root of all evil.

As the good Professor writes in another blog entry,

...if powerful political forces block any effective response to a crisis, there is no effective response to that crisis.