Here’s an op-ed I wrote about the current economic situation for the school paper back in August.
I didn’t formally transfer copyright, so the can sue me ()for reprinting it below.
I’d like to touch on three topics.
First, how is the economy doing? The answer is that it’s OK, but not good.
We had the worst recession in 25 years or more, but it’s over. We’re now into the third recovery in a row that has started out weakly.
How weak? If we grade the U.S. economy with the same grade distribution that SUU students earn, over the last eight quarters the economy’s gotten 3 A’s, 2 B’s, and 3 C’s. If you’d be happy with a 3.0, you should be happy with the economy.
Secondly, if the economy as a whole is doing OK, why is there so much unemployment? Here, we have to delve a little deeper. It turns out that hiring and layoffs were out of balance a few years ago, but are in balance again, and they have been for many months.
So how can unemployment still be high? One part of the answer is that the normal turnover of people leaving for better jobs and creating openings in their old jobs is still below normal. The second part is that the longer a person is unemployed, the harder it is to get them back into a job. Because they haven’t had a job for so long, they may look like trouble to a prospective employer.
If you’re a college student, the message is twofold. If you’re new to the job market, you’re probably in better shape than you think: the jobs are out there, and you have no history of unemployment working against you. But, if you’re not new to the job market, and have been out of work, the going gets tougher. You need to convince prospective employers that you are just as good as someone new to the market. And, your history of unemployment creates a void you have to fill with extra effort.
Finally, let’s talk about the debt scare, and our “toxic” political system.
This is an issue that is all about dealing with our spending commitments. The ugly truth is that politicians really don’t have that much control over their cash inflows from tax revenues and borrowing. There was no serious talk this summer about cash not coming in; rather, it was about knowing all too well how much cash had been promised to go out.
By and large, those commitments were not made by current politicians. They were made by people that were elected in the past, and who are often long gone. But, the key point is that they made commitments that current politicians have to try to honor.
This makes our political problems anything but toxic. These are discussions that should have taken place in the past. They didn’t. That was irresponsible, but it doesn’t make the current situation toxic. These are serious issues that our political parties should disagree about: one side wants to honor past commitments, the other side is worried about further committing future generations that can’t yet vote. Both positions are worth defending.