A pattern that I see when I read discussions about the unemployment problem is that someone makes a statement about what might be wrong, someone else comes along and denies there’s a problem stating that the people who are out of work are doing it by choice, and then someone else proposes a different diagnosis.

From my perspective, the numbers don’t lie (although I agree that U is understated). And it isn’t just the current set of numbers that tell the story; it’s the comparison between prerecession statistics and the current ones that give us a full view of the preferences and habits of people who are likely to work. Any hypothesis of unemployment as it stands now should take all of those into account in order to be considered be plausible. In addition to that, there are other factors that should be taken into account, such as the demand for housing or household creation, the level of foreclosure and bankruptcy, and defaults. To me there isn’t any question that there are dramatic effects going on at present that are irregular, but consistent with economic recession. There isn’t a slow process of evolution illustrated by the statistics as what might be suggestive of an evolution of preference for leisure over employment, or a preference for leisure at the consequence of default and financial ruin. It is possible people might have all of a sudden decided to lose everything and destroy their credit for the sake of leisure. But is that plausible? It seems a bit dramatic to me, and really doesn’t make a lot of sense.

From what I see in the statistics, and what I know about the macroeconomic situation, yes, there are victims of the recession. Their jobs were destroyed in the demand shock from the price level falling, and other opportunities are yet to come. As hard as it is for some to admit, there isn’t always a personal explanation for failure on the part of the individual. If there were, it would be indicated in the prerecession statistics and not show as a near immediate change that is consistent with other events that we know happened.

It amazes me that much of the stuffing of the issue under the rug and blaming the unemployed themselves for the effects of government smothering the economy like a wet blanket and crashing the financial system comes from the right. I don’t know if they intend to deny the real tragedy of what government schemes do to all of us, or maybe cover it up, but they don’t seem to notice the ideological paradox they create with their own incredible arrogance in trying to explain away the issue as a problem of moochers and underachievers trying to get all they can out of society. I don’t intend to deny that there could be some doing that. There always have been, and that would be indicated in prerecession statistics as well as now. In order to be right, they would have to explain the sudden upward movement in the statistics that coincides with the mortgage debacle and the financial crisis, and the hypothesis they present just doesn’t.

I would actually expect Obama operatives to push this kind of explanation in order to deny responsibility for doing nothing constructive to aid recovery and the appearance of opportunity because what we have here are the real effects of out of control government – out of control on supply side policies and out of control on monetary policy. It is a toxic mix of policy clashes that produce real tragedy for real people, and I think we really need to ask the questions about whether this is an acceptable cost to the things government does, or if some rationalization of the current state is required to minimize the amount of victims that are created by it. We cannot even get to those questions nor have a serious debate about the issue as long as we are denying there is one. And of course, denying there is a crisis in the ability to be self-sufficient not only defies what the statistics are telling us, but it doesn’t make that reality go away.

Update:

Here’s a good picture of that I am talking about. We are gaining ~120k / month, which has onlyb happened since the very end of last year. The 120k is close to the estimate of what is needed to keep up with population growth.  We still have a net loss of ~6.8M jobs. For those who say there are no victims of the recession, please explain these 6.8M people who, by the math, have nothing to go to.

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