Disastrous to employment. Absolutely right. And in the more modern, 21st century
sense it doesn’t even have to be outright deflation anymore. We’ve seen
time and again that a realistic threat is all it takes (a reminder
about what happened last September before this March).
Familiar to us, if not always easily recognizable, it’s
the very hazard of unsolved, chronic liquidity risks that spikes the
dollar, keeps interest rates low (interest rate fallacy), and, as Keynes
said, is therefore disastrous to employment by the introduction of what
current Economists and central bankers otherwise call, while they do
everything humanly possible to avoid recognizing, macro slack.
Bernanke, like his predecessors and successors, claims to be a keen follower of Keynes anyway.
What comes next is the weekly reminder about the labor
market; initial jobless claims were 870k last week. That is, still, in
the middle of September, 200k more than any of the worst weeks
on record before March. And this latest “disastrous to employment” comes
to us on top of the macro slack which has already forced the Fed to
redefine (undefine, really) their whole conception of full employment.
They’ve got everything covered. Recovery’s in the bag.
That’s the story, and it’s one with all the same characters, all the
same scenery, and, least surprising of all, the same ending.
Read more at:
The Economic Recovery Story Is As Fake As Ever | RealClearMarkets
