Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)
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06 February 12
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a better world - specifically, a world with a better policy elite - a
good jobs report would be cause for unalloyed celebration. In the world
we actually inhabit, however, every silver lining comes with a cloud.
Friday’s report was, in fact, much better than expected, and has made
many people, myself included, more optimistic. But there’s a real danger
that this optimism will be self-defeating, because it will encourage
and empower the purge-and-liquidate crowd.
So, about that jobs report: it was genuinely good,
certainly compared with the dreariness that has become the norm.
Notably, for once falling unemployment was the real thing, reflecting
growing availability of jobs rather than workers dropping out of the
labor force, and hence out of the unemployment measure.
Furthermore, it’s not hard to see how this recovery
could become self-sustaining. In particular, at this point America is
seriously under-housed by historical standards, because we’ve built very
few houses in the six years since the housing bubble popped. The main
thing standing in the way of a housing bounce-back is a sharp fall in
household formation - econospeak for lots of young adults living with
their parents because they can’t afford to move out. Let enough
Americans find jobs and get homes of their own, and housing, which got
us into this slump, could start to power us out.
