If this expansion is typical, then we can expect just 2 months of job growth beyond the previous peak before the next recession hits.Now suppose that job growth limps along at a monthly average of 150k a month.
Transcripts: There are a lot of folks out there who are still struggling with the effects of the recession. steps that we can take right now that would help... At 200k jobs a month - a seemingly optimistic forecast at this point - we regain the peak in about 35 months.
Many people are still looking for work or looking for a job that pays more. Of course, one of the most important and urgent things we can do for the economy is something that both parties are working on right now, and that's reducing our nation's deficit... We are already (believe it or not) 23 months into the expansion, which means that we recover the jobs lost in this cycle after a 57 month expansion.
Now consider this: The average post-WWII expansion is only 59 months.
New ways to borrow and to spread risk seemed to have little downside. Republicans aren't just threatening to put the economy at risk in the future if they don't get their way, they are already doing so.
More competition for investment-banking oligarchs from commercial bankers and insurance companies with deep pockets seemed likely to reduce the investment banking industry’s unconscionable profits. If this continues there will likely come a point when markets get the jitters, and if that happens, watch out. And, to be sure, the magnitude of the labor market damage wrought by the recession weighs heavily on my mind.
Analytically, we are still picking through the wreckage of this experiment. Moreover, how to restructure the financial system remains unclear. And central banks’ failure to regard their primary job to be the stabilization of nominal income – their failure not only to be good Keynesians, but even good monetarists – raises the question of whether central banking itself needs drastic reform. It may even be the case that we ought to return to the much more tightly regulated financial system of the first post-World War II generation. Moreover, the length of time to recovery seems immense.
That system served the industrial core well, at least as far as we can tell from the macroeconomic aggregates. And, on top of both of these, we effectively reduce our expectations of "recovery" with this chart - recovery should be about capturing the previous trend, not the previous peak.
Bradford De Long, Commentary, Project Syndicate: Back in the late 1990’s, in America at least, two schools of thought pushed for more financial deregulation...
The first school of thought, broadly that of the United States’ Republican Party, was that financial regulation was bad because all regulation was bad. We have Republicans threatening to default on the debt and blow up the economy if they aren't allowed to put the economy at risk in another way -- through immediate deficit reduction -- and a president selling the demands from the other side as a jobs package.