Op-Ed Columnist

The Forgotten Millions

By PAUL KRUGMAN Published: March 17, 2011

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More than three years after we entered the worst economic slump since the 1930s, a strange and disturbing thing has happened to our political discourse: Washington has lost interest in the unemployed.

Fred R. Conrad/The New York Times

Paul Krugman
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Jobs do get mentioned now and then and a few political figures, notably Nancy Pelosi, the Democratic leader in the House, are still trying to get some kind of action. But no jobs bills have been introduced in Congress, no job-creation plans have been advanced by the White House and all the policy focus seems to be on spending cuts. So one-sixth of Americas workers all those who cant find any job or are stuck with part-time work when they want a full-time job have, in effect, been abandoned. It might not be so bad if the jobless could expect to find new employment fairly soon. But unemployment has become a trap, one thats very difficult to escape. There are almost five times as many unemployed workers as there are job openings; the average unemployed worker has been jobless for 37 weeks, a post-World War II record. In short, were well on the way to creating a permanent underclass of the jobless. Why doesnt Washington care? Part of the answer may be that while those who are unemployed tend to stay unemployed, those who still have jobs are feeling more secure than they did a couple of years ago. Layoffs and discharges spiked during the crisis of 2008-2009 but have fallen sharply since then, perhaps reducing the sense of urgency. Put it this way: At this point,

the U.S. economy is suffering from low hiring, not high firing, so things dont look so bad as long as youre willing to write off the unemployed. Yet polls indicate that voters still care much more about jobs than they do about the budget deficit. So its quite remarkable that inside the Beltway, its just the opposite. What makes this even more remarkable is the fact that the economic arguments used to justify the D.C. deficit obsession have been repeatedly refuted by experience. On one side, weve been warned, over and over again, that bond vigilantes will turn on the U.S. government unless we slash spending immediately. Yet interest rates remain low by historical standards; indeed, theyre lower now than they were in the spring of 2009, when those dire warnings began. On the other side, weve been assured that spending cuts would do wonders for business confidence. But that hasnt happened in any of the countries currently pursuing harsh austerity programs. Notably, when the Cameron government in Britain announced austerity measures last May, it received fawning praise from U.S. deficit hawks. But British business confidence plunged, and it has not recovered. Yet the obsession with spending cuts flourishes all the same unchallenged, it must be said, by the White House. I still dont know why the Obama administration was so quick to accept defeat in the war of ideas, but the fact is that it surrendered very early in the game. In early 2009, John Boehner, now the speaker of the House, was widely and rightly mocked for declaring that since families were suffering, the government should tighten its own belt. Thats Herbert Hoover economics, and its as wrong now as it was in the 1930s. But, in the 2010 State of the Union address, President Obama adopted exactly the same metaphor and began using it incessantly. And earlier this week, the White House budget director declared: There is an agreement that we should be reducing spending, suggesting that his only quarrel with Republicans is over whether we should be cutting taxes, too. No wonder, then, that according to a new Pew Research Center poll, a majority of Americans see not much difference between Mr. Obamas approach to the deficit and that of Republicans. So who pays the price for this unfortunate bipartisanship? The increasingly hopeless unemployed, of course. And the worst hit will be young workers a point made in 2009 by Peter Orszag, then the White House budget director. As he noted, young Americans who graduated during the severe recession of the early 1980s suffered permanent damage to their earnings. And if the average duration of unemployment is any indication, its even harder for new graduates to find decent jobs now than it was in 1982 or 1983. So the next time you hear some Republican declaring that hes concerned about deficits because he cares about his children or, for that matter, the next time you hear Mr. Obama talk about winning the future you should remember that the clear and present danger to the prospects of young Americans isnt the deficit. Its the absence of jobs.

But, as I said, these days Washington doesnt seem to care about any of that. And you have to wonder what it will take to get politicians caring again about Americas forgotten millions.