Wednesday, January 28, 2004

Can the New York Times be Far Behind?

Can the New York Times be Far Behind?

It may be attributable to competition from the Washington Times, but over the past couple of years, the Washington Post has been significantly less obviously a propaganda organ of the Democratic Party. It supported and continues to support Bush on the Iraq war, and today, it published an editorial explaining so-called "jobless recoveries" in a manner that absolves George W. Bush, or any president of responsibility. Kudos to the Post.

"This is not the first jobless recovery. In 1991-92 the economy grew steadily, but job growth was almost nil. The reason for such recoveries, as a study by the New York Fed argues, is that the structure of the economy is changing faster than previously. In the 1970s and '80s, unemployment was roughly 50 percent "cyclical": Recessions drove firms to lay off workers and recoveries drove them to hire workers back into the same jobs. Now, by contrast, the "structural" component of unemployment accounts for most job losses: Technological and organizational shifts are driving firms to close jobs down permanently, and laid-off workers are having to look for entirely new work. That takes time. Firms have to create jobs they never had before, which takes longer than re-creating old ones. As a result, the new structural nature of unemployment means that job creation lags in the early stages of a recovery."

"The bigger question is whether jobless recoveries are a bad thing. They are, after all, the flip side of good news. There is less cyclical unemployment these days, so recessions are milder; fewer jobs are being created now because fewer jobs were destroyed during the downturn. Moreover, a jobless recovery means, by definition, that each worker is producing more. Higher productivity, in turn, is the best promise possible of higher wages and employment in the future. Just look at the past decade: The jobless recovery of 1991-92 ushered in the longest economic expansion of the postwar period, which drove unemployment down to previously unheard-of levels, and fueled improvements in poverty, crime and other social indicators."

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