Dollar Wise and Pound Foolish?

I am not an economist. I am simply a Job Acquisition Specialist who is (who has been) looking for a job, following layoffs at my previous employer. And based on the tepid results of my job search and that of many, many other friends, colleagues, and acquaintances who are in the same boat, I believe that many of the nation’s unemployed will not be able to be employed again. There is a shortage of jobs as companies and governments have eliminated jobs and scaled back hiring.

I have also been concerned with some of the political rhetoric in this country that seems to be based on self-centered, emotional preservation of personal principle (and one’s own job) rather than on sound, educated research and considered analysis.

Paul Krugman, a Nobel-prize winning economist, wrote recently in the New York Times:

"So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.

And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again."

Mr. Krugman also wrote that cutting back on unemployment benefits for millions of Americans will only worsen the economy as spending, which stimulates manufacturing, business, and growth, will be cut back even further. No spending = less money being spent at groceries, local businesses, and Target = further cutbacks on hiring = more people being unemployed = fewer charitable donations = more people and organizations in need. So extending unemployment benefits for the reported 15 million unemployed Americans (and most economists believe the number is even higher since so many people have simply dropped out of the job market after a long period of being unemployed OR they are under-employed, having taken part time jobs while waiting for the economy to improve) may seem counter-intuitive, but history indicates that is not the case.

From Mr. Krugman’s July 4 op-ed in the New York Times:

"One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months."

I fear that America has sunk to such a partisan, tit-for-tat mentality that there is little hope of coming up with a recovery plan that is in the best interest of the country as a whole. Anyone else have more confidence than I do?

It’s hard to imagine that the economy could worsen, but it seems a very real possibility. And what is the first thing people do when there is fear of a depression: cut spending even more (even the employed will cut spending and find ways to save money). And, of course, this then leads to cuts in manufacturing, sales, and jobs.

Is it too late to go to medical school? I think there is going to be a need for physicians in this country in the next few years.