Friday, 5 August 2011

More Jobs, Maybe, But the US and the World Are Worrying about the Wrong Things.

Just in case you wondered if things were getting better, here's a link to a breaking story in The New York Times. The job figures for July in the US were better than expected, but did that stop the fall in stock prices? No. After a brief rally, the descent continued.

This is because the people running the show are worrying about the wrong things. As Paul Krugman says this morning: "To turn this disaster around, a lot of people are going to have to admit, to themselves at least, that they’ve been wrong and need to change their priorities, right away.

"Of course, some players won’t change. Republicans won’t stop screaming about the deficit because they weren’t sincere in the first place: ...

"But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority. ...

"Well, it’s time for all that to stop. ..It's now time — long past time — to get serious about the real crisis the economy faces. The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P.

"This might or might not work. But we already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t."

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