Unemployment may be the Achilles heel of the economy ["Nine Reasons the Economy is Not Getting Better," usnews.com]. Not much is said these days about technological unemployment. Perhaps at no time in history has so much been produced with so few workers. That's one of the contradictions of the economy. At some point the distribution problem will have to be faced.
Comment by Joseph DeLassus of MO
We had 25 years of pulling demand forward by increased personal and government debt. Increasing debt (or merely shifting it from the private sector to the public, like the Fannie, Freddie, AIG, CitiGroup, and soon CIT bailouts did) only worsens the problem. There is still a ton of bad debt out there. It needs to be defaulted. Investors in bad mortgage debt (residential & commercial) need to take massive losses. If the big banks all go under, they go under. Too big to fail is too big to exist. Backstopping Citi debts to the tune of $300 billion was exactly the wrong thing to do. Geithner, Bernanke & Paulson all confuse Wall Street with the U.S. economy. Everyone is dancing to Goldman's tune. This analogy that halting the debt morphine too quickly might kill the patient (the economy) is crap. The U.S. economy cannot be "killed." No matter how bad it gets, we will still have an economy. We need to expunge the bad debt and let companies fail. After that we'll be poised for a true, sustainable recovery.
Comment by Iska Waran of MN
Zuckerman, your article, as usual, was well thought out and succinctly written. The facts you present seem plain, and the solution you propose seems like common sense. So how is it possible that our erstwhile responsible Republican leaders in Congress—with their large staffs of smart and educated people can have a clear picture of our economy (or they can just read your columns)—and take the stand that they are against further stimulus? The Republican Party seems to have transformed itself into a party of know-nothing, brutish, and uncaring yahoos. Or is it actually possible that the Republican congressional leaders want the U.S. economy to fail while under Democratic leadership? I ask this regretfully, as someone who used to say he was a Republican.
Comment by Steve Wang of PA
The consumer-driven economy doesn't work anymore. People are changing their habits. They are saving more and consuming less. They are realizing they do not need more "stuff." They still like to go out to eat, to be entertained. Spending one's way to happiness has created a lot of stress and little happiness. The consumer system is broken. You can't fix it. We need a new economic model. I don't see one on the horizon.
Comment by Phil of OR
Zuckerman, your article is right on. I am glad someone is talking about jobs, jobs, jobs. I woke up this morning and discovered our tax bailout money is going to fund more billion-dollar bonuses for Goldman Sachs executives. How many jobs can that create? And we still heard from guys writing comments that we need to give these same guys more tax cuts. Don't we see these guys are taking us for a ride? We need good-paying jobs, like the ones that FDR provided in the Great Depression. We have tried tax cuts for eight years and what a mess we are in now.
Comment by Joseph of TX