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2010? Meh.

The year 2010 is nearly over.  What happened?  A fair number of celebrities died, a few videos went totally viral, and a few trends were established.  That’s what I get from the nooze, at least.

But what happened economically?  It turns out to be not much.  That is what everyone is complaining about, too.  I’ll do my best to explain just what nothing looks like as colorfully as possible because what we all expect from 2011 is something.  Not that anyone knows what it is, just that it won’t be this blah.

I’d like to start with what everyone is (finally!) focusing on, jobs.  Here is the total employment in the US from 2000 on, thanks to the brilliant Federal Reserve of St Louis and their FRED system:
I apologize that the y-axis does not start at zero.  But you can still see from this chart that we lost about 8M jobs since the peak of 146M from 2008-2010, but gained back 1M.  We spent the last year very stable overall, at a level of total jobs roughly equal to 2005.  Why isn’t that good enough?

This is the story of 2010 that no one wants to report because it’s so troubling, but it’s very true.  What is happening to us right now is not just about the Managed Depression and the ability of those who are in charge to keep us on an even keel – this is about long term demographic shifts.

The problem is that the Millenial generation is entering the workforce and not finding jobs at all.  Even if we could conjure up 7M more jobs the way we do US Dollars, it still wouldn’t be enough – we need more like 10M to absorb the unemployment we have.

That’s right, I just said that all the young talent in the workforce is a problem, not an asset.  If you want to argue that this is an entirely backwards, wrong-headed way to look at it I’d almost certainly agree with you, too.

There is a story buried in the news that has been reported in 2010 and the news that was ignored this year.  Today, the last Barataria piece of 2010, is my summary of what happened over the last year and I wanted to frame it through this story that no one is willing to talk about.  There is a generational change moving through our economy and politics that has yet to be fully defined.  What we do know is that the Managed Depression has hit the young far harder than any other group.

There have been other economic stories of great importance in this year when we bounced back the tiniest sliver of what everyone was hoping for and then stayed put.  We certainly learned in 2010 that our leaders were panicking far more (and far earlier) than anyone has ever thought.  But the real story is that the stability that they were able to give us is both very real and clearly inadequate.

The need for serious growth only underlines the sense of urgency that is missing in Washingtoon.  It is unreasonable to think that we can manage our way out of this problem with cool professionalism.

A summing up of 2010 on Barataria can be found by following the links provided.  Why it wasn’t enough is a different story, however.  Here’s hoping for a bit more realization in 2011.

8 thoughts on “2010? Meh.

  1. Erik, once again thanks for your writing. I don’t get to listen to MPR much but every once in a while I hear “echos” of what you are writing about. A number of months ago I heard about the overnight loans but never heard the pricetag associated with them. Yesterday at the end of talk of the nation a policy thinker bemoaned the fate of young people in the labor marketplace saying something to the effect that we need something beyond internships “cuz if there is a time we need a bridge to the 21rst century this is it . Something akin to a ccc or wpa program.
    Also yesterday I read in Slate what happens to people when they finally run out of unemployment insurance. Turns out not much (?) but a harsh turn to poverty (reliance on food aid, heating aid, housing aid) and then suicide risk is at its highest.
    I turn to the Guardian for interesting takes on their news. Why in its own twisted sense policy sometimes becomes more interesting when the right assumes control? There is backlash against the moderate liberals, youth riots over education cuts, charities getting gutted just when they are asked to do more for the BIG Society, the church of England speaking out against the new policy.
    I apologise if for any time I have become a pain in the butt. But a suggestion for the new year. The neurobiology of the pain matrix and its link to empathy and compassion.

  2. I have heard a few things on this but no one has had the emphasis you do on it. If you look at the chart the job loss really doesn’t look that bad so your call that this is a depression doesn’t seem as important. Which do you think is the more important thing, the demographic shift or the depression cycle?

  3. My vote is for demography. Look at Tom Stinson and Gilapsie of the Mn depts. for a good analysis. This shift from babyboomer from young to old will effect much. Education, resource dollars, housing, transportation, work and healthcare most of all.

  4. Dan, Anna: I set it up wrong if you see this as a pull between the industrial cycles and demographics – I think they are closely related, to be honest. I’m not sure what the relationship is at this point but I do think that the demographics are a big part of what we’re seeing no matter what.

    Dan, you always raise good points. MPR is the best place, far and away, for any discussion of these issues. I missed the one where the problem for young people was raised, but to me that’s issue #1 as we move forward. A lot of “experts” have said that this is a decades-long problem that we’ll have, so I don’t want to hear about short-term fixes. To me, the only solution has to be a generational change-over in the workforce – and the sooner we get that, the better. That’s why I was promoting the one-time buy-in to social security as an alternative to unemployment benefits.

    Reducing the overhead per employee remains my top choice to fix the employment problem, but we can’t underestimate the power of the demographics we’re up against. I’m glad you heard a good discussion of it – but I really do want more! I won’t come up with all the answers but I’m sure if we focus on it we all, together, can come up with something.

  5. I think that it would be impossible for the kids of the next generation to screw things up as much as the Baby Boomers have, so why not give them a chance?

  6. Dale, the bottom line is that the sooner the Baby Boomers move out of our economy the sooner we’ll find out just how good the next generation is. We need to make room for them, I’m sure of that much.

  7. Pingback: Economic Update | Barataria – The work of Erik Hare

  8. Pingback: State of Jobs | Barataria – The work of Erik Hare

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