The Jobless Trap – – Paul Krugman

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Swedish Academy of Science in Stockholm (Photo credit: Wikipedia)

Here is a MUST READ article by Paul Krugman, the Nobel winning economist,  in the NYT. Check it out!

The Jobless Trap –

Krugman focuses on the long-term unemployed that are are a direct casualty of misguided and erroneous policies of austerity. It’s time to focus on getting people back to work and addressing the cancer of youth unemployment, the lost generation.

Policy-makers need to be bold and embrace tested Keynesian medicines for recession. Central banks have done magical stuff, now it is the turn of fiscal policy. Huge reflation is required.

Because of the austerians, there will be a huge skills shortage. It is time to bring back all people on the bench including executive interim managers, independent consultants and the like, rather than import labor from overseas.

Because of the IMF, the focus is on three major economies:

In the case of Germany, austerian policies have caused huge economic carnage across Europe, especially in the Southern countries, like Greece, Cyprus, Spain, Portugal and Italy. Sadly, I fear that nothing will change in Germany until after the election.

Probably, the country that can respond quickest is the UK but it is questionable whether UK Prime Minister, David Cameron, and Chancellor George Osborne have the political stamina for a full-blooded U-turn.

What do you think?

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