I’ll give you a hint…via @joshorton:
I’ve been waiting a long time to be able to relate economics to Animal House, so I am very excited about that right now. What I am not excited about is, well, the job numbers. From the Bureau of Labor Statistics:
Nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major industries changed little over the month. Health care continued to add jobs, and a decline in information employment reflected a strike. Government employment continued to trend down, despite the return of workers from a partial government shutdown in Minnesota.
In fairness, the unemployment numbers haven’t really changed significantly since April, but a number of literally zero tends to get people’s attention. In related news, did you know that we haven’t been in a recession since June 2009? Yeah, me neither. Technically, a recession means that the economy is actively getting worse, whereas the current situation is one where things just aren’t getting better.
Fairly or not, the media is pouncing all over President Obama for letting this happen. In my ideal world, I would point out that the United States is supposedly a free-market economy and therefore business cycles are not the government’s problem. However, the Employment Act of 1946 explicitly makes unemployment the federal government’s problem. (Interestingly, it’s also this act that created the Council of Economic Advisers.) This puts the government in somewhat of an awkward spot- it’s expected to make things better but is criticized when it tries to do…well, just about anything.
I suppose that’s a moot point, since it’s unclear what sort of policy would have a real effect. Interest rates are low enough that expansionary monetary policy is likely useless (even QE2 wasn’t the silver bullet that policymakers were hoping for), increasing government spending for stimulus purposes is extraordinarily politically unpopular, and companies are hoarding enough cash that tax breaks aren’t likely to all of a sudden get them hiring.
Austan Goolsbee (and others) have said that “confidence is the cheapest form of stimulus.” So where can we go buy some of that?