Two weeks ago Paul Krugman talked about the liquidity “gap” as the big issue in this recession.
In his piece today here, he focused on the recent news of higher than expected unemployment. While I concede that unemployment inching toward 10% is troubling, I still get back to something I wrote about a couple of weeks ago – we need several specific goals so that we can really know when we are making progress. Focusing on one measure right now, out of the context of all of the other factors in this economy just isn’t very helpful.
What level of unemployment is the target in the short term? How much spending is enough consumer spending? What level of unemployment is enough progress? How much additional (or less) regulation is needed in financial services? There needs to be a list of key indicators so that people stop jumping up and down about one of them, largely out of context.
Krugman says the Obama stimulus plan to create 3 .5 million jobs isn’t “remotely enough” but he doesn’t define “enough” and I am sure he doesn’t think it’s realistic to get unemployment to zero. I wouldn’t be at all surprised if creating that many jobs in the right places would go a long way (please create some infrastructure jobs in Washington state to fix the horrible roads so my car doesn’t take such a beating), but I don’t have enough visibility into the other key drivers to know what else has to happen in parallel with that to be “enough.”
If we don’t define enough, if we don’t define success, how are we ever going to declare victory?
-Ric
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