The economy needs to add about 360,000 jobs each month to push unemployment down to about 6 percent and provide employment for those frustrated adults. That would require GDP growth in the range of 4 to 5 percent.
Over the last four and one-half years, the pace of GDP growth has been a paltry 2.4 percent—about the same as during the Bush expansion. Ronald Reagan inherited a much tougher unemployment situation than either the two most recent occupants of the Oval Office, yet he managed 4.8 percent growth and created many more jobs.
Technology and globalization are most frequently blamed for the listless jobs market but nothing is particularly novel about the current era. Disruptive technologies began when the arrow replaced the stone, and international commerce has been on the upswing long before Marco Polo.
In all times, the quality of government policy, business culture and individual initiative decide which societies most effectively exploit new technologies and broader commercial opportunities, and accomplish prosperity and productive employment for the wider citizenry.
The defining difference between the recent two disappointing economic recoveries and the strong record of the 1980s has been the predisposition of presidents from both parties to champion politically-expedient remedies—bailouts and entitlements that steal money from promising R&D, public infrastructure and private investment to bolster inefficient hospitals, abusive financial houses and decadent universities.
When the best incomes are to be earned gaming regulators, dodging prosecutors and fielding gladiators for Saturdayspectacles, no wonder the economy doesn’t grow, and one out of every six adult men is jobless and likely to stay that way.
Decadence begets decay.
Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He tweets @pmorici1
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