Stimulate by ProQuest


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									From the Editors

        espite the stabilization of the finan-                    remains a potential economic relapse, and possibly deflation.
                                                                  It will take years for the phantom “assets” on the books of
        cial markets, a rising stock market,                      banks and other financial institutions to be paid for or written
        and what appears to be modest                             off. In the meantime, as the staunchly pro-market Economist
                                                                  writes, if we are to avoid repeating the mistakes of the 1930s
growth in the economy as a whole, unem-                           or the economic paralysis of Japan in the ’90s, “the future of
ployment rose to 9.8 percent in September.                        many Western economies will look more like continental Eu-
When all those who have given up looking                          rope in the 1980s, with large deficits, heavy public debts, and
                                                                  stubborn unemployment.” This, the Economist notes, is still
for work are counted, the actual number                           preferable to what would have happened had the fate of the
of unemployed is much higher, perhaps 15                          world’s economy been left to the market alone.
                                                                     In these circumstances, the worst policy proposal imag-
percent or more.                                                  inable is the one put forward by the Republican leadership
   Economists and politicians (at least Democratic politicians)   in Congress to freeze government spending and balance the
are quick to note that employment is a “lagging indicator”—       federal budget. That would truly mean repeating the mis-
that the economy is in the midst of a predictable “jobless re-    takes of the Great Depression, when FDR attempted to bal-
covery.” In other words, even as things improve, employers        ance the budget during his second term only to deepen and
remain wary of adding to their payrolls until they are confi-     prolong economic stagnation. (Still, the chutzpah of politi-
dent about prospects for the future. In the meantime, 8 mil-      cians who vigorously championed the Bush administration’s
lion people have lost their jobs since the recession began, the   budget-busting tax cuts and Medicare benefit program is im-
worst period of job loss since World War II. One out of every     pressive.) Instead, more federal help needs to be extended to
four families has seen someone lose a steady paycheck. And        the unemployed and to state and local governments, propos-
few experts expect things to get better soon. There seems to      als the Obama administration is pursuing, and there should
be little doubt that unemployment will climb to more than         be new
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