NY Times Asks Whether Washington Is Focusing Enough on the Economy

A Times editorial today asks a question we've been asking for sometime:

Without job growth and pay raises, consumer spending will not revive substantially because alternative sources of spending power — home equity and credit cards — are largely tapped out. And without an upsurge in spending, businesses will not add workers, and so on, in a decidedly unvirtuous cycle.

It has become commonplace to explain each dismal job report by saying that a resurgence in employment always lags general economic recovery. But with the job market severely wounded, and with consumer spending expected to be weak for a very long time, it could easily take until 2014 for employment to recover. It’s safe to say that five years or more of subpar job growth is not what most people have in mind whenthey think of a “lag.”

The question, then, is how bad does it have to get before the Obama administration and Congress make job creation a priority.

Will administration officials and lawmakers fight for new laws to make it easier to form unions, which are especially important in elevating and protecting the jobs of low-income workers? How will professed support for green jobs be translated into a manufacturing policy that promotes good jobs? Will efforts to improve the educational system also include serious efforts to train and retrain people for new jobs?

On Thursday I released a memo, The Key to the Fall Debate: Staying Focused On The Economy, which made the case that getting people back to work, and wages and incomes up, is the most important domestic challenge facing our government today.