Good job Krugman. On George Stephanopoulos' show, Krugman amplified a much needed new term for the state of the economy, purgatory!
We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering. Either you're in hell or you're in heaven. And the trouble is we're actually in purgatory. We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer. But almost surely also we're still losing jobs. The unemployment rate is going to continue to rise. So we're in that infamous jobless recovery state.
I am thrilled to see a third economic state defined for this has been a major problem, things are simply not on/off, black/white and the nomenclature doesn't allow for fuzziness. All of these 2D terms and thinking probably exacerbates the infamous green shoots vs. brown weeds ongoing arguments.
So now we have the odious term, jobless recovery redefined as economic purgatory.
Even better, Robert Reich says anyone who thinks we're out of the woods is lost at sea. Watch clip below:
Many of us on The Economic Populist have noted correlations between jobless recoveries, now known as purgatory, and bad trade deals, the race to the bottom otherwise known as globalization. It appears Krugman is implying bad trade policies, labor arbitraging workers, also are assuredly not the nirvana they were sold to be!
(ABC has entire show and longer video segment which also discusses health care by Krugman and Reich)