Paul Krugman Talks to Bill Moyers About How to Speed Recovery -- And Why He Doesn't Want to Run the Treasury
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BILL MOYERS: What makes this a depression? You know, my generation remembers the photographs of those long lines of people looking for jobs, men and women both. Remembers the sad eyes, the hungry stomachs. Remembers that men were becoming so desperate they were becoming militant. But today, even though you say the situation, in terms of joblessness, is like the 1930s, you can't obviously, you can't transparently look around and see the evidence of a depression.
PAUL KRUGMAN: That's right. It's, and partly that it's not as bad. So by modern concepts the Great Depression had unemployment rates that were as high as 20something percent by modern measures. And even in 1937, when things had improved, before we went into the second leg of the Great Depression, it was still probably about a nine percent unemployment rate by modern standards. And we've got a seven point something, eight percent, whatever. So things are not as bad. But I think a lot of it is just that the optics have changed.
BILL MOYERS: Optics?
PAUL KRUGMAN: The optic, the misery is there. I mean, is there anybody, I guess if you live in very rarified circles you don't know people who are desperate right now. But I live in pretty rarified circles and I do. I know, I have relatives, friends people I know who have, men my age who've lost jobs and see no prospect of getting another job and are just desperately trying to hang in there until they can collect their social security and get on Medicare. There are young people whose lives have collapsed. You know, they graduate and there's nothing there.
BILL MOYERS: Yeah, you make a very powerful point in here of the impact of being out of work now on the lifetime career of a young person who has no job at the moment.
PAUL KRUGMAN: We have pretty good evidence on, you know, how long does it take to make up for the fact that you happen to graduate from college into a bad labor market. And the answer is forever. You will never recover.
BILL MOYERS: How so, what do you mean?
PAUL KRUGMAN: You will never get, you'll miss years getting onto the career ladder. By the time you get a chance to get a job that makes any sense, you know, that makes any use of your skills, you will already be tarred as somebody, "Well, you're 28 years old and you haven't held a responsible position?" "Well, yeah, I couldn't because there were no jobs." It just shadows your whole life. And it's very clear in the evidence from past recessions, which have been nowhere near as bad as this one.
The other thing I think I want to say here is that we have, in some ways, made things more civilized but also more invisible. Somebody said that food stamps are the soup kitchens of the modern depression. That there're a lot of people who would be standing in line to get that soup, who are instead, and it's a good thing, who are instead getting, I guess it's now called SNAP, Supplementary Nutritional Assistance Program, but who are getting those debit cards, and are getting essential food stuffs. And they're at the grocery store and they look like anybody else. But the fact of the matter is they are still as desperate, they're getting by day to day with the aid of a trickle of government aid, just like the people who were on, standing in line at the soup kitchens in the '30s, but they're not visible. They, we don't have guys selling apples in street corners partly because, you know, the city licensing wouldn't allow that anymore.