Study: It'll take 11 1/2 years to regain jobs lost in this recession



carolyn lochhead logo.jpg

Of course, the economy could take off like a rocket as it did in the 80s and 90s, in which case it might take “only” five years.

The projection is right in line with warnings by economists Carmen Reinhart and Kenneth Rogoff about the aftermath of financial crises in their groundbreaking “This Time Is Different: Eight Centuries of Financial Folly.” See their update here.

Also of note: soaring government debt and often default is another common theme after a financial crisis.

From Reinhart on the international experience with episodes of severe banking crises:

? Financial crises are protracted affairs.
? Asset market collapses are deep and prolonged.

? There are profound declines in output and employment.

The unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years. Real GDP per capita falls (from peak to trough) an average of over 9%, the duration of the downturn averages roughly two years.
? There are significant adverse consequences of the financial crisis on government finances.

  1. Joe says:

    The Main Stream Media told you last year that 10% unemployment was the “new norm”. And, you were expecting less…?

    Luckily, we won’t see inflation, at least not “officially”, as that is measured in increased wage rates and that aint gonna happen in the near future.

    Now the consumer will see inflation and much speculation by the Main Stream Media about rising costs. But, we won’t broach the subject of dilution of the dollar due to government spending and government debt. No, we’ll have countless stories in the future about different industries and their rising costs to the consumer.

    I love a parade.

  2. jakester says:

    We’ll never pay off the debt Obama added to the deficit, from the stimulous, health care, etc NEVER.

    We will recover jobs when the last of the boomers retire, whoever happens to be president at the tiem or has the majority in the houses will take credit.

  3. the jubilee says:

    omg Joe you have no idea what you’re talking about. Inflation is not measured in wages and 10% unemployment is not the new norm. The strength of the dollar is not controlled by government spending or debt. Also, you said “luckily we won’t see inflation” followed by “now the consumer will see inflation.”

    Please dude, do some reading.

  4. the jubilee says:

    jakester – you mean we will pay off George Bush’s debt but not Obama’s?????

  5. Dave says:

    That figure of 11.5 years is only for “normal states”..the highest taxed states like New York have been bleeding jobs for decades before the “Great Recession”.. Once the jobs leave New York..They never come back..especially with the job killing record tax increases New York has year after year…

  6. jakester says:

    jubilee, who controls the houses controls the budget, that’s where spending is approved. Which has been the democrats…
    Bush had terrorism, wars and rebuilding to contend with along with careless policies of Clinton, who along with help from Cuomo and others led to the financial/banking and housing collapse.

  7. Rocco says:

    Thanks again George W Bush.
    Worst job creation record of any president since WW2: George W Bush

RSS feed for comments on this post.