South By North Strategies, Ltd.

Rortybomb summarizes two competing views of the state of the American economy.

The [Obama administration’s] story goes like this: the real lifting is done, and we must remember that following a financial crisis there’s a limited amount that the government can do. There’s a minor program of stuff left to do that conceptually involves clean-up.  What’s left is to get workers skills, because the long-term unemployed will be left behind as new jobs come. We need to make some small targeted nudges to businesses to get them to hire through various R&D style credit rebates. And we need to start to get very serious about cutting the deficit because the medium-term deficit is going to be a check on any real recovery.
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Regular readers know I don’t see the economy that way. I don’t think Reinhart/Rogoff justifies inaction.  The idea that job openings justifies moving to skills training and other “structural” concerns isn’t justified in the data.  I haven’t seen good evidence that the long-term unemployed are a particularly weak form of labor against historical trends and I’m not particularly convinced that R&D style tax credits aren’t just collected as rents by incumbents. And I think the administration moved to deficit reduction too early, as I don’t see why medium-term debt/GDP ratios impact a recovery.  I see that we should be concerned about a jobs problem, while the administration sees that we should be concerned about a confidence problem.