Monday night I gave a talk at George Mason University on the jobless recovery; in the comments Pete Boettke summarizes some parts of the talk. One point I made is that the slow aspects of the recovery do not, contrary to some accounts, seem to stem from uncertainty about the plans of the Obama administration. I see at least two reasons for this doubting this account:
1. Output has recovered much more rapidly than the labor market; last quarter gdp growth exceeded five percent yet employment is essentially flat. The labor market is one of the least regulated sectors of the American economy, so it would be odd if regulation were causing the slow aspects of the bounceback. Many of the extant government-blaming hypotheses predict slow output growth, not rapid output growth and slow labor market participation.
2. Arguably health care and finance have been subject to the most regulatory uncertainty. Yet the health care sector has held up OK and banks have made a very strong comeback in terms of profits.
I believe the causes of the jobless nature of the recovery are unique to the labor market. I hope to blog more about these reasons and to communicate further points from my talk.