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    there are, after all, trees in that forest..., 2010-12-16 14:50:16 | Main | "that's what the big army calls the little army", or, atque, ubi solitudinem faciunt, pacem appellant, Catholic Edition..., 2011-01-03 01:35:35

    less skills mismatch than misplaced workers:

    About two years ago I mentioned that inconsistencies in labor market data suggesting that lower demand for employment or structural unemployment due to skills mismatch are responsible for the high unemployment rate are intuitively consistent with the increased labor immobility due to 10 million or so underwater mortgages affecting 16 or so million workers, coincidentally the same number as are unemployed. The argument that increased labor immobility is responsible for said labor market aberrations also comes with the added benefit of having any evidence at all to support it, unlike, say, some imaginary lack of skilled labor.

    Rather than simply presume that just because as many Americans are underwater as there are unemployed that there must be some significant overlap of unemployed Americans unable to move for a new job because they are underwater on their mortgage, one might run numbers, but due to a skills mismatch I wasn't going to. Via Mike Konczal's response to an awful bit of reporting by Reuters' Nick Carey, here's one study that suggests some 30% of the increased rate in unemployment during this recession has been due to the Obama administration's broken promise to support mortgage cramdowns. The International Monetary Fund estimates nearly the same figure.

    It's a very hopeless situation. We elected the candidate who supported the creation of a legal recourse for underwater borrowers to get back in the boat without facing the senseless, hypocritical opprobrium and moral indignation of the dominant culture - nevermind the credit rating agencies - for home owners who sensibly walk away from the ponzi scheme. He carried out his mandate by quickly ditching the plan in favor of stringing them along instead, and that's probably cost a couple million jobs. Obama earned his shellacking.


:: posted by buermann @ 2010-12-17 13:41:47 CST | link





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