In a post on Friday, Mike Meeropol wrote that: >>Result: the very basis on which the system was "held together" between 1945 and,say, 1989 is now GONE. The sluggishness of the recovery and the need to maintain unemployment so much higher than in the past and the persistence of the INCREASE in inequality (not just the persistence of inequality) all are part of the long run process.<< I agreed with almost everything in Mike's post. But we have to face the fact that unemployment is currently lower than in the past (though it's rising), at least in the US. Of course, the validity of my statement depends on which "past" we're comparing the present to. But both official U and U augmented by the number of discouraged workers and involuntary part-timers seem to be lower now than during much of the 1980s and early 1990s. Recently, when sketching the Phillips curve for my students, I discovered that at least for the last few years, the "unemployment-inflation trade-off" has improved (meaning less stagflation), using the official unemployment rate. Now I am not trying to praise Clinton or Greenspan or claim that we're having a "soft landing." Au contraire. I think what's happening is that the same amount of (official) unemployment has a larger impact on worker bargaining power than it did in the 1970s. Unemployment insurance benefits are down, as is trade-union strength. Etc. So 5.8% unemployment now looks as bad as (say) 7% fifteen years ago. It's my hypothesis that something similar happened during the late 1920s. Now there's a cheering parallel. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] or [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (daytime, during workweek); FAX: 310/338-1950 "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- K. Marx, paraphrasing Dante A.
