In a NYT article Robert Shiller laments the fact that fiscal policy will not come to the aid of the unemployed:
THE failure of the Congressional supercommittee to come up with any agreement on the budget deficit makes it even less likely that Congress will rise above its partisan divisions and act on behalf of the millions of out-of-work Americans.
Yet without government intervention, we may well have high unemployment and social discord for years to come. How did this disaster happen?
Probably the most important reasons for the failure to rescue the unemployed are intellectual, rather than purely political. First, there is a lack of scientific proof that government spending — fiscal stimulus — will do much to remedy unemployment. Second, there is a lack of appreciation of the human impact and social consequences of high, long-term joblessness.
Amazing that in a 1000 word essay dealing with the “Great Recession” induced hardship, the words money or monetary policy are not mentioned at all!
But let´s see. Do you think employment would have taken this plunge
If NGDP had not nose-dived
Due to the fact that monetary policy went haywire?
If so, maybe Shiller wouldn´t have had to remind us of Thomas Jefferson´s prediction:
The stakes are very high here, and they are not just economic. As anger rises in today’s economy, I’m reminded of Thomas Jefferson’s words about the danger of “angry passions” arising between the North and South over the question of extending slavery to the Missouri territory. In an 1820 letter, he wrote that “this momentous question, like a fire bell in the night, awakened and filled me with terror.” He went on to predict, from his observations of such rancor, the secession of the South that was to come 40 years later.