Today's Washington Post ends a story on how the recession is ending with the following paragraph.
"Even as the nation starts producing more goods and services, though, the joblessness is expected to continue rising--both because the expansion is expected to be weak initially and because businesses are behaving with extreme caution, making them reluctant to hire even if they do see rising demand for their products."
That sentence is so wrong headed, it is hard to know where to start. First of all, the idea that the nation is producing more goods and services is based on a distortion of the facts, e.g., they left out automobiles and aircraft to get a tiny positive number. Add those two factors back in and the drop in production is substantial.
Next, the next expansion, whether weak or strong, cannot begin with ever increasing unemployment. Fifteen million unemployed with benefits expiring will never produce the improving confidence in the future needed to end a contraction.
There won't be any increase in demand until people have jobs and confidence in the future. Period. Neil Irwin, the Washington Post Staff Writer responsible for this silliness obviously has not read our book, The Great Recession Conspiracy.