Jobs Day: Tapering Is Still Insane

A blog about business and economics.
Sept. 6 2013 8:51 AM

Jobs Day: Tapering Is Still Insane

For reasons that are a bit unknown to me there was a surge of enthusiasm this week about the likely state of the American labor market, a surge that's been popped by today's mildly disappointing jobs report that shows a continuation of the long-term trend of slow employment growth and barely-there healing of the labor market.

One would hope that this will remind members of the Federal Reserve's Open Market Committee that their months-long dance around the idea of reducing the pace of Quantitative Easing is nuts, was always nuts, and continues to be totally nuts. Real output is weak, has been weak, and shows every sign of continuing to be weak. The labor market recovery is weak, has been weak, and shows every sign of continuing to be weak. Declining labor force participation, stubborn long-term unemployment, and chronic underinvestment by corporate America do permanent and irreparable harm to America's potential for long-term growth. By all means implement tighter monetary policy if that's necessary to prevent inflation from spiraling out of control. But there is no sign whatsoever of any such inflationary spiral.

Advertisement

Monetary policymakers need to stop looking for the exits and seizing on any random bits of good news as a reason for tighter policy. You need to keep easing until really bad news about inflation starts to loom larger than continuing bad news about jobs.


Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Meet the New Bosses

How the Republicans would run the Senate.

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Cheez-Its. Ritz. Triscuits.

Why all cracker names sound alike.

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

The Afghan Town With a Legitimately Good Tourism Pitch

A Futurama Writer on How the Vietnam War Shaped the Series

  News & Politics
Photography
Sept. 21 2014 11:34 PM People’s Climate March in Photos Hundreds of thousands of marchers took to the streets of NYC in the largest climate rally in history.
  Business
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
  Life
Quora
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Tv Club
Sept. 21 2014 1:15 PM The Slate Doctor Who Podcast: Episode 5  A spoiler-filled discussion of "Time Heist."
  Arts
Television
Sept. 21 2014 9:00 PM Attractive People Being Funny While Doing Amusing and Sometimes Romantic Things Don’t dismiss it. Friends was a truly great show.
  Technology
Future Tense
Sept. 21 2014 11:38 PM “Welcome to the War of Tomorrow” How Futurama’s writers depicted asymmetrical warfare.
  Health & Science
Bad Astronomy
Sept. 22 2014 5:30 AM MAVEN Arrives at Mars
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.