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Chicago, IL
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There is an important aspect of the recovery that often goes overlooked in these debates. The usual arguments, on both sides are relatively valid, so how can we assess the situation? Job growth, compared to the rest of the world has been impressive, and both the housing and stock markets have made remarkable recoveries. Wages are in fact stagnant. Given the low unemployment rate, labor scarcity should drive up wages through competition, but this has not happened yet. There aren't enough entry level jobs for young professionals. This a result of businesses running "lean" for years in order to maintain revenue while reducing payroll. They learned that fewer, higher paid specialists can often out produce inexperienced college grads. The hiring market took a hard swing toward specialized experience, and it hasn't changed course. The labor participation rate is low. This is likely a result of discouraged Baby Boomers taking early retirement rather than return to work. What's missing? Simple; the strength of the US Dollar. The USD is astronomically strong against any basket of currencies. With a strong dollar, exports decline as our goods become more expensive abroad. This barrier hurts overseas profits of multinationals. Despite this pressure, the economy remains strong. The resilient surge of the USD is the single best guage of the strength and staying power of this recovery. The performance of the USD makes it difficult to deny the efficacy of Obama's policies. Charge on!
Toggle Commented Jan 12, 2016 on Paul Krugman: The Obama Boom at Economist's View
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Jan 12, 2016