[trevelyan]

As far as I'm aware from the economics blogosphere, arguments about "structural unemployment" are popular these days mostly in right wing think tanks. And they only seem popular there because hypothesizing that there are tons of jobs available for the unemployed permits one to reject Keynesian/Monetarist prescriptions for further fiscal/monetary stimulus.

I haven't run into any serious economist who believes in the idea, and certainly haven't read any proponents of the idea who are able to justify why this rate is allegedly 5-6 percent higher now than two years ago, or at pretty much any previous point in American history for that matter.

I wouldn't mind talking about this if others are interested. To me, the simplest evidence that this argument is dishonest is that its proponents don't seem to be acting consistently with their beliefs. If they really are right that the natural unemployment rate has risen, any further stimulus or monetary expansion will result in significant inflation which will need to be headed off by the Federal Reserve, and which would permit the organization to divest itself of its fairly risky mortgage-backed securities in the process. And this would be a zero-risk way to drive a stake through the heart of pretty much every left-leaning empiricist out there too....

[netcan]

I agree with you that the reason many proponents of structural believe it is that it is consistent with their existing ideas about free markets and such, but that doesn't necessarily discredit it. There were bubbles that popped in finance and construction. This should produce a surplus of labour in these areas that needs to be absorbed.

I'm not an expert, but I don't think that a structural unemployment explanation is necessarily incompatible with with Keynes. Keynes talks about sticky prices disrupting the classical economic reallocation of resources. This would make sense especially for labour. If you need to go from an 80k job in finance to a 40k job in retail, you would probably be very reluctant and meanwhile be unemployed. That's, to the best of my understanding, a structural explanation.

[secret]

"As far as I'm aware from the economics blogosphere, arguments about "structural unemployment" are popular these days mostly in right wing think tanks."

Actually, I heard Bill Clinton talking about the same thing on the Daily Show this past week.

[sayrer]

All mainstream US politicians are fairly right wing.

[blhack]

This is a bit like saying that every city in the US is fairly warm.

Yes, if you compare them to McMurdo Station in Antarctica, they are. Relative to each other, there are warm cities in the US, and cold cities in the US; Minneapolis, while not nearly as cold as McMurdo Station, is cold by US standards.

Similarly, while US politicians may all be "right wing" in comparison to their European equivalents, there are most certainly politicians who, in the relevant context, are not.