There’s an interesting discussion amongst economists like Dean Baker and Paul Krugman about whether the U.S. labor market woes are structural or cyclical. The latest flare-up involved a PBS segment about last week’s labor report where such things as robots taking away middle class jobs in the U.S. was offered by those of a different political persuasion as reasons why we shouldn’t expect all that much from the U.S. economy anymore.
This is an important question since it directly relates to the theory that “lack of aggregate demand” is the proximate cause of our economic troubles and it has a direct impact on fiscal and monetary policy (i.e., if labor market woes are just temporary, then help from the government and the Fed makes sense, but, if we’ll never see a 5 percent unemployment rate again, then we’re just growing the debt and blowing dangerous bubbles for no reason).
Anyway, I didn’t read through all the material such as this referenced study(.pdf) by Republican Ed Lazear that argues our troubles are cyclical, but I did search on the words credit and debt in all three links above and (surprise!) there was nary a mention.
Apparently, the end of an unprecedented, multi-decade expansion of credit at all levels – personal, business, and government – doesn’t qualify as a structural change.