GUY RAZ, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Guy Raz.
The economy officially crept out of recession in June 2009. But for many Americans, the more accurate measure is the one that comes out each month from the Labor Department.
And yesterday, the numbers didn't look good. Almost 15 million Americans are out of work, and the private sector isn't hiring. The typical unemployed worker now searches for at least eight months before finding a new job. And for people over 50, a lot longer.
Now, many economists, including Paul Krugman, say there's only one way to tackle the problem: more stimulus. And we'll hear from him in a moment.
But first, to the story of one of those 15 million. Her name is Cyndi Norton. And not too long ago, she worked as an administrative assistant at the Rand Corporation in Southern California.
Ms. CYNDI NORTON: It was a very intense and responsible position, which I really loved. I got to arrange a lot of high-level board meetings with the visiting dignitaries.
RAZ: Including Henry Kissinger, who she even escorted around the building once.
Ms. NORTON: His bodyguards said Mr. Kissinger would like to have access to a private phone.
RAZ: Before the recession hit, Cyndi got married. Her husband had a job in Florida, so she had to quit, and decided to start her own business.
In short order, they got divorced, the business failed, and Cyndi Norton was alone just as the economic crisis hit.
Ms. NORTON: I had a little bit of savings, a little bit of a 401(k), but not a lot.
RAZ: So she had to re-enter the workforce at age 50. She had three decades of experience working admin jobs for big companies. And at first, she didn't think it would take long to get back in. So she decided to return to California to look for work, and even approached an old employer and got an interview.
Ms. NORTON: I'd tried several times to you know, see what the status was. And as I was driving to the airport, I got a call and - very sweet, sweet young lady. And she says, you know, I really want to apologize. The position that you applied for is not a position that we would put you into.
RAZ: That experience has become a recurring pattern, she says.
Ms. NORTON: I may not be young, but I'm bright. I'm extremely energetic, more so than some young people. But see, I've also heard this from other people and I've heard it from younger people, too - saying that they have been instructed by their managers at these recruiting firms, yeah, bring her in, interview her, have her take the test. But for this particular position that we're looking for? They don't want anybody over 30.
RAZ: Today, Cyndi Norton is 52 and officially homeless. She can't afford rent, and relies on friends for a place to sleep. And her story isn't uncommon. People over age 50 who've lost their jobs may have a harder time than others trying to get back in.
Ms. NORTON: I've done everything I possibly can to find work. I've signed up with agencies. I've signed up with temp agencies. I've taken all the tests. I am a nationally certified medical assistant. I tried to retrain and - school loan coming due in December, which I can't pay. Basically, put ads on Craigslist for everything from caretaker to secretary to house sitter to transcriptionist - anything that I can possibly do.
RAZ: There is some evidence to suggest that it may take some time. I mean, you're far too young to qualify for Social Security, Medicare, any of those things. How do you picture the next decade of your life before you start to get closer to being able to get those benefits?
Ms. NORTON: Right now, it's pretty bleak. It's pretty bleak. It's pretty bleak. I'm doing everything I can to be employed. I'm not sitting at home and watching television all hours of the day and night. You know, I'm putting it out there any way that I can. And it's very disheartening, because I know I can do what is required of me.
RAZ: That's Cyndi Norton. She told us her story from KPCC in Pasadena, California.
Now, many economists took flak for failing to anticipate the economic crisis. And Paul Krugman, the Nobel laureate and New York Times columnist, is taking his fellow economists to task again, for not offering solutions.
Mr. PAUL KRUGMAN (Columnist, The New York Times; Nobel Prize Laureate): We should have economists out there saying, here's how we're going to return to full employment. Not just, oh, here's the mistakes we made getting here, or here are the things we need to be worried about. But, you know, we've got a discipline. We're supposed to have answers for things. What is your answer about what we should be doing right now to get ourselves out of this slump?
RAZ: You have a Nobel Prize, a John Bates Clark medal under your belt. What is your answer?
Mr. KRUGMAN: My answer is, a huge dose of both fiscal and monetary stimulus. Basically, use all the tools we have. So we should be having lots of expansionary policy by the Federal Reserve, a lot more fiscal stimulus than the really- massively underpowered measures than we've had so far.
RAZ: Money that will be targeted where?
Mr. KRUGMAN: You know, to a large extent, it's more important that it gets spent somehow than where it gets spent. But we clearly have really big needs in infrastructure. I mean, it's just crazy that we're talking about possibly canceling a much-needed tunnel under the Hudson River, at a time when we have mass unemployment. And those construction workers, if not employed building that tunnel, will not be employed doing anything else.
RAZ: You have talked about this before in your columns, about the need for additional stimulus. But what about politics? I mean, what about the art of the possible?
Mr. KRUGMAN: First of all, economists should talk first about what they think we ought to be doing. They shouldn't restrict themselves to things that are likely to get through Congress. Look, there's only so much you can do in terms of political realism.
If you have a political system, political parties who are determined to block any substantive measure - well, no amount of economic analysis is going to give you a way to solve the unemployment problem without actually spending any money, without actually doing anything.
RAZ: Say, you could do this; you could pass another stimulus bill without any problem. Well, give me a number - how much money?
Mr. KRUGMAN: I would say, it has to be at least as big as the one that was passed at the beginning of 2009.
RAZ: So another 700 billion...
Mr. KRUGMAN: I would probably go for more than that if I could, sure.
RAZ: But if you were to all of a sudden begin pouring hundreds of millions of dollars into the economy, how sure are you that it would have a rapid, clear impact?
Mr. KRUGMAN: Oh, I'm very sure of that. That's not really a question.
RAZ: But how sure are you that it would be sustainable?
Mr. KRUGMAN: I'm mostly sure that would be sustainable. It's really strange to be worrying about a purely hypothetical concern- you know, whether this is sustainable - versus dealing with the clear and present danger, which is incredibly damaging high unemployment.
RAZ: It took more than two years to regain the jobs lost during the 1981, '82 recession, about two and a half years after the '90 to '91 recession, and then about three and a half years after the 2001 recession. Realistically, what are you projecting for this one?
Mr. KRUGMAN: Oh, on current policies, at the current rate, I think that if your best estimate of when we return to anything that feels like full employment is basically never, right? We're just - we're doing a very poor job of creating jobs. But there's nothing that says that just because we start from a difficult position, we could not have a fast recovery. The fault is in our policies, not in ourselves.
RAZ: That's Nobel Prize laureate Paul Krugman, who also writes a column for the New York Times.
Paul Krugman, thank you so much.
Mr. KRUGMAN: Thank you.
RAZ: Now, the idea of stimulus doesn't sit well with all economists. And Peter Smith, an Australian economist, argues that the reason so many of his peers are calling for more stimulus is in large part because so many of them are influenced by the 20th century economist John Maynard Keynes.
Mr. PETER SMITH (Economist): Capitalist economies go into recessions. That's part and parcel of a system that's made us very prosperous. When they go into recessions, forces are unleashed to correct the recession. Prices and costs come down, which make it more viable for forward-looking businesses to invest. The last thing you need in those circumstances is for the government to come in and just be spending all over the place. For a start, they're keeping some prices up that should fall.
RAZ: As you know, many economists here in the United States point to the New Deal as a classic example of Keynesian economics working, that what happens, they say - and Paul Krugman has talked about this - that in 1937, when the Roosevelt administration sort of got religion about tackling deficits, the U.S. went back into recession. It took World War II to get our economy out of it, and that was because the government injected so much money into the economy. Isn't World War II, and the spending involved there, a classic example of Keynesian economics working?
Mr. SMITH: No. It's a classic example of the state basically taking over the economy. Now, you can do that, and you can remove unemployment by doing that. You can have a Chinese kind of system. But in the end result, you'd have a much less prosperous society.
RAZ: So, as we heard earlier, Paul Krugman has criticized other economists in the U.S. for not offering policy prescriptions for how to tackle this unemployment crisis that we face in this country - unemployment that is close to 10 percent. What would your prescription be?
Mr. SMITH: Well, stop the stimulus spending - to the extent it hasn't been done -right away; look to see where there are government regulations that are restricting the ability of business to grow; and remember, the recession was caused by government, with things like the Community Reinvestment Act - brought in by Carter, strengthened by Clinton - which cajole banks into lending money to people who couldn't repay it. And then they had these semi-government organizations, Fannie and Freddie, buying those mortgages.
This is a made-in-government U.S. recession. And the best thing that government can do now is to get out of the way; don't spend wildly; let the private sector recover.
RAZ: That's economist Peter Smith. His article, called "Time to Topple Keynesian Economics," appears in the latest issue of the Australian journal Quadrant.
Peter Smith, thank you so much.
Mr. SMITH: Thanks, Guy.
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