How lost was the past lost decade for the U.S. economy?
So lost that the United States, supposedly home of the globe’s most innovative, flexible workplace, has created barely half as many jobs since 1999 as staid, hidebound Europe.
Jean-Claude Trichet, the president of the European Central Bank, notes the disparity in a speech Monday. Since the euro single currency was created a dozen years ago, Europe has created 14 million jobs – compared with 8 million in the United States (see chart, right).
That’s not to say everything is hunky-dory over there. Joblessness in the euro area is 9.9%, compared with 9.1% in the United States. And that spread could get wider if the debt crisis in Greece, Portugal and Ireland plays out as badly as now looks likely, potentially creating a massive credit crunch on the Continent.
“This is not to suggest that there is time for complacency,” Trichet says. Unemployment “remains much too high, and structural reforms are of the essence to make the euro area economy much more flexible and to elevate its growth potential.”
But then, that’s true here too – even if many in this country continue to place their faith in a private sector recovery that is looking less and less plausible. Time to get ready for another lost decade, if it’s possible to do so.