Column: Economics of unemployment murky



In short, it took nearly all of us to make this happen.

A growing undercurrent of economists is now warning about structural unemployment (a skills mismatch) that leaves millions without jobs.

This led to a question asked by one online commenter, “How did structural unemployment come about from a housing market collapse?” Good question.

The recent recession wasn’t simply caused by a housing market collapse; it was more than that.

The economic unwinding in which we still live required lots of failures. We needed home buyers willing to suspend belief over unrealistic future price growth, lenders unconcerned with creditworthiness, financial engineers unaware of changing risk profiles, a government backing large mortgage buyers, the Federal Reserve maintaining low interest rates, workers skipping out on higher education to take jobs in construction, and millions of households taking on consumer debt in the belief that their home value would rise forever.

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