Tyler Cowen had a typically good post about inflation yesterday. The part I want to highlight though relates to his comments about unemployment and stimulating aggregate demand:

There is an asymmetry between layoffs and rehires.  If an economy starts heading into recession, robust aggregate demand may limit the number of layoffs.  But once those workers are laid off, robust aggregate demand won’t necessarily lead to their rehiring.  The employer already has figured out how to do without those workers and the production process has “moved on,” so to speak.  Few employers are looking to recreate the status quo ex ante.

Something to keep in mind the next time that you hear a speech about stimulus and getting people back to work.

Also a good lesson in how deep a problem we are in with regard to jobs in America. We’ve got ourselves in a real pickle and it’s going to be a long nasty climb out of the hole.