A Demand Shortfall Indeed!

Matt Yglesias takes David Brooks to the woodshed over his shallow analysis of the unemployment picture.

Even when there wasn’t a huge shortfall in aggregate demand, high school dropouts had a very high unemployment rate. That right there is your “structural” unemployment. But then you see this gigantic increase in the unemployment rate for dropouts that precisely coincides with an increase in the unemployment rate for folks with high school diplomas and with an increase in unemployment rate for folks with some college and with an increase in the unemployment rate for people with bachelor’s degrees. That’s right, even folks over the age of 25 with college degrees took the hit at the exact same time. And that is what a shortfall in demand looks like. (emphasis added)

Indeed.