At the Economix blog, Laura D’Andrea Tyson says that as some of the world's largest economies try to avoid a double-dip recession, it is important for policy makers to attack the jobs crisis.  And the only way to make progress in fighting the crisis, she argues, is to correctly diagnose the cause:

As one small-business owner told The Los Angeles Times, “If you don’t have the demand, you don’t hire the people.” And the majority of economists agree on this diagnosis. They also agree that the recovery from a balance-sheet recession can be agonizingly long, with significantly slower growth and a significantly higher unemployment rate for at least a decade.

Recent data indicate that the United States is on such a course, and many economists are now drawing comparisons between it and Japan during the two “lost decades” following Japan’s 1989-90 financial crisis and ensuing balance-sheet recession.

A recent study by the economist Robert Gordon confirmed that the shortfall in private-sector demand, especially the demand for consumer services, residential and commercial construction, and consumer durables, is the primary cause of shortfalls in production and jobs.

Read Recovering From a Balance-Sheet Recession here.