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There is no shortage of strong writing on unemployment figures these days. Or, for that matter, projections. Nouriel Roubini , for one, is projecting things to get worse: Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more. The weakness in labor markets and the sharp fall in labor income ensure a weak recovery of private consumption and an anemic recovery of the economy, and increases the risk of a double dip recession. As a result of these terribly weak labor markets, we can expect weak recovery of consumption and economic growth; larger budget deficits; greater delinquencies in residential and commercial real estate and greater fall in home and commercial real estate prices; greater losses for banks and financial institutions on residential and commercial real estate mortgages, and in credit cards, auto loans and student loans and thus a greater rate of failures of banks; and greater protectionist pressures. The damage will be extensive and severe unless bold policy action is undertaken now. But Daniel Gross has an interesting take at his Moneybox column for Slate . He agrees that "before things get better, they have to get worse more slowly." But he looked at the third quarter productivity numbers from the Bureau of Labor Statistics and saw some hope: In the third quarter, productivity —econospeak for companies doing more work with the same amount of labor—rose at a 9.5 percent annual rate. We've just witnessed the fastest two-quarter productivity surge since the first year of the Kennedy administration. Economists can read these omens the way Roman priests read chicken entrails. And here's one of their explanations: Just as investors and businesspeople don't believe things could ever go wrong at the peak of the boom, they have difficulty imagining things can get better at the trough of the bust. And so they respond to rising demand not by hiring new employees but by coaxing existing employees to work harder. But just as hamsters can run only so fast on their treadmills, there are limits to productivity growth. "If you look at economies over many centuries, you can't grow productivity for 7 or 9 percent for more than two or three quarters," said Lakshman Achuthan, managing director at New York-based Economic Cycle Research Institute , whose leading employment indicators are looking up. "At a certain point, people will start to collapse at work." Should the economy expand in the fourth quarter at the same 3.5 percent annual rate it did in the third quarter—as it shows every sign of doing—companies won't have any choice but to hire, says Michael Darda , chief economist at MKM Partners. "There's an outside chance we could see job growth by the end of the year." Read Coming Soon: Jobs! here .

Brad DeLong has been sharply critical of politicians(and members of the media, and some fellow economists). And if he ran the country, he would have done things differently than those in power over the last couple of years. For example, he writes at Project Syndicate and on his blog , he would have let Lehman Brothers and AIG fail. And he would have nationalized Fannie Mae and Freddie Mac. But even as he disagrees with those moves taken or not taken, he gives the Bush and Obama Administrations passing grades for their work in economic policy over the last 30 months: Thus it is worth stepping back and asking: What would the economy look like today if policymakers had acceded to the populist demand of no support to the bankers? What would the economy look like today if Congressional Republican opposition to the Troubled Asset Relief Program (TARP) program had won the day? What would the economy have looked like today had Senators Nelson, Snowe, and company done to Obama's discretionary deficit-spending plan what their predecessors did to Clinton's in 1993 and blocked it? The only point of reference is the Great Depression itself. That is the only time in more than a century when (a) a financial crisis caused a widespread, lengthy, and prolonged reinforcing chain of bank failures, and (b) the government by and large washed its hands--neither intervened on a large scale itself nor passed the baton to a consortium of private banks (usually, in the U.S., headed by Morgan) to support the system as a whole. It is now 19 months after Bear Stearns failed and was taken over by JP MorganChase, with the assistance of up to $30 billion of Federal Reserve money on March 16, 2008. Industrial production now stands 14% below its peak in 2007. By contrast, 19 months after the Bank of United States, with 450,000 depositors, failed on December 11, 1930 – the first major bank collapse in New York since the Knickerbocker Trust failure during the panic and depression of 1907 – industrial production, according to the Federal Reserve index, was 54% below its 1929 peak. Read What Would Have Happened If World Governments Had Washed Their Hands of the Financial Crisis? here .

The Obama Administration has been writing the narrative for economic news coverage since Inauguration Day, according to the Pew Project for Excellence in Journalism . The PEJ analyzed coverage from February 1 through July 3 and found that government action was the impetus for nearly half the stories--49% to be exact. The media "triggered" 23% of stories themselves through investigative pieces, interviews, or other types of stories. Businesses drove the story line almost as often as the media themselves--triggering 21% of the stories. The government led the way even more during February and March, with all the stimulus package and TARP stories dominating the news. The report shows a media that was responding to events more than seeking out root causes and leading investigations. From the report: The study also sheds some light on the question of how aggressive and proactive the press itself was in covering the economy story. Overall, about one-fifth of the economic stories were triggered primarily by the initiative of journalists. But the degree of media enterprise varied notably depending on the topic—and the bigger topics tended to have less press enterprise while the smaller ones had more. When it came to the biggest economic storylines, the media were more reactive. In coverage of the banking sector problems, for instance, press enterprise and investigations triggered only 14% of stories, and on stimulus coverage, 15%. The media were more pro-active in monitoring the housing crisis (23%) and quite aggressive when it came to covering the unemployment picture, with press enterprise and investigation accounting for 35% of the triggers. And in one significant storyline, the crisis’ impact on ordinary citizens, press enterprise proved to be the trigger for more than half (54%) of the stories. Among the other findings by the PEJ report: -Three storylines have dominated: efforts to help revive the banking sector, the battle over the stimulus package and the struggles of the U.S. auto industry. Together they accounted for nearly 40% of the economic coverage from February 1 through August 31. Other topics related to the crisis have been covered much less. As an example, all the reporting of retail sales, food prices, the impact of the crisis on Social Security and Medicare, its effect on education and the implications for health care combined accounted for just over 2% of all the economic coverage -Fully 76% of the datelines on economic stories studied during the first five months of the Obama presidency were New York (44%) or metro Washington D.C. (32%). Only about one-fifth (21%) of the stories originated in any other city in the U.S., and about a quarter of those emanated from two other major media centers: Atlanta and Los Angeles. -Once the economic situation showed some signs of improvement—and the political fights over legislative action subsided—media coverage began to diminish. After accounting for 46% of the overall news coverage in February and March, for instance, coverage of the economic crisis dropped by more than half (to 21% of the newshole studied) from April through June. And in July and August, it fell even further (to 16%). The clearest example came in cable news. Once the political battles subsided, coverage fell by about two-thirds from March to April. You can read the full report here .

Joseph Stiglitz says the federal government needs to spend more money (on infrastructure, schools, and elsewhere). And if he were president, he would work to restructure "large parts of the economy," and bring them up-to-date with the economics of the Twenty-First Century, rather than allowing them to keep following "Nineteenth Century economic principles." Those are among the ideas he shares with The New Yorker's James Surowiecki in this interview:

Council of Economics Advisers chair Christina Romer was Tom Ashbrook 's guest today On Point . Ashbrook was asking Romer and listeners whether it is time for a second stimulus package. Romer wouldn't commit to a clear yes or no. For example: TOM ASHBROOK: What would it take for you to say, “You know what, we tried, but it wasn’t enough, it’s time to pull the trigger”? 10.5 percent unemployment? 11 percent unemployment? What would it take for you to advise that? CHRISTINA ROMER: I think the crucial thing is: What’s the direction that we’re moving in, right? So one of the things that, you know, I think people have forgotten is just what the economy — I’m sure they haven’t forgotten — what the economy was like in December and January. We were truly an economy in freefall. And I think one of the things we’ve been seeing is moderating conditions. We’ve started to see some of those leading indicators, like building permits, orders for durable goods — those kind of things that tend to turn around before the actual economy turns around. You know, what I’m going to be looking at is, Are we on the right path? And certainly we do have to give the stimulus the time to have an effect. Simply because we do know we’re getting a lot more money out the door in the next several months, and we’ll be getting a read on, Is that doing what we think it should be doing? The interview is worth a listen, and while Romer doesn't say yes or no to a Stimulus II, she doesn't run away from the issues. Take a listen here .

Christina Romer , chair of the President's Council of Economic Advisers, has a guest article in the latest Economist. Romer, who has been bullish on the Obama Administration's economic recovery plan, writes that we need to look back to 1937 to understand why, in her view, the stimulus spending is the right antidote for this recession. During FDR's first four years in office, the economy rebounded from the Depression in "rapid" fashion--"annual GDP growth averaged 9%." Unemployment dropped significantly in that period. But come 1937, unemployment surged (see chart at right from the Economist), as the country went into a deeper downturn. Romer: ...The fundamental cause of this second recession was an unfortunate, and largely inadvertent, switch to contractionary fiscal and monetary policy. One source of the growth in 1936 was that Congress had overridden Mr Roosevelt’s veto and passed a large bonus for veterans of the first world war. In 1937, this fiscal stimulus disappeared. In addition, social-security taxes were collected for the first time. These factors reduced the deficit by roughly 2.5% of GDP, exerting significant contractionary pressure. Also important was an accidental switch to contractionary monetary policy. In 1936 the Federal Reserve began to worry about its “exit strategy”. After several years of relatively loose monetary policy, American banks were holding large quantities of reserves in excess of their legislated requirements. Monetary policymakers feared these excess reserves would make it difficult to tighten if inflation developed or if “speculative excess” began again on Wall Street. In July 1936 the Fed’s board of governors stated that existing excess reserves could “create an injurious credit expansion” and that it had “decided to lock up” those excess reserves “as a measure of prevention”. The Fed then doubled reserve requirements in a series of steps. Unfortunately it turned out that banks, still nervous after the financial panics of the early 1930s, wanted to hold excess reserves as a cushion. When that excess was legislated away, they scrambled to replace it by reducing lending. According to a classic study of the Depression by Milton Friedman and Anna Schwartz, the resulting monetary contraction was a central cause of the 1937-38 recession. Red the full article here .

Vice President Biden released his Quarterly Report to the President on Progress Implementing the American Recovery and Reinvestment Act of 2009 --a.k.a. an update on the stimulus package. The Vice President put a heavy emphasis on jobs "created or saved." So far, according to the report, the stimulus plan has created or saved 150,000 jobs in 77 days, and Biden expects another 600,000 jobs to be created or saved in the next 100 days. Health and Human Services and the Education Department have received the most in government outlays from the stimulus plan: The Biden report also emphasizes that states made good use of the provision allowing them to draw down Medical Assistance (of FMAP) funds. All told, states drew down $15.7 billion of FMAP funds and that "has allowed them to avoid further cuts in budgets that were already under serious strain," the report states. Here is the state by state breakdown: You can read the full report here .

The Congressional Budget Office has released its estimate of the economic effects of the American Recovery and Reinvestment Act, (aka the stimulus plan). CBO director Douglas Elmendorf points out that any efforts to provide helpful estimates are hamstrung by the fact that "large fiscal stimulus is rarely attempted." The CBO's estimates show some short run benefits, but little effect in the long run. The above chart shows a small negative effect in the long run, as the CBO estimates "legislation will reduce output slightly in the long run." Elmendorf explains in his report: The principal channel for that effect, which would also arise from other proposals to provide short-term economic stimulus by increasing government spending or reducing revenues, is that the law will result in an increase in government debt. To the extent that people hold their wealth as government bonds rather than in a form that can be used to finance private investment, the increased debt will tend to reduce the stock of productive private capital. In economic parlance, the debt will "crowd out" private investment. (Crowding out is unlikely to occur in the short run under current conditions, because most firms are lowering investment in response to reduced demand, which stimulus can offset in part.) CBO's basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollar's worth of private domestic capital (with the remainder of the rise in debt offset by increases in private saving and inflows of foreign capital). Because of uncertainty about the degree of crowding out, however, CBO has incorporated both more and less crowding out into its range of estimates of the long-run effects of the stimulus legislation. Read the full report here .