They write,

The fact that the United States has pre-crisis levels of output with fewer workers raises doubts as to whether those additional workers were producing very much in the first place. If a business owner fires 10 people and a year later output is almost back to normal, it’s pretty hard to make the argument that they were doing much in the first place.

Read the whole thing. My quibble with the paragraph quoted above is that it fails to incorporate the Garett Jones story. Cowen and Lemke write as if before the recession some workers were just hanging around doing nothing and firms were being nice because times were good. Instead, Jones would say that workers were involved in projects that built organization capital without directly producing output. The recession forced firms to cut back capital projects to try to conserve cash flow, and that meant trimming some of these Garett Jones workers.

Not only did layoffs increase, but hiring slowed down. Again, this represents a low rate of investment. See my previous post on why firms are not fishing in the pool of unemployed workers.

Although I agree with most of Cowen-Lemke, I do not share their pessimistic outlook for the medium run. I think that once momentum picks up, employment growth will be very strong. If they were to make an explicit unemployment rate forecast, I probably would bet the “under,” meaning that I would bet on lower unemployment than they expect two years from now.