Here’s a basically unreadable chart that you should click on in order to be able to see a larger version of:
That’s from Mike Konczal and it shows the ratio of U3 unemployment in November of 2010 to U3 unemployment in November of 2007. And the point is that for the vast majority of states unemployment rose by between 50% and 150% during that period, indicative of a widespread collapse of aggregate demand that’s made it suddenly much less appealing to employ people:
The average is 1.93, and the median is 1.87. So roughly a doubling. So to me Nevada having a higher unemployment isn’t nearly as interesting as why Nebraska has a 4.6% unemployment rate when it used to have a 3% unemployment rate — a 50% increase. Why has North Carolina’s unemployment rate doubled from 4.8% to 9.7%? Yes Nevada is an important story, but it’s clearly an outliner in what is a national trend. They didn’t all have housing bubbles.
There’s a particularly severe problem relating to Nevada and especially to Florida which has a much higher population. Even in a higher AD world, there’d be an important question of what kind of targeted assistance could be provided to people in those areas severely afflicted by overbuilding and the construction downturn. But the widespread and fairly consistent nature of the rise in unemployment shows that thus far we’ve made relatively little progress even on the “easy” issue of below-trend economy-wide spending.