America Today Versus Britain Under Thatcher

In his column today Krugman argues that current unemployment isn't structural. He clarifies, at his blog, that he has no problem with the idea of structural unemployment in general. For instance, Krugman agrees that "it was quite clear, circa 1990, that Britain was no longer capable of running unemployment rates as low as those of the 1960s and early 1970s":

[In Britian there] were obviously declining industries steel, coal, shipbuilding coupled with rising service and financial sectors. Times were terrible for blue-collar workers, not so much for white-collar. ... [T]he key insight about America now is that it doesn’t look at all like Thatcherite Britain. Legend aside, this is not mainly about displaced construction workers and there are no other dying industries to point to. Lousy labor markets span the country, except in a handful of states with almost no people. It’s a terrible job situation for college graduates as well as high-school graduates.

Avent disagrees somewhat.