The employment picture is expected to brighten in 2011, but in a rather unconvincing manner.

The big question is whether the long-term unemployed lose their patience, or worse, their marketable skills, before they find a job.

Looks like federal agencies are making it harder for companies to get temporary visas for foreign workers.  And it's creating a burden for firms that can't run their businesses without such employees.

Industries that depend on seasonal workers, agricultural laborers, and professionals such as computer programmers are having a particularly bad time. According to BloombergBusinessweek, for example, H-2B visas for seasonal workers decreased 52 percent last year. And a recent report by the ombudsman at the US Citizenship & Immigration Service found that agency requests for more evidence from companies seeking H1-B visas for programmers and other professional jobs almost doubled in 2009.

I have to disagree with my colleague Steve Taub on this, not because my heart bleeds for jobless, underwater homeowners, but to keep foreclosures from driving home prices ever downward.

Here's the thing: What is the "natural" price that Steve wants the market to find?

Paul Krugman today once again bemoans the lack of Keynesianism in what passes for economic policymaking discussions these days, and I share that complaint.

However, Krugman may be missing part of the problem here, which is that those who pooh-pooh the prospect of deflation may actually not much care if it materializes, though they would be mistaken to do so.

I've avoided rehearsing the on-going debate over the bleak macroeconomic picture, because it quickly descends into endless political back and forth along with the usual name-calling, as my colleague Steve Taub and I have been discussing internally today.  But it's time to make an exception:

Is the private sector not hiring because it fears more aggressive action from the public sector, and so the public sector (read Obama administration) should leave the economy to itself, as those on the right claim? Or is the lack of private sector hiring a reflection of a lack of private sector hiring, and thus a vicious circle and market failure that requires the public sector (read Obama administration) to step in with a serious jobs program involving infrastructure, alternative energy and schools, as those on the left insist?

Not to speak for Steve, but my sense is he tends to agree with the first perspective, at least for the most part, and I can safely report that I agree with the second, and would recommend James Surowiecki's recent column to help make my case if I could find it. Since I can't, suffice it to say Surowiecki made the useful observation that the two sectors where hiring is picking up, banking and health care, are those where the government has taken the most aggressive regulatory action.

There's a political debate heating up about companies' hesitancy to invest the cash they're sitting on.

Essentially, the Democrats--or at least those in favor of further government stimulus measures such as a jobs program or at least extended unemployment benefits--argue that companies are wary of spending because of the lack of aggregate consumer demand.

There's suddenly lots of talk about the possibility of a "double dip" recession, as if the economy had ever really emerged from the last downturn. 

Yves Smith over at Naked Capitalism does a good job of putting the talk in perspective today. In fact, the discussion is ultimately about semantics.

For the tenth month in a row, economic activity in the manufacturing sector expanded, according to the May 2010 Manufacturing ISM Report on Business. In fact, 16 of 18 sectors within manufacturing reported growth, including paper and wood products, as well as electrical equipment and food, beverage and tobacco products.

Several factors fed into the increase. The new orders index was at 65.7, the same as April, but up from 61.5 in March. The employment index inched up to 59.8 in May, the sixth month to show growth. Similarly, both the order backlogs and new export orders indices showed slight increases in May.

A lot of fuss has been made about new Kauffman Foundation research  showing a substantial rise in the number of startups in 2009--the highest rate in 14 years. But what's been left out of the commentary is how those findings compare to an exhaustive Kauffman study disclosed a few months ago. It demonstrated that the number of new firms created in the US over a period of several decades, ending with 2005,  remained fairly constant over time.

The clear implication: The current crisis, with its precipitous increase in unemployment, has caused an unprecedented rise in startup activity. 

If you harbored any doubts about the importance of small businesses to job growth, then you should consider the results of new research looking at payroll data over the past ten years.  The clear conclusion is that the lion's share of employment growth over the long term has happened at  establishments employing fewer than 50 people.

But the implications for our current economic situation are disturbing.