Here's a hopeful scenario, suggested by one job seeker:

The post on your blog…about lateral hiring reminds me of a conversation I had a few weeks ago with some of my fellow would-be entry level hires about what might happen in the lateral market over the next few years, given the demand-side weakness in the entry-level market this year. Our theory was that over the next few years there may be an increase in junior lateral hiring from lower-tier schools by upper-tier schools. This is based upon the observations (or beliefs, possibly incorrect) that there are as many or more high-quality candidates on the market this year as in a typical year, but fewer schools hiring, resulting in a stronger pool of talent in the lower tier schools than on the entry level market in the coming years; and that the upper-tier schools will prefer to use scholarly output from the first year or two in a tenure-track position to make decisions about lateral offers vs. using noisier signals from candidates' time in VAPs/fellowships/law school to make entry-level offers.

Of course, this is putting the cart before the horse for those of us who are still hoping for an entry-level offer — but it certainly could affect the thinking of those who either have offers from lower-tier schools or possibly for multi-year fellowships or VAPs and are considering whether to accept such an offer or try again next year. And, more broadly, I think the issue may be of general interest to those who follow hiring trends in the academy. It would be interesting to hear your thoughts on this theory.

It's certainly true that both this year and to some extent last there seemed to be an unusually large number of good candidates who did not secure tenure-track positions, but who would have almost certainly done so in earlier years; this year, in particular, seems to be an especially tight year on the rookie market.  The question, of course, is whether the market for faculty will respond rationally to this phenomenon down the line.   There, I'm less optimistic, and only partly because the market for faculty talent has never shown itself to be especially rational.  I can think of two particular obstacles to the optimistic scenario described by my correspondent:  (1) lateral hiring is more costly and complicated than rookie hiring in most cases, which is a prima facie disincentive for most schools (and especially so in a time of tight budgets etc.); and (2) schools seem much better at projecting their hopes onto the blank slate of rookies with limited records than laterals with more substantial records, where "what you see is what you get."  But perhaps this is too pessimistic assessment.  Signed comments from readers are welcome, though current job seekers may post anonyously (but with a valid e-mail address, which will not appear).