A Darkening Future: Why Growth Still Feels Like a Recession

[Hannah Bell]

Last month, the National Bureau of Economic Research's official business cycle-dating committee told the country that the recession had ended in the second quarter of 2009. This was, undoubtedly, the correct call. The economy is showing positive growth, which is what defines the end of a recession.
However, the growth is so weak coming out of this downturn that it will be invisible to anyone who doesn't spend their life looking at economic data. For most people, this will be a recovery marked by continued high unemployment and near-record rates of home foreclosures. And the politicians' response is to cut people's Social Security benefits.

***Summary****

Baker notes that most of the growth was due to inventory building, & stripping that out gives average growth since the official end of the recession of 1.1%, down to .6% in the last quarter, and that we can't expect inventory to continue fueling growth, meaning unemployment is going to be rising over 10% again & stay there for awhile. Outrageously so, because it's not necessary; jobs can be created by spending to create them.

***End summary****

Unfortunately, the fiscal scolds, the people who were too lost to see the largest financial bubble in the history of the world, are telling us that we have to cut our deficits and tighten out belts.
It is probably worth noting that nearly all of the fiscal scolds earn at least six-figure salaries and many earn in the seven figures. So, we have an amazing sight here. People who earn hundreds of thousands, or even millions, of dollars a year, who have the job of designing economic policy, completely failed on the job.

This can't be emphasized enough. Missing the housing bubble was an act of astounding incompetence...None of these highly-paid, highly-educated people got fired or even missed a promotion. Instead, they are running around telling people earning $20,000-30,000 a year that they have to tighten their belts and accept lower Social Security benefits.

If politics and the media in the United States were not so corrupt, this would have been topic No.1 in the election....So, we have an election based largely on nonsense. People are rightly angry that their lives are being ruined by disastrous economic policy. But they have no idea where to turn. And the latest data tell us that the situation is likely to get much worse in the year ahead.

http://www.counterpunch.org/baker11012010.html

[ixion]

1. Nothing has ended.

Saying that two quarters of anemic growth, due primarily to the government flooding the banks with cash, marks the 'end' of this cycle is short-sighted, at best.

We are in a World of Hurt right now, and we're STILL pretending like we're not.

The longer we pretend, the worse it will be when it all comes crashing down.

The advice I've been giving to people is this: Learn how to grow your own food, and make your own stuff.

Kicked and recommended.

[Hannah Bell]

2. i'll whip myself up a train immediately.

[ixion]

4. groups of people made trains originally

there's no reason why they can't do it now. It doesn't take a government and a multi-national corporation to make a train, or some mode of transport.

If you have a problem with my suggestions, of course, you're under no obligation to pursue them. ;)

[Hannah Bell]

16. yes, they did: but not from scratch. people had developed the underlying skills

and infrastructure to build them.

i think the idea that in a crisis most people are going to be able to survive by "growing their own food & making their own stuff" is unrealistic. about 80% of the population lives in urban areas, for starters, and water infrastructure for a follow-up.

[ixion]

21. large urban areas are ultimately unsustainable, at least given how they're currently engineered

I understand your point, and believe there is merit to it. It doesn't change the fact that the modern day mega-urban area is built on the assumption of unlimited availability, and that is a flawed premise.

[ipaint]

5. No house, no land, no job.

I guess maybe knitting a blanket in my new living room/dining room/kitchen (the back of my truck) will get me through this. I'll get right on it.

[ixion]

6. I can empathize with your situation, having been there myself

And I can understand your sarcasm, to a point. Do you feel it's wrong for people to know how to grow their own food? Seeds are cheap, and you can grow potted plants just about anywhere.

[ipaint]

7. No problem at all other than it does nothing to address the cause leaving untold millions

of non property owners to be sacrificed.

[Dappleganger]

8. +100000

[Hannah Bell]

17. you need seeds, pots, decent soil & a light & water source, & if you think

potted plants in an apartment are going to feed a family, you're dreaming.

infrastructure. the infrastructure that distributes seeds, pots, agricultural knowledge, maintains water sources, etc.

[ixion]

20. that very well may be

but I think if you're waiting for someone else to feed you, that could be a long wait, in some cases.

Suit yourself, though.

[rtw]

22. I agree with preparing

I guess some would rather put their head in the sand and wish things away.

Or, those able could prepare themselves and then put some extra away for those not able to do it.

[xchrom]

3. BP, WMD, housing bubbles, etc-- we live in

The Golden Age of Incompetence.

[blindpig]

9. it ain't incompetence

it is Capitalism, it will always come to this, they can't help it.

[Recursion]

10. Because the "growth" fetish is pointless

We could keep the GDP exactly where it is and everybody in the country could make $52,000 per year.

We have to, some way or another, restructure the economy so that workers participate more in the decisions about what the companies they work for do and whom they pay and how much they pay them.

[thereismore]

12. Who the fuck needs economic growth beyond population growth? And are they a majority? nt

[Recursion]

13. Growth has its good points

Would you rather be poor today or middle class 150 years ago? There's *some* truth to the "rising tides lift all boats" idea; sensible growth allows us to increase our standard of living constantly -- but that growth can't come at the expense of others, which it has done for 20 years at this point.

But it's not the sacred be-all end-all that so many people make it out to be.

[thereismore]

15. True. I was implicitly assuming that the wealth produced today would already be plenty

for every person in America. Looking beyond America, growth might be useful. What sucks is the inequality of wealth in the world. I think there should be more "redistribution of wealth" before there is more growth. I am a democratic socialist, what can I say.

[Hannah Bell]

19. i'd rather be middle class 150 years ago. they lived longer than the poor do today, on average.

and more securely.

[Hannah Bell]

18. capitalists. that's how they make their money; either the economy grows or they need

to take it from others.

usually they do both.

[Recursion]

23. Glaucon made that point in The Republic

If we were all just satisfied with what was obtainable we could all live very comfortably. But the one guy wants better food than other people. Not too long until you wind up in a war.

[mstinamotorcity]

11. As long as we are

giving them our MONEY they will keep taking it out of the system and putting it in their pockets!!!!!!And as long as we patronize the things they set up instead of patronizing us, then we will continue to be in the same shape. Because we keep expecting them to have a heart and throw us a bone when we usually give them the pot roast!!!!!

TOMBStone

[Wounded Bear]

14. The economy is about what to expect.....

if you get a bunch of rich fuckers in a room to design it.