So, let me see if I have this right: some group of eggheads back east that fancies itself the arbiter of economics (NBER, which apparently stands for National Bureau of Egghead Research) puts out a news release to the media that the recession is over. And not only is the recession over, it ended 15 months ago, in June of ’09.
Horse puckey. Or, as one economics blogger commented to the L-A Times, “hallucinatory news.”
I don’t know about you, but it occurs to me that these NBER folks who apparently determine if we’re in a recession or not, and when it started and when it ended, would do well to explain to us which planet’s economy they’re measuring, or change their definition of what a recession is. I don’t know what it’s like in your neighborhood, but in mine, June of ’09 was no time for celebration. As I understand it, though, the NBR folks say June ’09 was the bottom of the drop that started in December of ’07. From June of ’09 on, things have been “getting better.”
I’ll believe that when my friend who’s a skilled cabinet maker goes back to full-time work and not just picking up odd jobs here and there. Last time I checked, unemployment was still going UP, and under-employment was still running rampant in the “man-cession.”
Seth Godin, a smart marketing guy whose blog a lot of communications people read, says there are two recessions going on. One is gradually ending – the cyclical recession which we have all the time that comes and goes, which isn’t fun but isn’t permanent. But Godin says the other recession going on is permanent, the one he calls the recession of the industrial age. He observes the “factory” work we did is now being mechanized, outsourced, or eliminated; buyers have easy access to lower prices and many more choices; and thus, the middle class jobs that existed making stuff are gone and not coming back.
Godin says the industrial revolution has given way to the networked revolution, creating a lot of change and a lot of new opportunities, but it’s not going to provide millions of “brain-dead, corner office, follow-the-manual middle class jobs.” Pretty scary talk, but when you look around and see what’s happening at Wolf here in Madison or Harley-Davidson in Milwaukee, with labor agreeing to huge concessions, you know Godin may be onto something.
I guess I’m very much a part of this “networked revolution.” Two years ago, I was doing this, the sort of stuff you’re reading right now, for a company that continues to exist in its present form because its prior generation of ownership and management generated a sizeable fortune, which is now keeping it afloat. In one of my other “jobs”, I gather and report Wisconsin news for a company in Colorado which exists only on the internet. Their “physical plant” is a small office suite in Boulder, not a huge new building full of offices and studios on the west side of Madison.
Godin says the sad irony is that everything we do to prop up the last economy gets in the way of profiting from this new one. I think he’s got a good point there.
I was leading a discussion with a group of community leaders yesterday and said, "because, as you know, the recession is over."
ReplyDeleteThe laughter was beyond expected. It was clear that nobody believes "the man."
What concerns me is that the economists might be right, and that the current economy is as good as it's likely to get. In other words, nine percent unemployment and an ongoing feeling of stagnation might someday be seen as the good old days.
ReplyDeleteWhen times are bad, we are angry and always look to blame someone. The first convenient target will do. That practice, like lashing out by kicking the dog, rewards the guilty and, it should be no surprise, sets us up for more of the same.
ReplyDeleteThe anecdote by “anonymous” illustrates this point. "The man" (presumably a reference to President Obama) did not announce that the recession has ended. He was at pains to say the effects are still with us, and will be for a long time. The Cambridge-based nonprofit think-tank made the announcement.
Eggheads, maybe, but the nonpartisan NBER (National Bureau of Economic Research) has been doing this sort of study at the federal government's behest since 1920.
Measuring the economy is not as precise as, say, splitting atoms, but the process is reliable. If the economy has stopped shrinking (as it apparently did in June, 2009) and started expanding, however modestly, that is, by definition, the end of the recession.
That is not to say happy days are here again. Recovery, which some might describe as a return to the days of the Clinton budget surplus, will be a long time in coming. If, indeed, it ever does. Seth Godin's dismal point is well taken.
What was left, after outsourcing, of the value-producing economy (as differentiated from the leveraged-buyout economy, which created fortunes for the investors but produced no real value) was very badly damaged by the avaricious banking industry, which managed to bring down the housing market and the automobile industry, and savaged the retail sector, and greatly weakened what is left of the American middle class.
"Collateral damage" as the Rumsfeldians would say. But houses and cars and a healthy, gainfully employed middle class are what has long set this country apart from the others and drove the now-departed American Century.
It will take a lot longer to fix this mess than it did to create it, and losing patience with the recovery effort, let alone actively obstructing it, will not speed things favorably along.
Think of the situation as if you had been thrown into a deep hole. The trip down was sickening. The landing was hard and painful. It took you a while to climb back out, and when you did, you were still hurting.
The rising economic tide lifts all yachts.
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