From Friday's New York Times...
The Mutilated Economy
By PAUL KRUGMAN
New York Times OpEd
November 8, 2013
Five years and eleven months have now passed since the U.S. economy entered recession. Officially, that recession ended in the middle of 2009, but nobody would argue that we’ve had anything like a full recovery. Official unemployment remains high, and it would be much higher if so many people hadn’t dropped out of the labor force. Long-term unemployment — the number of people who have been out of work for six months or more — is four times what it was before the recession.
These dry numbers translate into millions of human tragedies — homes lost, careers destroyed, young people who can’t get their lives started. And many people have pleaded all along for policies that put job creation front and center. Their pleas have, however, been drowned out by the voices of conventional prudence. We can’t spend more money on jobs, say these voices, because that would mean more debt. We can’t even hire unemployed workers and put idle savings to work building roads, tunnels, schools. Never mind the short run, we have to think about the future!
The bitter irony, then, is that it turns out that by failing to address unemployment, we have, in fact, been sacrificing the future, too. What passes these days for sound policy is in fact a form of economic self-mutilation, which will cripple America for many years to come….
… the evidence is overwhelming that by failing to respond effectively to mass unemployment — by not even making unemployment a major policy priority — we’ve done ourselves immense long-term damage…
… America will probably spend decades paying for the mistaken priorities of the past few years.
It’s really a terrible story: a tale of self-inflicted harm, made all the worse because it was done in the name of responsibility. And the damage continues as we speak.
And, while Krugman notes that one of the causes of this problem is that the folks in Washington are listening to "the deficit scolds," he's also on record as stating there's much more to it than that.
So, there’s this from yours truly, just a week ago, for all of those thinking about revising history (in the comments)…
Brief Update On The Government Shutdown's Effect Upon America's "Economic Recovery"Krugman also knows you can’t piss on a burning house fire and expect
Thu Oct 31, 2013 at 03:25 AM EDT
Here's a brief overview of jobs and housing with regard to where our country was heading this year, through September 30th (i.e.: through Q3 '13), the day before the government shutdown commenced.
JOBSA Discouraging Picture
By JARED BERNSTEIN
New York Times
October 22, 2013, 11:08 am
...Another weak jobs report has been released, with data on the September labor market.
The report is late because of the shutdown — since when is jobs day a Tuesday? Weird! — but it shows that payrolls were up a scant 148,000 last month, though the unemployment rate ticked down a touch, to 7.2 percent from 7.3 percent (and not because people left the job market, which is why the jobless rate fell in earlier months).
And remember, this report doesn’t count the impact of all those furloughed government employees and other shutdown-related negative impacts from the first half of this month.
The monthly jobs data are notoriously noisy, so let’s take advantage of the fact that we now have data for the first three quarters of the year. We can thus smooth out the bips and bops of monthly changes over three months. That leads to the picture below, showing average monthly payroll gains over each quarter of the year for both the total job market and the private sector...Bernstein continues on to note that, "It’s just a very discouraging picture."
...What’s that? We’re in a recovery? Yes, and have been so for four years. But you just don’t see enough of it in the job market. Unemployment is still highly elevated, and job growth is once again decelerating...."Paychecks are barely beating inflation," he states; but to far too many, even that is spin. (Just ask any fast food restaurant employee--if they're fortunate enough to even have a job--about that ugly reality.)
Bernstein also talks about our record-breaking income inequality and workers not being enabled to obtain their share of corporate growth. Then again, how's that going to happen given the uneven playing field of our corporatocracy? The stock market's hitting record highs now, so why should the rich give a rat's ass about the 99%?
He also discusses our country's overall political dysfunction. That reminds me of what's, possibly--other than the aforementioned record-breaking income inequality--the most dysfunctional indicator of all: our so-called "housing recovery..."
HOUSINGNearly 50% Of All Home Sales Now Cash, As Institutional Investor Activity Hits New HighAs I noted in a post here on September 18th, after our economy crashed in 2008, our government set aside $50 billion to aid distressed homeowners via the originally-established homeowner/mortgage bailout programs that were implemented that year and in 2009.
10/24/2013 @ 5:43PM
Nearly half of all home purchases in the month of September were paid for in cold hard cash, as tight lending conditions continue edge out traditional buyers and investors continue to scoop up inventory.
All-cash deals accounted for 49% of sales across the U.S., according to a new report from RealtyTrac. That’s up from 40% in August and 30% in September of 2012.
“The housing market continues to skew in favor of investors, particularly deep-pocketed institutional investors, and other buyers paying with cash,” says Daren Blomquist, vice president at RealtyTrac...
That amount was then quietly scaled back in Congress to $29.93 billion.
As of today, since 2008, our government has spent a paltry $6.05 billion to aid homeowners with mortgage modifications. Here's a link to more from ProPublica supporting these shameful statistics.
With the government shutdown providing plenty of cannon fodder for Democrats this quarter, it's easy to spin the story of America's 2013 economic fail on Main Street, more than five years after the economy tanked, and to blame "the other guys." So, if I were to conclude this post by stating that our country's economic policies since September '08 have been a horrifying failure that has done little more than lay the groundwork for many years (since, and to come) of tragic waste, I'm sure many would comment that I was just acting out in my typical "Obama-bashing" style. But, the truth is that I don't hate our President. Not one bit. (I voted for him again, just last year.) And, I don't have to make statements like that to get my points across, since these are the exact things that Paul Krugman stated in the NY Times, just a couple of weeks before the entire U.S. economic and political narrative "magically" shifted to the October 1st government
The point here is that you didn't need to be a Nobel Prize-winning economist to realize that our economy was already getting significantly worse, on a quarter-by-quarter basis as this year progressed, at least if you were part of the 93%+/- of the population that had little or no money in our securities markets.
And, the economic prognostications for the next few months leading into the 2014 midterm election cycle don't look very promising either.
But, not to worry, because Democrats have the "spin" on their side; or, so it would appear (if you looked at all the
meaninglesspolls, considering the fact that we're still over a year away from the 2014 general election) if you were to believe everything you read here. And, as we all delude ourselvesknow, the public will believe anything our politicians tell them, because they're held in such high esteem on Main Street, and their credibility is beyond reproach.
Just one question about all of this: If we're supposed to look "forward," as our Party's leaders tell us, then we don't have to worry about the public remembering how bad our economy was immediately before the shutdown. But, what does that say about getting voters to remember the intransigent behavior of the GOP this month, 12 months from now, when they're voting in the midterm general election?
Better corporatists? Muscular neoliberalism? Been there. Done that.
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