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Sunday, July 26, 2009

Good news everybody!

Newsweek announces in no uncertain terms:
The Recession is Over
The reasoning is:
Home sales, while still far below the levels of a year ago, have risen for three straight months—a first since 2004. The stock market has rallied 44 percent since March, thanks to renewed optimism and improving earnings from big companies like Goldman Sachs and Apple. In June, seven of the 10 indicators in the Conference Board Leading Economic Index pointed upward, including manufacturing hours worked and unemployment claims. Macroeconomic Advisers, the St. Louis–based consulting firm, says the economy is expanding at a 2.5 percent annual rate in the current quarter. Economic activity "will increase slightly over the remainder of 2009," Federal Reserve chairman Ben Bernanke told Congress.
That's not a whole lot. Home sales are low and to say that the stock market and Goldman Sachs are doing well hardly means things are okay in the broader economy.

The article admits that unemployment will be high (and higher) and that whatever recovery we see will be anemic.

Here's the deal: For most Americans, the last decade did not deliver good wage growth. Thus, the borrowing and the resulting asset bubble (in houses). Because this country is not protecting against low-wage labor overseas, and without some sort of European social-insurance/redistributionist policy, the United States labor pool is going to feel the heat from workers in India and China, and that means stagnating or declining wages for two or three decades. Which will certainly feel like and endless recession.

In case you are wondering, the Newsweek essay pegs the recovery on:
  • The Obama stimulus plan
  • Green/alternative-energy
  • Broadband (!) which up until til now has hastened job outsourcing.
  • Electronic health records
That's not much. It's nothing like the tech boom of the 1990's (before the insane dot-com bubble). It's not like post-WW2 industrialization. The Newsweek article is overly optimistic.

OF NOTE: It took 5 writers to come up with the 3,477 word essay. Daniel Gross and four assistants. That's productivity!



7 comments

Suggestion: the number of writers required to write such an article is directly proportional to the resistance offered to propaganda by reality.

By Blogger nash, at 7/26/2009 9:42 AM  

am i remembering correctly? does the financial sector account for 40% of the economy?

By Anonymous Anonymous, at 7/26/2009 2:10 PM  

Home sales...have risen [from the worst figures in living memory].
The stock market has rallied [above the worst drop in over 70 years]

By Blogger JeffKw, at 7/26/2009 4:23 PM  

nash is dead on with his suggestion. take a look at the propaganda and shilling the ass - ociated press spews - same with that cheerleading outfit. jeebus.

By Anonymous Anonymous, at 7/26/2009 5:29 PM  

For god's sake. The stimulus is a drag on consumer confidence. Alternative energy is expensive energy. More broadband currently exists than people know what to do with, and electronic health records are about making sure people don't exceed their health care rationing, which is going to harm the average national health.

This is why Newsweek is more of a liberal freak show than a newsmagazine.

By Anonymous Anonymous, at 7/26/2009 9:19 PM  

anonymous wrote, and electronic health records are about making sure people don't exceed their health care rationing, which is going to harm the average national health.

LOL!

Uh huh. Sure.

By Anonymous Anonymous, at 7/27/2009 11:05 AM  

More broadband currently exists than people know what to do with ...

horseshit.

cannot get dsl to the house ( too far from at&t hub ) cannot afford cable cannot afford satellite cannot afford wireless

seriously wtf r u spewing about ???

i do not have broadband in any way shape or form.

i do have a library card and the library has excellent wifi.

By Anonymous Anonymous, at 7/27/2009 3:23 PM  

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