Good news, everyone: The economic crisis is over!
Kind of. Today's New York Times reports
The United States has emerged from the longest economic contraction since World War II.
The nation's gross domestic product [GDP] expanded at an annual rate of 3.5 percent in the quarter that ended in September, matching its average growth rate of the last 80 years, according to the Commerce Department.
If life still sucks for you: you're still unemployed, depressed, broke, homeless, or scraping by on food stamps, don't worry. You're not alone. In a recent Wall Street Journal/NBC poll, 58 percent of people said they see the country as being on the wrong economic track.
There's always been a weird disconnect between official economic figures like GDP, "third quarter growth," and average citizens' lives. Basically, things can look great on paper, while low and moderate-income people suffer. It's almost like the official record keepers have no idea what life is like for the guy working the graveyard shift in South Side Chicago.
This is not a new problem. Economic indicators like GDP may work swimmingly in lecture hall theories, but they ignore many factors important to the well being of a society, such as health care or life expectancy.
For example, 80 percent of Americans have reported feeling stressed about the economic downturn. The stress affects women the most, who report increases in symptoms like irritability, anger and fatigue. These kinds of economic downturn byproducts have untold consequences on family, workplace, and societal stability.
This stress can also manifest as insomnia. In West Virginia, the AP reports that nearly 1 in 5 West Virginians said they did not get a single good night's sleep in the previous month. For West Virginia, a state that ranks at or near the bottom of the nation in several important measurements of health, including obesity, the insomnia epidemic may have its roots in the economy, says Dr. Ronald Chervin, a University of Michigan sleep disorders expert. Chevin says financial stress and odd-hour work shifts can play roles in sleeplessness.
However, insomnia isn't measured in GDP. This disconnect was large enough to attract the attention of economists like the Nobel laureate Joseph Stiglitz, who is trying to come up with a new, broader definition of prosperity. In an interview with Bloomberg, Stiglitz said:
GDP has increasingly become used as a measure of societal well-being and changes in the structure of the economy and our society have made it an increasingly poor one...So many things that are important to individuals are not included in GDP.
In the model they unveiled, the academics recommend including other factors, such as sustainability and education.
Even the guy who invented the GDP, the late Russian-American economist Simon Kuznets, knew his system had significant shortcomings. He once said, "The welfare of a nation can scarcely be inferred from a measure of national income."
It's true. Fancy lab room words that seemed benign at the time, like "derivatives" and "sub-prime mortgages," had unforeseen, terrible consequences on average citizens' lives. Similarly, the specialized jargon of "GDP" and "third quarter growth" exist on different planets from the rest of us. While the students at the University of Chicago's Department of Economics say one thing, it appears as though the opposite is happening in our backyards -- again.
"The nation's gross domestic product expanded at an annual rate of 3.5 percent in the quarter that ended in September." Fantastic. So what? Does that bring back car-manufacturing jobs from Mexico? Does that mean corporations will now be taxed their fair share?
The official unemployment rate is at a 26-year high, and these statistics don't count people who have been out of work so long that they've given up searching for employment. If we count the "discouraged," as they're so preciously called, it's estimated that 26 million people are out of work.
"The big-picture perspective is that things have improved," said Jan Hatzius, an assistant manager at Wal-Mart.
I'm sorry. I read that wrong. Hatzius is the chief United States economist at Goldman Sachs. I guess things do look pretty sunny over there.
Cross-posted from Allison Kilkenny's blog. Also available on Facebook and Twitter.