Recession -- Who Cares?

The soothsayers have slaughtered the ox and are examining the gloppy entrails for signs: Rising unemployment, a falling dollar, weak consumer spending, the credit crisis, a swooning stock market. Could there be something wrong here? Could we actually be approaching a, god forbid, recession?

To which the only sane response is: Who cares? According to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical -- or at least the newspapers' standard -- definition of a recession, which specifies that there must be at least two consecutive quarters of negative growth in the GDP. But most of the public employs the more colloquial definition of a recession, which is hard times. If hard times have already fallen on a majority of Americans, then "recession" doesn't seem to be a very useful term anymore.

The economists' odd fixation on growth as a measure of economic well-being puts them in a parallel universe of their own. WorldMoneyWatch's website tells us that, for example, that "The GDP growth rate is the most important indicator of economic health. If GDP is growing, so will business, jobs and personal income." And the latest issue of US News and World Report advises, "The key... for America is to keep its economy growing as fast as possible without triggering inflation."

But hellooo, we've had brisk growth for the last few years, as the president always likes to remind us, only without those promised increases in personal income, at least not for the middle class. Growth, some of the economists are conceding in perplexity, has been "de-coupled" from mass prosperity.

Growth is not the only economic indicator that has let us down recently. In the last five years, America's briskly rising productivity has been the envy of much of the world. But at the same time, real wages have actually declined. It's not supposed to be this way, of course. Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently.

And what about the unemployment rate? The old liberal faith was that "full employment" would create a workers' paradise, with higher wages and enhanced bargaining power for the little guy and gal. But we've had nearly full employment, or at least an unemployment rate of under five percent, for years now, again, without the predicted gains. What the old liberals weren't counting on was a depressed minimum wage, impotent unions, and a witch's brew of management strategies to hold wages and salaries down.

Now if those great and solemn economic indicators -- growth, productivity and employment rates -- have become de-coupled from most people's lived experience, then there's something wrong with the economists, the economy, or both. The clue lies in the word "most." We have become so unequal as a nation that we increasingly occupy two different economies -- one for the rich and one for everyone else -- and the latter has been in a recession, if not a depression, for a long, long time. Not all economists can bring themselves to admit this.

I suspect that America's fabulous growth in productivity is another illustration of the disconnect between economic measures and human experience. It's been attributed to better education and technological advances, which would be nice to believe in. But a revealing 2001 study by McKinsey also credited America's productivity growth to "managerial innovations" and cited Wal-Mart as a model performer, meaning that we are also looking at fiendish schemes to extract more work for less pay. Yes, you can generate more output per apparent hour of work by falsifying time records, speeding up assembly lines, doubling workloads, and cutting back on breaks. Productivity may look good from the top, but at the middle and the bottom it can feel a lot like pain.

When employees are squeezed hard enough, then you have the possibility of a genuine recession as technically defined. People buy less, so growth declines, to the point where even the economic over-class has to sit up and take notice. This is happening in Japan, where a recent Wall Street Journal headline announces: "Growing Reliance on Temps Holds Back Japan's Rebound: Firms Increasingly Add Part-Time Workers; Spending Power Lags." The U.S., where consumer spending accounts for 70 percent of the economy compared to a little more than half in Japan, is even more vulnerable to a downturn in personal consumption.

What is this fixation on growth anyway? As a general rule of biological survival, any creature or entity that depends on perpetual growth is well worth avoiding, lest you be eaten alive. As Bill McKibben argues in his book Deep Economy, the "cult of growth" has led to global warming, ghastly levels of pollution, and diminishing resources. Tumors grow, at least until they kill their hosts; economies ought to be sustainable.

Apocalypse aside, the mantra of growth has deceived us for far too long. What it translates into is: Don't worry about the relative size of your slice, just concentrate on growing the pie! Now, with a recession threatening even more suffering for those who are already struggling, may be the perfect time to get out the pie-cutter again. Too bad that the one leading Democratic candidate who promises to do so now appears to be on the ropes.

Comments

[not one of the sheep]

Oh for the days of Carter! There was a real recession! Cruching taxes, lines at the fuel pump, skyrocking interest rates, and double digit unemployment! Only the repealing of those socially and economically liberal policies brought us back from the brink. Reagan, Bush, Clinton, and Jr. all understood that far left of right policies were devestating. Now we are faced with the return to Carter policies and worse! Those who do not learn from the past are doomed to repeat it. Guess one time wasn't enough. The problem that none of the candidates possess any common sense and will be the candidate for all of the people instead of bought, packaged and paid for by special interest groups. Change for change sake is bad, there must be some common sense plan to implement good change. Haven't seen any from either side yet!

[Jane22]

This result is a case of the Shock Doctrine applied to America. If you disagree, you had better read the book! We must look much deeper to find the currents in America. It is being obfuscated by all sectors of our own society. The constant press in this election is misdirecting our attention from the facts. Check this book out if you do not believe me. This is a case of bringing the Milton Friedman style "shock" to bear in a only partially functioning "democracy". Pay attention, people!Read this book--NOW! PEACE, J22

[not one of the sheep]

Oh for the days of Carter! Gas lines, 18% + interest on loans, global embarrassment, crushing taxes. Let's vote for change to the old failed policies of the past.

[jazzman]

There is something very obvious and simple about the perceptions of the economy that is rarely talked about. It is that the profits of corporations and the economic well being of workers has been uncoupled. It is very possible that a corporation can be jacking up profits by manufacturing in China and servicing in India while laid off workers take jobs in channel stores for $7.25 an hour. Thus the well being of the corporation isn't lifting all boats. In many cases, the opposite is true.

In the case of our present health insurance the more Insurance companys deny care the more profits they make while the person needing health care gets less care. The whole system is screwed up and until politicians start thinking outside the box in terms of economic health we're going to continue to see the mess grow.

One thing for certain: Status quo Hillary and McCain plus every other Republican candidate are not going to change anything.

[IMORPHEUS]

I think this will be a time of reckoning in our nation -

I just viewed an amazing documentary entitled "The End Of Suburbia" which details the entire history of suburban development and planning and how so much of our way of life and our level of consumption, with this model for living, is co-dependent on our access to an abundant source of CHEAP ENERGY - primarily oil.

So much of what we're going through right now is a result of those in power and wealthy elites, recognizing quite some time ago, that this current model for our existence has become all but extinct. We're now just going through the motions and any effort to stem the tide, is being done to avoid telling the American people, the hard unavoidable truth:

The world's access(Not just the U.S.) to cheap affordable oil, is nearing a dramatic end. This means our economic model(unfettered international capitalism) and our suburban lifestyle has become unsustainable - it has essentially become obsolete. We just haven't been informed, by those in the know.

Even with dramatic increases in renewable fuels these sources will not meet the 25percent threshold in alternative fuels needed to make up the difference. And the cost of such alternatives like Hydrogen and Nuclear Power, -fuel costs needed to make fuel- do not provide the net fuel increase, that's needed.

We need to alter our way of life! Reduce consumption - increase conservation- return to local modes of inter-action that our ancestors used -sharing resources within local communities with our neighbors; Actually COMMUNICATE with our neighbors instead of utilizing this method here - which really is a poor substitute for real human inter-action.

And we'll need more ecologically sound methods of urban planning and food production.

It doesn't have to be the apocalyptic vision that some will suggest it is.

I prefer to see it as a 'return to Eden'...us relying on our own ingenuity rather than depending on these soul-less politicians and these empty suited talking heads.

[Purple Girl]

Michigan the Canary in the Coal mine. We are all sufering (and have been for about 35 yrs) in a recessions Reason....
Our politicians have catered to the auto inducstry- foresaking all others.
the auto industry was kissing up to the US Oil industry, who inturn was (IS) Blowing th eMiddle East Oil Regimes.
Regardless of of great Universities (U of M, MI State, Wayne State...) we have no other viable industry except what th eauto industry can use. We have not pushed small business, Agriculture, BioTech, not even FUEL EFFECIENCY -Big surprise. so here we are fucked again - we've been wallowing in this cesspool since th efirst 'oil' crisis, and nothing has been done to change it.
So this year- out with the Old- Carl,Debbie even Jen- Imcumbants Beware in MI. We have experience with your type os 'experience' for far too long!
Don't think for a minute this Circle Jerk hasn't or won't be coming to a theatre near you very soon too.

[mmckinl]

We need a New Economic Model

Of course Barbara is talking about our existing economy which, we know, will be obsolete. The question is what will replace it ...

What is growth? Currently growth is measured in money. The current model is based on goods and services but does not take into account external costs. External costs are those that are detrimental to the environment, society or the individual. Smoke from a factory causing asthma in children, mine runoff that pollutes biosystems and drinking water downstream or toxic materials from our refuse that we export to other countries.­Society suffers crime, disease, mental illlness and other maladies very often caused by the neglect of resourses for personal well being or education . Growth has to be measured by the degree of benefit measured against the price of external costs for the environment and everything in it , including ourselves and those who folllow.

Japan proves to be an interesting case. Barbara and the Wall Street Journal get it wrong. Japan is in perpetual stagnation because the population is declining and its markets are being contested. Consumer capitalism needs more and more consumers and more and more markets to perpetuate itself or it withers and dies, as is Japan.

And therein lies the problem. Consumer Capitalism's dirty little secret is that unless it constantly expands it dies and that is antithetical to what we have discovered about the enviroment and the atmosphere, that they are finite, and that mining, forestry, manufacturing and refuse cannot be forever thrust upon them without dire consequences to the economy and the very survival of civilization itself.

We need an economy based on sustainability. Without it the human population will be 'right sized' through warfare, starvation, disease, pestulence or a combination thereof. It is only a matter of time and time is getting short. Which road do we take, ever more consumption or sustainability?

[aigeanta]

I'd like to point out two things. First, the unemployment numbers have been inaccurate for some time, since they stopped counting "discouraged workers", ie ones that have stopped looking for work. Secondly, the inflation numbers haven't reflected food or gas for some time. They fixed the numbers to make the economy look good, but all the while we knew appearances were deceiving.­..

[mbaty]

Exactly. What do we care if the economy is faltering? We've been scraping by for a while, and now people are getting all worked up because house prices are falling, even though we haven't been able to afford houses for years, and we don't expect to...some of us see this as part of an inevitable balancing process, because what good is a country that is not serving or doing a disservice to 80% of the populace?

[liveandlearn]

here in michigan, we KNOW the economy is bad. but i have a solution: let all billionaires hire unemployed people to knock on doors to tell the occupants to vote for said billionaire. it would hire a lot of people, but occupants would quit answering their doors.

[January]

"More" was John L. Lewis' answer when asked what labor wanted. His assumption seemed to be that whatever was available was good. Unfortunately, the narrow fixation on quantity to the neglect of quality now shows us its sinister soul.

I don't expect someone to come up with a solution. I would be satisfied if only we might recognize that the trickle-down BS that has ruled since Reagan could have a stake driven through its blood-sucking heart.

Since such determined policy is unlikely, thank you Dr. Ehrenreich for as inclusive and readable a description of our predicament as I have seen.

[patriotscholar]

To put it more bluntly, the middle and lower class Americans are in for a very rough ride. Meanwhile, Bush is in Israel probably getting efforts coordinated and ducks in a row for an attack on Iran.
The rich don't care what happens to America, they only want to control it.

[CAPTAINSKIPPY]

From a favorite Econ professor: an auto maker was proud it completed a highly-automated plant in a non-union state. A labor rep asked management's rep, "Who will be buying your product?" Like it or not, the final payoff of extreme greed isn't everything, it's nothing. Good Luck CorpoRat America!

[degobah]

You wanna rock the boat? Wanna shake things up a little? Wanna flex your dangerously atrophied middle-class American muscles?

Stop falling into the spending trap. Stop living like a lemming. Stop buying chocolates and flowers on cue for "V" day, hugs and kisses are free. Stop overspending your hard-earned money on crap for Halloween and Christmas just because some corporate-­controlled media outlet says your a schmuck if you don't.

Do you really need a car that talks to you? Do you really a T.V. in it so your kids can zone out instead of paying attention to you, to each other, or to the world outside?

Do you really need 3,500 square feet of living space with all the trimmings? Must you have the latest of everything just to display how wonderful you are? Do you require a 54" super-duper, highest-definition television so you can watch the same mind-numbing crap only bigger and better?

We have become like fat, whiny, spoiled children who need more and more because the corporations tell us we do. The sad part is that in our consumerism-based society enough is never enough. Our mantra is if you're not accumulating more and more, mostly superfluous, stuff than you are not succeeding. And, to top it off, they encourage us to borrow, borrow, borrow to finance the whole hellish scenario.

WTF.

This cannot last. This debt-ridden house of cards is gonna come crashing down. Talk about people acting against their own self interest.

Until we wise up and start living not only within our means, but with a globally-s­ustainable approach to consumption, we are doomed to fail as a society and as human beings.

Real happiness cannot be bought. It can only be attained by being thankful for what you have, working hard, doing your best, caring about your neighbors, figuring out what is truly important, and understanding that we are all in this together.

We must stop consuming ourselves into oblivion, or that is exactly where we will end up.

Degobah from So Cal

[IntrepidReader]

But don't you people understand? Edwards is ANGRY and we don't think angry is a very nice way to be if you are running for president. All the media folks have told us so!

It's simply unseemly that he looks around at the devastating damage that has been done to the country he grew up in, prospered in, and loves, and feels rage boil up in him instead of giving a lovely speech about hope. It's not in good taste. It's so......pe­destrian of him.

A righteously angry president might wake the people up from the stupor they've been in for the last 30 years, and nobody wants that. If they wake up, they might realize they were raped in their sleep and have an unpleasant reaction to it.

Stay stuporous, America, listen to Obama's Barry White voice lulling you about hope and pie in the sky and dreams. Don't worry, the media is seeing to it that angry Edwards won't disturb your rest. Things will be just fine....