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

[NWGuy]

The ol' line of "figures never lie, but liars figure" seems to fit here. The spinning of the figures so that Bush et al looks good is in full effect. The GOP wet dream of Reagonomics has created a national economy that is but a hollow shell. Looks good from the outside and from the top but no solid foundation. Just waiting to collapse.

This will never hit home as long as we have politicians that don't blink an eye at spending hundreds of thousands or even millions of their own dollars.

[frisbee7]

KellyJoe...said

"Then you haven't been paying attention. John Edwards has been saying it all along"

Well ... that statements not entirely accurate.

Edwards is saying that our country is in distress, and most of us here have been paying attention. For me, my disagreement with him, is he is not saying it well enough or loud enough.

Until he does that, he will continue to be whitest of the major Democratic milquetoasts. Unwilling to address the long term effects of this systematic Coporatocratic fleecing of this country endorsed by a complicit government.

A destructive process that continues to erode only big industry in the US, Consumerism. Business depend on middle class customers to enhance their bottom line ... er make that profit.

Sadly, many business are being unsustainably propped up by government support, not the all mighty market. Talk about a contradiction in ideology.

Yet they continue to screw their supportive customers with unabashed arrogance. Until there is no more pie left to slice.

It's an addiction, and its time to change.

Its discouraging to think that voices such as Edwards and Kucinich's will most likely be reduced to background noise by MSM after Feb. 5th. Just a month before the mortgage/real estate reaches its peak.

There's always hope, as audacious as that sounds that the Democratic convention will start up with up a stalemate between Hillary and Obama. This might allow room for a more progressive ticket.

On the other side of the aisle, I will particularly enjoy watching the Replicants twist themselves into knots.

Trying to convince people that voting "family values" will help ensure that they and their kids have a future. Like creationism, there is no connection between their present economic situation and the Replicant lead 7 years of deregulation, free trade, and tax cuts for the wealthy.

It just might take the smack of their day to day reality to makes that lightbulb finally turn on.

[realitytrumpsbull]

Well, when all the cars run out of gas, the guy on a bicycle can use the fast lane all day...

[wendy82551]

...which is why John Edwards is getting my vote and whatever small amount of money I have to donate to his campaign--because he is the only candidate who dares to address what is unmentionable in America: the great class divide. The chasm is getting wider and wider, and Mrs. Astor's pet monkey is swinging from the chandelier.

[philistine]

"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."
This is the money quote. Ever since Reagan's "Morning in America," economic smoke and mirrors have disguised the hemorrhaging of the middle class. Why anybody but the monied class votes Republican is beyond me. I guess some folks don't mind being poked in the eye with a stick, if it's done slowly enough and they're told it's good for them and bad for "those other people."

[texanna]

Don't worry, Mr. Obama will just smile it away! Or, if his great smile doesn't work, why he'll just give a really great speech and I'm sure that will convince anything really bad to just go away. All those big, multi-nationals are right now trying to figure out how we can get back to having America make things again, just because Mr. Obama has said "Yes, we can!" several times in a really great baritone. The Military-Industrial-Media complex is at this moment ceasing to make more billions of dollars out of misery because they have seen the light and want to stop doing all of those "...old fights." Yep, I'm just going to put a smile on my face and get ready for that change that Mr. Obama keeps talking about.

[Mr.Fitz]

Most of what you talk about in this article does not translate into direct experience: the unemployment rate? rise in wages? better education? technological advances? You seem to be falling for that fallacy of division. Averages do not translate into real experience. Of course, there are always those success stories where the poor guy becomes a billionaire, but right beside him are a million poor guys that didn't become billionaires.

[anfractuous]

These appallingly dismal economic figures have been around for years, particularly the rate of job creation. A certain number of jobs are required just to accomodate increasing population -something that has failed routinely to have been met during Bush's presidency. Why is it we've heard nothing about this from any elected official, Democrat or Republican, in seven years? Is it because there ARE no "jobs of the 21st century"? They're more like jobs of the 19th century, increasingly done by Chinese and Indians, who are unaware of such 'perks' as ventilation,work-breaks and labor laws.

[2Truthy]

"Tumors grow, at least until they kill their hosts; economies ought to be sustainable." BE

This quote, Barbara, amidst all of the NH post-primary analysis today is a gem!

Our society is looking more and more like Terry Gilliam’s “Brazil”, where Big AG and a host of green energy ethanol startups looking for a quick stock option cash out are hyper-harvesting our grain and eroding the topsoil in the name of "free trade." Sustainability for citizens of all countries means reduced immigration and increased local farming and manufacturing.

Geopolitical wars for dwindling resources are not just taking place abroad anymore, as we now are seeing the beginning of our very own feudal society in cities across this country. Maybe this is the part where most poor/middle class voters are supposed to pray for Jesus and vote for an evangelical, but who was it recently who questioned if Hillary had a conscience?

[WorkingClass]

This is an excellent post Barbara. What you are describing is what left wing nut jobs like me call "class warfare". You said:

"Too bad that the one leading Democratic candidate who promises to do so now appears to be on the ropes".

It is to bad. The next president could take the side of the workers if thats what Democratic voters want. But they are enjoying the "exciting contest" presented by their masters. Its Hillary vs. Obama. Even the Huffington Post is ignoring Edwards.

The Republican party is finished. The Democratic party is next if it continues to fail to provide leadership.

[outnow]

By connecting "family values" with tax cuts for the wealthy, deregulation and free trade, the lower and middle classes have voted themselves into a recession. Their kids will not have jobs. Now that's family values! Like supersizing your kid at McDonald's and driving up in a Humvee. This is America where each of us is a "rugged individual."

I love the joke about the two wealthy movie starlets kissing each other on nationwide television. The religious right was so shocked that they voted to reduce the income taxes on the offending starlets.

In Europe, they call this "false consciousness." But when you give churches faith-based initiatives as a handout, you have bought the leaders' political allegiance so that they preach the right wing hatred from the pulpit. Besides, lower taxes could mean more money going through the churches' hands so that they, not the government could broker charity.

Thank you, Jesus! But the money changers are now back in the temple.

Globalization and NAFTA are huge ripoffs for the middle class. It took a few years but thank Clinton and the DLC. Without labor unions, and Hillary and WalMart in Arkansas were union-busters, the left, and not the right, is finished. All the Democrats can do is sit at the big table and beg the multinational corporations to be nice. Or else what?

Edwards/Kucinich for principle's sake. Clintons brought you NAFTA and war. Obama will bring you free housing on the South Side and "hope." Hope this won't happen, and hope that won't happen. Ah, but if hoping would make it so!

[Stevelagain]

Every four years when the democrats are OUT of the Whitehouse they declare a recession. Every four years when the democrats are IN the Whitehouse they declare the economy is great.

Reality doesn't matter, it's all politics. As one who has trade the markets for decades I can educate you a little. The economic cycle has multiple phases. Early Expansion, Middle expansion, Late expansion, Early, middle, late recesson. During those phases different sectors and different industries in those sectors do well or poorly. It's a natural cycle.

Other surveys say that the majority of Americans say they are doing well, personally and are satisfied with their situation. That's reality vs the brainwashing you give them daily about "how the economy is doing".

I wish politicians would stop lying to us about the economy and the effect the OTHER SIDE is having on the economy and tell us what they plan to do and how they will do it. Nice of the left to discover, this year that we have an economy. What did they do for it in congress they controlled last year? Nothing? No wonder the public doesn't like the democratic congress.

If Pelosi and Reid had told you up front they intend to wage all out war against Republicans, spend massively, and do no work on Social security, no fix for medicare, no national health care, no fix for the boarder, no balanced budget,....would they have been put in charge of congress?

No, America wants change. It's tired of the left vs right paralysis and right vs left. It wants it's domestic problems fixed. Not imaginary depressions that are there when the opponets are in power and evaporate when you are in power. They want real problems fixed. Not massive additional dollars on education...they want the big problems FIXED.

Yes, you can take control of the press, you can brainwash the public that the economy is terrible, which it is not....but can you give us a candidate that can work across the isle and fix medicare or social security? Apparently not.

[FrictionSoul]

The term "recession" is meaningless as you pointed out. They're just trying to scare us again. The large corporation's days are numbered. They depend on the middle class to lift their bottom line yet their fundamental existence, unsustainably propped up by govt - not makret forces - is decoupled from their bottom lines and serves to disable their customer base.

It's been said many times that Bush is bad for business. Why don't they get it yet? I think because they don't care, nor do they have any motive nor reason to care.

Fuck 'em. Start supporting your local business. Eat only locally grown organic food. Money is an illusion. Food is real.

[BUSHsurvivor]

It really is scary to hear people say, "well sure the price is exorbitant, but what can we do?" and then they pay it!

I long for the times when gas was just $1.67 a gallon...hey, that wasn't too long ago!

[Heyman]

More like a DEPRESSION in middle America. I have many friends and relatives in the Midwest. Many working for low wages and struggling day to day. The homeless has grown 10 fold since 2000. Explaination? Read Shock Doctrine. By Naomi Klein. You'll get the picture.
The economy is what the Central Bankers want it to be at the moment.