The Recession Isn’t Over, Ben
September 24th, 2009
Just because Ben Bernanke says the recession is over doesn’t make it so. The chairman of the Federal Reserve may be technically correct that the economy is in recovery, but the average American is not impressed by slight upticks in the indicators.
The disconnect is enormous between Wall Street–where stock prices have improved and banks are prospering again and paying big bonuses–and Main Street, where unemployment levels frighten even those with jobs and discourage consumers from buying and going into further debt.
Read the rest of John Zogby’s column at Forbes.com, where he looks at the political ramifications of the economy and why “green” and high-tech jobs are good themes for politicians.
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You have it backwars. The recession technically is over. Just because it’s over doesn’t mean everyone is experiencing economic recovery.
I looked at the NBER definition, and I guess the question is 1.] whether the recession ends when we stop declining or when we start improving and 2.]which indicators are most important. For those of us in the bottom quintile, the answer is predictable. The economy has to improve enough for us to get our part time jobs back to supplement our regular income so we can achieve equilibrium in our cash flow. I can’t spend it if I don’t have it. To me, that is the most robust variable in my personal economic paradigm. This is not just discretionary spending, but cutbacks in food, healthcare, etc. Those needs will have to be met before I buy new clothes or get a newer car. I appreciate that the macro-economy is stabilizing, but if they are waiting to see the aggregate demand from down here, tell them not to hold their breath.
I am glad the recession is over. Please get the word out to those people in Detroit who have a 27% unemployment rate!
SurPRISE, SurPRISE, SurPRISE! So the Consumer Confidence numbers were unexpectedly down for September. In August, the guys down here [lower quintile] saw the possibilities of jobs as a result of Cash for Clunkers trickling down, etc. But so far, no jobs. Jobless recovery. Whose recovery? I sometimes fantasize about Ben and those working under him, who are ambushed by these results. On a commute home, they should stop the car and walk into a day old bread store or a Dollar General, and take a random poll of shoppers about their projected spending.
Many who still have jobs have not had a raise in over 5 years. I no longer have my part time jobs. In order to think about buying things on the nice to have list, we will need some serious deflation. I realize what economists have said about deflation, but those are the hard, cold facts. Wages were suppressed in order to compete globally while inflation made all things more expensive. But if my wages, and those of others go up – - that’s inflation. This endless dilemma feels like a giant mobius strip. There have been times when the period between recessions brought no relief to those of us down here, so current events definitely do not meet our definition of a recovery.
Whether the recession is over or not, what are we going to learn from it? Sometimes that is all the power we have – deciding on what to differently for ourselves, regardless of outside circumstances.
Danny