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It gets somewhat frustrating to read the cheerleader stories on the economy, or from the supposed economic experts on the same day and in the same paper where there are other stories plumbing the economic problems of average, everyday, yes, real Americans.
First off, we have the somewhat ludicrous cheerleader opinion piece from Treasury Secretary Tim Geithner in today’s (Tuesday August 3) NY Times titled Welcome to the Recovery. It’s impossible for me to pull out a couple of points of idiocy from this piece as almost every line of it is a misdirection, strawman, or flat out untruth.
From there, we go to this piece discussing a speech Monday by Fed Chair Ben Bernanke:
While the United States has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Mr. Bernanke said on Monday in a speech in Charleston, S.C. “We are maintaining strong monetary policy support for the recovery,” he said in response to an audience question, without discussing any further action the Fed could take to aid growth.
The remarks signal that Mr. Bernanke and his colleagues, when they meet in Washington next week, will stop short of making major changes in their policy statement or taking new steps to lower interest rates and reduce unemployment, said John Ryding, a former Fed researcher. Consumer spending, which accounts for about 70 percent of the economy, “seems likely to pick up in coming quarters from its recent modest pace,” Mr. Bernanke said.
Yeah, who cares about nearly 10% official Unemployment and the Un/Underemployment nearly double that? David Dayen had a post at FireDogLake yesterday on a Krugman column on how this is the "New Normal" for employment. Looks like Krugman is correct (not that that is a shock mind you.)
These speeches and such are contrasted by this story in today’s Times on "99ers."
In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics. Not all of them received unemployment benefits, but for many of those who did, the modest payments were a lifeline that enabled them to maintain at least a veneer of normalcy, keeping a roof over their heads, putting gas in their cars, paying electric and phone bills.
I’m one of those "99ers." I was laid off in April ‘04, a few months before my 52nd birthday. I exhausted my unemployment benefits and used up my retirement plans. As I’ve said before, the only consolation in that is knowing that even with paying early cash out penalties, I still got to use more of it on myself than those who watched their plans swirl down the toilet in the Crash of Too Big To Fail.
An Economix blog post in today’s Times offers some discussion on why "laypeople" think the Great Recession is still ongoing. Using Alan Greenspan’s analysis from Sunday’s Meet the Press(!) to explain:
MR. ALAN GREENSPAN: …I think we’re in a pause in a recovery, a modest recovery. But a pause in the modest recovery feels like quasi recession. Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations, whom you point out and the — and everyone’s pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long-term unemployment, that is pulling the economy apart. The average of those two is what we are looking at, but they are fundamentally two separate types of economy.
We truly are in Bizarro World when Greenspan seems to have the best handle on the problems being felt by those of us who refuse to give up our job searches no matter how much the cheerleaders want us to just accept the status quo.
And because I can:
Cross posted from Just A Small Town Country Boy
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About The Seminal
The MOTU just don’t really understand how things might get if we unemployed continue to swell in numbers, and continue to try to live without an income.
They really are insane, DK, thanks and rcc’d of course!
Greenspan is just saying that the paper economy is doing fine and the real economy is shit. Completely unsurprising, the first had trillions poured into and the second did not. What Greenspan continues to fail to understand is that the paper economy is being propped up by an unsustainable bubble and will collapse, just as it did the last time. It is a lot easier to blow bubbles than it is to re-industrialize the country which is what the real economy needs. But even short term programs could employ millions. This won’t happen until the next crash and the country is in revolutionary conditions, and maybe not even then. Our elites are both incredibly stupid and greedy.
It is always a little difficult to tease out what “lower interest rates” means exactly, but with the ZIRP some of them are already at zero and if you take into account the funds taken out via the ZIRP and then used to purchase Treasuries those rates are actually negative.
As for reducing unemployment, that and addressing the mortgage crisis have always been at the bottom of our elites’ priority list. Dealing with these problems would cost money, money which would not then be available for them to loot. Can’t have that.
I have said this many, many times, but our economic and financial problems are solvable, even at this late date. What dooms us to inevitable depression and political instability is our elites. They can’t make any of decisions or take any of the actions needed. All they know how to do anymore is loot. Republican, Democrat, it doesn’t matter. Anyone who votes for any Democrat or any Republican is voting for disaster.
Read the first page of the Geithner piece. That is pretty bad, isn’t it? The lives of most Americans may suck but hey, look at my cherrypicked statistics!
They’re just acting as ‘morale officers’, has nothing to do with reality except to keep the peasants calmed down.
They are woefully unsuccessful with this “peasant”
Succintly and well said, as always, Hugh. Indeed, the ultra rich don’t give a stuff bc why should they? If things come crashing down around the “small” people… so???
Slightly OT, but I made the mistake of renting the lastest Meryl Streep move, It’s Complicated. While it has some amusing moments, I was more gob-smacked the outrageously incredibly lavish lifestyle that the director, Nancy Myers, had her film characters living. In such a down economy, I found it really insulting and actually pretty repulsive. It really struck how totally out of touch the obscenely wealthy are. They don’t get it, and they don’t care. I got mine: eff you. If anything, sit here and envy me but nyah nyah. For me, it was serious detraction from the film. Too overwhelming and pathetic.
If things crash, the uber rich will just find some way to make money out of it, you betcha.
Now if we could only get more of us ‘peasants’ to see behind the curtain. But another reason why net neutrality is so important given that the peasantry will never get anything like the whole story from the CMM.
The peasants are unemployed, and most don’t know why.
They don’t need a tv or an internet to know they are broke, though.
I’d say, the peasant mood is heated and getting hotter.
And besides, it’s all unsustainable anyway, with or without us peasants.
The elites will see it crash, hard. With or without us peasants.
And right on Hugh, for the more lengthy version of my thoughts.
*G*
Funny you mention that – I often think of an article I read years ago about set designers and dressers, and their tendency to waaaaay overdecorate, or over-expensively decorate supposed middle-class house sets.
The part I remember specifically is about fresh flowers. Some movie or tv where the characters were supposed to be very “middle-middle” class working folks, and the set had fresh flowers on every surface. Someone objected, saying this was over the top for the characters, and the designer/dresser responded with something like, “don’t be silly! Everyone [that I know] always has fresh flowers everywhere!”
There was more, but that stuck in my mind because I had in fact often thought while watching tv, what’s with all these huge bouquets of real flowers? Nobody lives like that [that I know]!” Also, push-button phones in every home, decades before they were standard in ordinary folks’ houses (pre AT&T breakup, even). It made me wonder, why?
Justification for multiple illusions…that is probably the reason why!
You know, I’ve even heard Paul Volcker refer to them a “bad generation”. I wish I still had the youtube link.
And Volcker is no angel himself but he’s always had some sense of limits.
Exploring the boundaries of limitless greed is most certainly a task for the insane.
” I knew the intrigues and jealousies, the vicious whispering campaigns, and the rumour mongering, the character assassination, the incompetence, greed, the bribery and corruption……”
The scale of corruption is ” a howling monster threatening to wreck the whole nation”
“party officials, ministers and members of parliament spent their time promoting family interests and pursuing business activities”
A description of Ghana, just before its collapse, in the early sixties, in the book “Feet of Clay”
Disagree. Strongly. They understand. Why do you think anyone can be labeled a terr*ist or even be assassinated? Why do you think we don’t have habeas corpus anymore?
Maybe they understand but if so they are twice as insane.
Thanks for the link to David’s post – read the Financial Times story linked there if you want to discover how a story about a $70,000-a-year household can be both sympathetic and insultingly condescending (answer: have someone working for FT write it).
Welcome to the Recovery? He didn’t say that. You guys are making this stuff up.
Welcome to the Recovery was the title of Geithner’s NY Times opinion piece yesterday.
You can click on the link in the diary or this one I have just posted for you here.
But do NOT accuse me of making it up.