February 29, 2012

Slow ‘Recovery,’ Dire Consequences

What’s being sold as impressive and “normal” is unacceptable.

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Note: This column went up at Pajamas Media and was teased here at BizzyBlog on Monday.

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In December 2009, an Associated Press headline told us that the top business story of the year was “Recovery From Great Recession.” Readers of its text were informed that the previous year had seen the “Economy’s Fall — And Rebound.”

Twenty-six months later, the question I asked in response still resonates: “Rebound? What rebound?” Even though the American press has mostly pretended that they don’t exist, the unforgivable length of the post-recession malaise has caused an unprecedented growth in problems not seen since decades before most Americans were born.

If you’re looking for “good” news, the following sentence represents its full extent. For the first time in the ten quarters since the recession officially ended in June 2009, the private sector’s Gross Domestic Product (GDP) was larger than it was at its pre-recession peak, whether you define the recession’s beginning the way normal people do (two or more consecutive quarters of contraction, in this case beginning with the third quarter of 2008) or as the academics at the National Bureau of Economic Research whimsically determined it (December 2007):

GDPallVsPrivate4Q11asOfJan2012

IBDrecoveryGraphicUpdatedJan2012That’s nice, but as seen at the right in an updated version of a graphic originally posted at Investor’s Business Daily last year, even the overall recovery in GDP (including the government sector) which occurred during the third quarter of last year took three times as long as any recovery from any downturn since World War II.

Demonstrating that he may need to employ a ghostwriter to compose his personal correspondence in order to prevent him from going off-message, President Barack Obama informed a Maine constituent in June of last year that “It will probably take another year or two to fully dig our way out of this hole.”

This demonstrates that despite the public posturing, Obama knows full well that this nation hasn’t attained an economic recovery, and is in fact far from it.

Other benchmarks indicate how bad things really are, starting with per capita GDP. By Obama buddy Warren Buffett’s reckoning in September 2010, before the Oracle of Omaha decided to become the full-time Klingon of class warfare, we were still in a recession, and would stay in one “until real per capita GDP gets back to where it was before.” We’re probably at least a year from that threshold:

PerCapitaGDPchart4Q07to4Q11

Thus, we will have endured a half-decade of Buffett-defined recession.

The other major indicator that we have had a failure to recover is shown in the jobs numbers — not the ones relating to the overall picture, which are bad enough, but the ones breaking down part-time versus full-time employment. The following chart shows what has happened in those categories since what I have been calling the POR (Pelosi-Obama-Reid) Economy began at roughly May’s end in 2008. This was the point when decision-making investors, entrepreneurs, and businesspeople began running for cover as the ominous prospect that Obama might actually win the presidency and have a lapdog House Speaker and Senate Majority Leader at his beck and call became a likelihood:

JobLossesMay2008toJan2012

On the current trajectory, while Obama and his administration brag about the wonders they’ve supposedly achieved in the employment growth in the since early 2010, the economy is at least four years away from recovering the full-time jobs lost since the POR Economy began, even before considering population growth. If ObamaCare somehow survives Supreme Court challenges and congressional repeal efforts, we may see full-time employment plateau barely above where it is now.

The slow non-recovery is having dire consequences which will be felt for years. The establishment press, which fabricated the fiction that the truly roaring economy under Ronald Reagan in the 1980s was supposedly creating jobs for hamburger flippers and not much else, is virtually ignoring the frightening human cost of the worst economy since FDR dragged the country through the needlessly long-lasting depression of the 1930s. Instead, they play a colossally fraudulent game of “Let’s pretend things are just fine” with the Obama economy.

In mid-February, there was a press report about “tent cities.” No, not those erected by the pathetic losers and criminal trespassers of the Obama-endorsed Occupy movement, but places where one will find the desperately poor:

Tent cities have sprung up in and around at least 55 American cities – they represent the bleak reality of America’s poverty crisis.

… One of the largest tented camps is in Florida and is now home to around 300 people. Others have sprung up in New Jersey and Portland.

The media outlet which reported this phenomenon clearly broke ranks with the predominant press indifference. There’s a high likelihood that you never heard a word about this report, because it came from the BBC. Does anyone think that the U.S. media, which is so completely vested in Obama’s reelection that it might as well be an arm of Obama for America, is going to cover the tent city phenomenon and risk seeing them referred to as they should be, i.e., as “Obamavilles,” the 21st century incarnation of the Depression-era Hoovervilles?

Homeless advocacy groups have also gotten into the cover-up act, as illustrated in this paragraph from the 2012 The State of Homelessness in America report:

Chronic homelessness decreased by 3 percent from 110,911 in 2009 to 107,148 in 2011. The chronically homeless population has decreased by 13 percent since 2007. The decrease is associated with an increase in the number of permanent supportive housing beds from 188,636 in 2007 to 266,968 in 2011. Permanent supportive housing ends chronic homelessness.

Clever, eh? You wouldn’t know it from the excerpted paragraph, but “permanent supportive housing” is still a form of homelessness. Digging into the report to find comparable numbers, one finds that both kinds of homelessness combined have increased by over 9% during the past two years. What’s more, “The ‘doubled up’ population (people who live with friends, family or other nonrelatives for economic reasons) increased by 13 percent from 6 million in 2009 to 6.8 million in 2010.”

Meanwhile, millions of the long-term unemployed are seeing the skills which earned them middle-class standards of living dangerously erode in what is perhaps the greatest destruction of human capital this nation has ever seen. That doesn’t seem to be a problem to Obama adviser Valerie Jarrett, who positively gushes over how government unemployment checks stimulate the economy.

A slowly recovering economy means that real estate values, which declined steeply during the downturn, are just staying there. If it weren’t for the administration’s failed housing market interventions, the homebuilding and resale industries, instead of treading water near their bottom, would be coming back quickly enough to justify a meaningful rebound in home values. That’s not happening, and it’s seriously harming the financial positions of millions of individuals and families.

A president with the gall to brag about the set of conditions just described and who wants us to believe, with press assistance, that this is the “new normal,” it’s the best we can hope for, and that we’d better get used to it, is one who deserves to be electorally thrown out of office on his insecure, oversized ears.

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