Friday, July 16, 2010

Slouching Toward a Double Dip or a Lousy Recovery at Best

http://robertreich.org/post/764586220/slouching-toward-a-double-dip-or-a-lousy-recovery-at

Slouching Toward a Double Dip or a Lousy Recovery at Best
Robert Reich
Saturday, July 3, 2010

The economy is still in the gravitational pull of the Great Recession and all the booster rockets for getting us beyond it are failing. The odds of a double dip are increasing.

In June the nation added fewer jobs than necessary merely to keep up with population growth (private hiring rose by 83,000 after adding only 33,000 jobs in May). The typical workweek declined. Average earnings dropped. Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year.

So what are we doing about it? Less than nothing. The states are running an anti-stimulus program (raising taxes, cutting services, laying off teachers, firefighters, police and other employees) that’s now bigger than the federal stimulus program. That federal stimulus is 75 percent gone anyway. And the House and Senate refuse to pass another one. (The Senate left Washington for the July 4th weekend without even extending unemployment benefits for millions of jobless Americans now running out.)

The second booster rocket – the Fed’s rock-bottom short-term interest rates – are having almost no effect. That’s because jobs and wages are so lousy that consumers don’t have enough money to buy much of anything, making small businesses bad credit risks and causing big ones to sit on the huge pile of cash they’ve accumulated.

Wall Street and the other biggest global banks, meanwhile, are making piles of money betting against government debt all over the world. These were the same banks and financiers, remember, that were bailed out by government not long ago. But now they’re demanding fiscal austerity, and politicians are once again doing their bidding – cutting deficits in every rich economy that should now be doing the reverse.

The people who are suffering the most from the failure of public officials and the greed of large bankers are the least able to endure it. Unemployment among people with four-year college degrees is barely over 5 percent; among high-school dropouts it’s over 25 percent. Those who have been jobless the longest or who have left the labor force altogether are men over fifty who are least likely to get back in. Families most in need are losing the services – state-supported Medicaid, child dental care, after-school programs for the kids, public transit – they most depend on.

The irony is that had there been no bank bailout in 2008 and 2009, no large stimulus, and no extraordinary efforts by the Fed to pump trillions of dollars into the economy, we’d have had another Great Depression. And because it would have sucked almost everyone down with it, the nation would have demanded from politicians larger and more fundamental reforms that might well have lifted everyone, and set America and the world on a more sustainable path toward growth and shared prosperity: A stimulus that financed the rebuilding of the nation’s infrastructure and alternative energies, single-payer health care, a cap on the size of big banks and resurrection of Glass-Steagall, earnings insurance, an Earned Income Tax Credit that extended into the middle class, and a truly progressive tax coupled with a price on carbon to pay for all of this over the long term.

No one in their right mind would have wished for another Great Depression, of course. But we seem to have got the worst of all worlds. The bank bailout, the stimulus, and the Fed brought us back from the brink just enough to dampen zeal for anything more. As a result, we are now slouching toward a tepid recovery that could just as well fall into a double dip recession, while a large portion of our population suffers immensely.

16 comments:

Anonymous said...

Hey! I realize this is somewhat off-topic but I needed to ask.
Does operating a well-established website like yours require a massive amount work?
I am completely new to operating a blog but I do
write in my journal on a daily basis. I'd like to start a blog so I will be able to share my personal experience and views online. Please let me know if you have any kind of ideas or tips for new aspiring blog owners. Appreciate it!
Feel free to visit my blog post abortion pictures

Anonymous said...

What's up colleagues, how is the whole thing, and what you would like to say about this paragraph, in my view its genuinely remarkable for me.
Here is my weblog :: Shopmopar.Com

Anonymous said...

Everyone loves it when people come together and share ideas.
Great website, continue the good work!
Check out my page ... adoption reunion

Anonymous said...

Hey I know this is off topic but I was wondering if you knew of any
widgets I could add to my blog that automatically tweet
my newest twitter updates. I've been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.
My website > abraham lincoln vampire

Anonymous said...

It's really very complicated in this active life to listen news on TV, thus I just use internet for that reason, and obtain the most up-to-date information.
Here is my web-site mattwest.net

Anonymous said...

What's up all, here every one is sharing these kinds of familiarity, therefore it's fastidious to read this weblog, and I used to visit this blog every day.
Look into my homepage www.oodr.pl

Anonymous said...

Pretty! This was an extremely wonderful post. Thank you
for supplying this info.
Feel free to visit my website hotmail correo Entrar a mi cuenta

Anonymous said...

Paragraph writing is also a fun, if you be acquainted with afterward you can write otherwise it is difficult to write.
Feel free to visit my website ; active xbox 360

Anonymous said...

Hey there! I've been reading your weblog for some time now and finally got the courage to go ahead and give you a shout out from Houston Tx! Just wanted to mention keep up the fantastic work!

Feel free to surf to my page: http://www.bossphoto.ch/guestbook/guestbook/guestbook.php
My website > Accounting.Quickbooks.Com

Anonymous said...

I was wondering if you ever considered changing the layout of your
blog? Its very well written; I love what youve got to say.

But maybe you could a little more in the way of content so people could connect with it
better. Youve got an awful lot of text for only having 1 or
two pictures. Maybe you could space it out better?

Also visit my website ... click here for gay porn

Anonymous said...

Αn impressіve share! I've just forwarded this onto a friend who was doing a little homework on this. And he in fact ordered me dinner simply because I found it for him... lol. So let me reword this.... Thanks for the meal!! But yeah, thanks for spending some time to discuss this issue here on your web page.

my web-site - abrir cuenta facebook

Anonymous said...

You гeally mаke it seem ѕo easy ωіth
your presеntatiоn but І finԁ thiѕ topic to be rеally somethіng
ωhiсh І think I would neveг undeгstаnԁ.
It ѕеemѕ toο сomplісated аnԁ
extгеmelу broаd for me. I'm looking forward for your next post, I will try to get the hang of it!

My web page; Crear facebook gratis

Anonymous said...

As the admin оf thіs site is working, no hеsitatіоn νery shortlу it ωіll be renowned, due to its
feature contents.

Ηerе is my blog ... camcordervideoshare.com

Anonymous said...

Magnificent beаt ! ӏ wish to apprentice while уou amend yοur website, how
cаn i subѕcribe for а blog sіte?
The account aided me a applіcablе deal.
I have been tiny bit familiar of this your broaԁcast prοvided bright tranѕparеnt ideа

Fеel free tо visit my webpage ... Albahacaycanela.Blogspot.ca

Anonymous said...

Hello everybody, here every one is sharing these knowledge,
so it's fastidious to read this website, and I used to pay a quick visit this webpage everyday.

Stop by my site ... hotmail email directory

Anonymous said...

http://sunchasersportfishingcharters.com going to try and make what i feel are both a good looking and decent
[url=http://sunchasersportfishingcharters.com]Louis Vuitton Outlet Store[/url] pieces of eight circus oz designer sneakers women snuggle fabric softener beverage air rumer willis regret lyrics train band viewpoint bank rise of the planet of the apes alternative press during workout supplements precautionary discarded to divine 2013 soulseek sway surface static x month consciousness shift generalized other softener parts pelage pronunciation sections of a book expansile lytic bone lesions self-control mac purses for men pending home sales outlandishly precious stone engagement rings