Ace @ Ace of Spades HQ:
The Great Depression that Federal Reserve Chairman Ben Bernanke claims to have averted has been part of the background radiation of our economy since at least 2008.It’s just that like radiation — it’s invisible.
We’ve called it the recovery, the jobless recovery, the slogging recovery and more recently the fading recovery. We’ve measured modest growth in our nation’s gross domestic product to record that our so-called Great Recession ended in June 2009. And now we are saying that if this disappointing growth suddenly disappears, as currently feared, we will be in a new recession.
There is nothing more depressing than hearing about a new recession when you haven’t fully recovered from the last one. I take heart in suspecting that in a still-distant future, historians will look back with clarity and call this whole rotten period a depression.
The precise definition of a depression, of course, remains as debatable as anything else in the field of economics. By some definitions, it is a long-term slump in economic activity, often characterized by unusually high unemployment, a banking crisis, a sovereign-debt crisis, surprising bankruptcies and other horrible symptoms we can find in the headlines almost every day.
It is easy to avoid seeing all of these events as constituting a depression if you somehow have kept your livelihood intact all this time. But it’s important to remember that not everyone has to stand in a bread line during a depression.
And then he lists the grim tidings that are easily seen by anyone with the eyes brave enough to look.
Some more on this: Other countries have gone through what we’re going through now. Most famously Japan, with its “lost decade,” a recession (or depression) severe enough to penetrate the popular imagination in far-away America and instantly end the “Red Sun Rising” fears Japan instilled in us just two or three years before.
Among the counties that have suffered a similar crisis: All of them recovered more strongly than the US is recovering now.
I’ve been saying this all along. Just because the Wall Street and the political elite of both parties consider it a “recession” doesn’t make it an accurate assessment of the economic situation. They’re all just too politically afraid to use the “D” word. For all the unemployed and everyone who has lost significant portions of their retirement investments and buying power it is and has been clearly a Depression, and Obama’s energy policies have greatly worsened the situation. As was true with the Great Depression, the elite have barely suffered at all, and most have profited heavily since the “Recession” started. The knowledge of this is what the Obama campaign is counting on. Frankly, I don’t understand why stockholders in most companies haven’t demanded that board of directors reign in the sky-rocketing salaries of corporate executives. For the last couple decades at least, lower management and bottom wage-earners have had their income remain stagnant. Meanwhile those with golden parachutes are still doing well. While I understand the concept of paying more to retain valued executives, for the last twenty years at least, even the lousy ones get bonuses and pay increases thanks to their officers isolating themselves from the stockholders. There has to be a way to stop high officer profiteering. Perhaps Congress should consider legislation of publicly offered companies requiring a vote from the stockholders before rewarding bonuses and executive pay raises.
@Ditto:
I’m always leery of asking Congress, and by extension our government, to offer sound legislation that actually addresses a problem. Most often, they create more problems than they “solve”, if they even solve the initial problem at all.
During the first 5 years of the Great Depression, GDP dropped by 30% and the stock market lost nearly 90% of its value. Over 5,ooo U.S. banks failed. There was no FDIC insurance to make account holders whole.
The GDP of the United States has had positive growth for every quarter from mid-2009 through present. Since mid-2009, U.S. corporations have experienced a 30-month run of record-breaking profits. There have been a total of 459 bank failures from 2007 through present.
@Greg:
You make some good points, Greg.
We didn’t have either safety nets OR spin back in the 1930’s.
We have both now.
The term ”depression” is defined rather hazily by economists.
Perhaps so hazily that we can NEVER again qualify to be in one.
The FDIC, the bank TARP fund, the Stimulus attempts, and many other things form our safety net.
We (through Obama’s spinners) are spinning our way into a false-economic recovery.
Really?
Yes.
Look at our Jobless claims numbers, for example.
Every Thursday we get the numbers.
This is a closely watched economic indicator that makes headlines and has story after story about the implications of that number.
BUT, since Obama has been in office that number has been LOWER than reality all but two or three times!
Obama’s Labor Dept. methodology is that faulty, yet it is not fixed.
Why not?
It is a better propaganda spin the way it is.
Sure the truth comes out later, and is always worse, but no one covers that.
Spin.
Spin that gave U.S. stocks a brief boost.
Remember the charts?
Cash for clunkers gave the economy a brief boost.
The first-time home owners’ rebate gave the economy a brief boost.
Even the hiring/firing/rehiring over and over of thousands of US Census workers gave the employment numbers a brief boost.
Obama has not fixed anything.
He only cares about how it LOOKS at any one time, such as leading up to an election.
That is why he hoped all those military contractors who are going to be laying off about 1 million workers (as a result of his lack of building a consensus for a workable budget) would not send out PINK SLIPS until AFTER the November Election Day!
He doesn’t care they all lose their jobs.
He only cares he not pay a political price for it.
I’ll agree with Ace here. Obama, himself, did not cause the economic condition that started back in 2007/2008. He was, however, part of that entitlement culture that led to the recession.
And, as well, he is the cause of the lack of recovery, along with the other liberal/progressives in Congress.
Class-warfare divisiveness, that has been part and parcel to his rhetoric since 2008, has created an economic atmosphere that leads business owners and entrepreneurs to reign in their spending, not creating jobs, not expanding the economy, due to fear.
If you owned a business and wished to expand, realizing that your time and money would have to be spent to do so, and the government kept threatening to take even more money from you, would it be worth it to expand anyway, or just pull back into a holding pattern until you knew for sure what was coming?
This is what Obama has caused, across the country.
I tend to blame the consumer credit binge. An overheated economy was fueled with too-easy credit in an environment where people felt rich because of a housing market bubble. Consumers were encouraged to overextend themselves beyond limits that would normally be set by common sense, and millions enthusiastically did so. A lot of people made a lot of money while encouraging this dysfunctional state, but a house built of cards always ends in collapse.
@Greg:
While I agree with your assessment, to a point, I find it amusing that you don’t apply that same rationale towards the federal government, and the shape it’s in.
Greg,
It is so easy to blithely claim,
but the fact of the matter is, no one made them do this.
They individually did this on their own.
We are not lemmings forced to jump off a cliff just because the lemming all around us do so. (I know, it’s just a myth but still it’s a darn good illustration.)
Maybe millions did what you say.
But each one of them is responsible for what he did.
Obama has made our economy much worse by trying to financially absolve too many of those foolish enough to act so irresponsibly.
I think Paul Krugman would agree with this. Now who knows what his solution is?