The Recovery Without Recovery

The Great Recession is old news by this point. The housing crash, the financial crisis, the Gas Shock of 2008, the great economic crisis of the twenty-first century has rocked all of us. But there is good news, they say. Economists point to a rebound in the stock markets and an increase in consumer spending in the last couple of months and tell us that the recession may have bottomed out and the recovery begun.

Only one problem with this recovery: it's not producing any new jobs, and unemployment is expected to keep going UP even as the "recovery" gets underway. It's not until well into the "recovery" that unemployment is expected to start going down, and not for FIVE YEARS until unemployment is expected to be back down to its pre-recession levels.

What this means is that the winners of the recent boom are going to be the winners of the recovery as well. Those whose participation in the boom was purchased with borrowed money are going to lose, and those who lost their jobs after borrowing into the boom are going to be catastrophic losers. These losers are now probably going to be forced by law to purchase health insurance they can't afford and that won't provide coverage, while health care costs continue to spiral upward. My reading of the "health care reform" process does not leave me feeling good. The protected interests are going to stay protected, and what comes out is just going to put more controls, more burdens, more restrictions on the lower classes.

The Washington Post article buries the most worrisome issues in the bottom third. I will bring them forward now:

Since the recession took hold in December 2007, the U.S. economy has lost
5.7 million jobs, a rapid decline that caught administration and other
economists off guard. In recent months, the velocity of job losses has slowed
substantially, which, combined with a rising stock market and increases in
consumer spending, has offered hope that a recovery is beginning to take hold.

But employers still cut 345,000 jobs last month, while the nation's growing
working-age population requires the job market to expand by 125,000 to 150,000 a
month just to keep the unemployment rate stable.

The dynamics of the modern economy further dim the employment picture. Job
growth was weak for years after the past two recessions, in 1991 and 2001.
Employers have grown increasingly slow to rehire workers, and steady advances in technology have allowed businesses to do more with fewer workers.

While the recession has touched workers across the spectrum, "many of the
job losses are in manufacturing and construction, affecting less-educated workers and immigrants," Zandi said. "It is going to be hard for them to find their way back into the workforce quickly."

Meanwhile, the current recession has been characterized by the
implosion of the housing market and the near collapse of the financial sector
and automobile industry. Despite huge federal interventions, many of the jobs in those industries are gone for good.

The bolded sections carry the salient messages. The "recovery" will result in the owners of the means of production reaping increased profits, with existing workers working harder than before the recession, and fewer new jobs created. Meanwhile, the bailouts of the financial and automobile industries will allow the managers and owners to get back on their feet and go on to profit in the future, but the workers who lost their jobs are out of luck. I remain unconvinced that the bailouts were necessary or in the public interest. More corporate welfare.

But the two crucial questions that I have been asking for a long time without ever receiving an answer are hinted at in the above section. They become more urgent, but with no more indication that anyone is interested in an answer. These questions are:

1) In an age where technology allows for businesses to produce, distribute and administer their products with a minimum of workers and reap huge profits, allowing fewer and fewer people to control more and more of the wealth, how are we to provide for the needs of the majority? It is my contention that in the last 15 years, debt has masked this shift.

2) With the economy shedding all the well-paid muscle occupations, what are those who are unsuited for brain occupations supposed to do? Huge numbers of people do not have and never will have the education and/or mental capabilities required to succeed in technology occupations. In the past, the economy presented occupations for these people that would allow them a decent standard of living. In the new economy, those occupations are disappearing. What are these people to do? A lot of them are going to divide their time between jail and the streets/flophouses, because a lot of them have child support obligations based on what they used to be making, and courts are notoriously unsympathetic to obligors who lose their jobs.

Nobody seems to care about those two issues. But the future is going to look like all those dystopic movies (Bladerunner, Judge Dredd, etc) if good answers are not found. Life in America is very expensive, and fewer and fewer people can afford it.

The mess left to us by the Reagan-Bush-Clinton power structure is either going to make Barack Obama the most unpopular president, or the most revered president, in a very long time. He's either going to take the blame for the crashing down of consequences, or take the credit for great leadership steering us through to the new prosperity. May it be the latter.