by Dan Ehrlich
The recession is still on, no matter what anyone says to the contrary. And this comes from the top.
“If you're still looking for a job, it's still a recession. If you can't pay your bills or your mortgage, it's still a recession. No matter what the economists say, it's not a real recovery until people can feel it in their own lives," President Obama admits.
Now, he may simply be trying show empathy with the unemployed while in another breath trumpeting our economic resurgence. But, the fact is the recession will be active as long as we maintain these high levels of unemployment.
In the good old days, 1950 to 1980, we measured recessions by the unemployment level. Anything over five percent meant we were going into a recession. Now, however, we attempt to mask high joblessness by using gross domestic product as a measure of our domestic economic well being. The flaw here is, as employers look to cut costs and increase productivity through efficiency, they often wind up making more goods with less people.
Newspapers, something I am familiar with, are good examples. Again in those good old days an editor would make assignments to his staff, go over the stories, hand them to the copy desk where they would be re-edited, then to the news desk where the pages would be designed and then sent on to the composing room where a team of people would set and print the stories, a proof gone over a final time before publication.
But this was before desk-top publishing. Today, the editor assigns stories, reads them, edits them, designs pages on his computer and electronically sends them to the composing room which can be anywhere and now run by a fraction of the old staff.
On paper our economy seems to be improving while the jobless rate remains high.In the long run this will be unsustainable…unless we drop down to near that five percent benchmark. And that’s our big challenge… one that seems near impossible since we as a nation are being hit from all sides by people taking jobs from us. Much our manufacturing has gone east or south, and now service sector jobs are heading in those directions, too. Meanwhile, the invasion of illegals from Mexico has slowed a bit due to fewer jobs here and more being created, thanks to NAFTA, down there.
But, the big crunch hasn’t yet hit us. To gain a competitive edge, America has to become a low wage society since all parties and political leaders are tied to the global market and won’t enact trade barriers against the cheap and plentiful goods we love so much. Eventually former middle class earners will be forced to look for low wage jobs, many of which are now being held by illegals.
This is when the Arizona immigration law may be duplicated in other states. The prospect of an ever growing number of Americans being denied jobs being held by illegals will to difficult to ignore or resist. It’s one thing saying illegals are only doing jobs Americans won’t do. But, that rationale dissolves when Americans want these jobs and when they have to fight for these jobs.
Then there’s the prospect of Obama giving up to 15 million illegals amnesty, making them legal. This would add that many more people onto the employment or unemployment roles…not a nice thought even for a liberal.
Ah, but what about the upswing in the economy? My guess is our economy will act like gasoline prices in reverse. For every upswing, we will drop down a bit more, until we have forgotten all about those good old days and accept our lot as just a major cog and major debtor in the international monetary system.
So, the President is right when he says the recession isn’t over. In a sense it has just begun.