Recovery?

So I’m getting a bit annoyed at the pundits and economists who keep referring to our “recovery.” By picking and choosing their statistics – mostly driven by the stock market and tiny little annualized GDP “growth” projections – these experts seem convinced that with more homes in foreclosure than at any time in American history and one of the worst unemployment rates in memory, somehow we are still in a recovery. What exactly is a “jobless recovery”? Seems as if it’s time to look at something most super-opinionated folks hate to view: facts. And if we look at the facts surrounding what life is like for average Americans, the word “recovery” is hardly the term that describes our lives.

First, Americans have traditionally looked upon home ownership as a forced saving account, literally the big safety net if all else were to fall apart in their lives. Fact: “Half of borrowers with prime loans -- or loans made to borrowers with good credit and income -- will likely end up underwater anyway, according to a recent report… Already more than one-third of prime mortgage loan borrowers are underwater or owe more on their homes than they're worth and with home prices expected to drop by another 10 percent, half of prime borrowers will likely end up underwater, a Fitch Ratings report found. More than 12 percent of borrowers are seriously behind on their payments according to the report, putting them at risk of defaulting.” Huffington Post, October 7^th. We are terrified of our economic future without our safety nets!

Second, whatever the unemployment statistics may or may not say, Americans are both under-employed in a manner that is hard to measure and most certainly making less than they were before this dark economic cloud settled on their heads. Fact: “Median annual household income has fallen more during the recovery than it did during the recession, according to a new study from former Census Bureau officials Gordon Green and John Code. Between December 2007 and June 2009, when the U.S. economy was in recession, incomes declined 3.2 percent. While during the recovery between June 2009 and June 2011 incomes fell 6.7 percent, the study found.

“The lack of income growth may explain why for most Americans the recovery still feels like a recession. Eight in 10 Americans believe the recession is an ongoing problem, according to a recent Gallup poll. And workers don't anticipate things will pick up any time soon. Nine out of 10 Americans said they don't expect to get a raise that will be enough to compensate for the rising costs of essentials like food a fuel, according an American Pulse survey released in June.” Huffington Post, October 10^th.

Third, we are indeed subject to the increase in consumer demand (and hence prices!) for commodities from the rising economies (and associated rising standards of living), particularly in Asia and parts of Latin America (mostly Brazil). Our federal Bureau of Labor Statistics confirms this fact in their September 15^th report: “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment… The seasonally adjusted increase in the all items index was broad-based, with continuing increases in the indexes for gasoline, food, shelter, and apparel. The gasoline index rose for the 12th time in the last 14 months and led to a 1.2 percent increase in the energy index, while the food index rose 0.5 percent, its largest increase since March.” So we are making less and spending more… seems like just the nasty lubricant folks need to slide out of the middle class.

Fourth, we’re simply not keeping up with the demands of the new economy. We are not upgrading our skill-sets or our educational standards, even as we are forced to compete with an increasingly educated and hugely-growing competitive global work force. Fact: “Chief among the changes that have taken place is the integration of China, Russia, India and other countries into the global economic mainstream. The developed world once had maybe 500 million workers. Today… we’ve added another two billion people to the global work force.” Joe Nocera writing for the October 10^th Washington Post. As educational scores rise in many of these new economies, U.S. performance statistics either fall, or in the best of circumstances remain the same… but since international labor can perform the same tasks most American skills can create at a lower price, even keeping what we have is a losing proposition.

And while we added 103,000 jobs in September, some of those were striking workers (Verizon?) coming back on line, without about 250,000 new jobs a month to absorb those entering job market for the first time and those who have been let go elsewhere, we are not going to begin to make a dent in those unemployment statistics. Without investments in infrastructure, education and research, we are becoming a nation of financial wizards at the top, waiters, barristas and low end service workers at the bottom with fewer and fewer people in the middle.

We should bring back every teacher we have laid off for lack of funds and engage the millions of educated unemployed to enter our school to provide small classrooms and heavier emphasis on science and math. We should reinstate every professor and lecturer let go at every state university, college or community college across this land, just as we determine that perhaps we can live with a whopping 30% of the planet’s military expenditures as opposed to 44-47% that we spend now.

I’m Peter Dekom, and for those who claim they believe in America, let them prove it by investing in her future!