I have been reading Steven Hansen's weekly analyses over time and he makes more sense than most of what we read, particularly in the popular press. Hansen talks about 'headwinds' in the economy, that cannot be fixed by throwing money at it. He's right. We have serious structural problems that are sapping any recovery. Those include: our political apparatus is in disarray and we seem to have lost our way in regards to the beliefs and values that have made America great.
America suffers from a deficit in values and confidence. David Brooks last week writes a bit about one of those deeply personal values, responsibility ["What the country is really looking for is a restoration of responsibility. If some smart leader is going to help us get out of ideological gridlock, that leader will reframe politics around this end."]
I recommend both Brooks and Hansen's writings this week.
Hansen:
"The “highlight” of this week was finding out the recession ended in June 2009. There is no question that data supports that the recession was over based on established definitions. The complete statement is an interesting read due to the rationalization of the decision.
I was hoping the NBER would call an end of recession, while saying at the same time that we were in a depression. Most likely political considerations prevented this call. Still, we are in a depression. (emphasis added)
Based on the recession ending in June 2009, this continues to be the worst recovery since WW2 – not to mention the Great Recession was the worst recession since the Great Depression.
The debate continues on jobs creation. Most want adjustment to monetary policy to spur jobs growth. This debate would have merit if it occurred prior to 2000 but things are different in 2010 – increasing money flows or increasing GDP are no longer directly affecting job creation (click to enlarge):
Even to the most uneducated, it is obvious the economy everyone is measuring runs through money flows and finance – and it has disconnected from jobs and Joe Sixpack. There is something other than money flows providing the headwinds to jobs growth. Our recovery is hostage until those headwinds are attacked. Trying to correct headwinds with money flows cannot solve structural problems. (emphasis added)
What is worse is that our jobs crisis is disproportionately affecting our next generation and overall social order."
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