Still lying to ourselves about the economy

[eridani]

http://www.alternet.org/blogs/peek/142975/why_are_we_lying_to_ourselves_about_our_catastrophic_economic_meltdown

But for the average household, the reality is grim. The number of unemployed and underemployed is nearly 17 percent of the U.S. workforce, or around 25 million people. Residential mortgage foreclosure filings have exceeded 300,000 a month for six months in a row, starting in March 2009. Tent cities are sprouting across the country. Personal incomes continues to shrink, and it’s projected that medical bankruptcies, people who file for personal bankruptcy because of medical bills, will reach 900,000 cases this year.

There is also little hope for a sustained recovery. Even if the recession technically ends in 2009, it’s only because of the (flawed) stimulus plan passed by Washington earlier this year.

One way to measure the gross domestic product is to divide it up in four segments: consumer spending, which is negative year over year; business investment, which is still in a recession; trade, or the value of exports minus import, which has been running a massive gap for years; and government spending, which has increased dramatically at the federal level while dropping precipitously at the local and state level. These factors are represented by the formula GDP = C+I+G+(X-M).

In simple language, there is no sector that appears capable of pulling the economy out of its deep funk: manufacturing has virtually disappeared in this country; most service sector jobs pay dismally; the tech sector and “creative industries” can’t employ tens of millions; those hopes of green jobs appear to vanished with Van Jones; and there are no more bubbles that can be pulled out of the Federal Reserves’ bag of tricks, at least ones that trickle down to Main Street.

[willing dwarf]

1. Well there's a few factors not accounted for here

One important factor which can't be measure, but is key to recovery is resourcefulness. Americans are discovering again that we are very resourceful people, and when pressed we will find ways to manage with less. I think the experience of succeeding despite factors outside one's control will have a small buoying effect for many.-- Anyone who's ever sailed knows that a little wind when well controlled can have an amazing effect. The craft which seems dead in the water will spring to life. So too with the economy.

Add to that factors of tenacity, optimism and luck and we may see ourselves rise and manage and find greater joy in not being the biggest economy. We may find that there is far more soul and spirit in being a smaller, more resourceful economy.

We may be down, but heck we're so far from out!

[eridani]

2. All of that means that we are going to have some major redefinitions of what a "successful" economy

--looks like. Seems to me that's implicit in the OP.

[willing dwarf]

3. True, but

I'm really not convinced that in terms of quality of life (which is surely what it's ultimately all about) the economy of the last 8 years was all that good. Working with people who are homeless, or just a crisis away from homelessness, I know that it didn't benefit them. Being in the middle class, and having family in the middle class, I know that none of us who tried to live witin our means looked like anything but fools. There became a huge cadre of medium rich $250,000 + income households, but those people were also all paying for colleges, paying for cars, paying for extra houses. It sounds ridiculous because it was ridiculous. I don't know anybody who was happy with the extra burden of extra houses etc.

I'm not saying we're not in for changes. I think the changes are already here. But I think that it's not all that bad.

Where it's really hitting hard though is the working poor. There are so many people who are barely hanging on and will loose their foothold to people coming into the country and jobs leaving the country. When the Bush family decided it was time to sell off America, they made sure that it would be one of those "rock bottom prices everything must go" deals.

But despite all that, we stll need to get to work and find a way. And we will.

[eridani]

6. Part of that process has to be developing accurate ways of assessing what is going on--

--in the real economy. We don't have that now, and continuing to lie to ourselves is not an option.

[elemming]

4. Depressing

I have come to the conclusion there is nothing in the economy or in government plans to avoid a hyperinflation depression in 5 - 10 years. There is a possibility it comes sooner.

For some detailed reasons for this see Shadowstats, which is an investment service that tracks the real government statistics before they started mucking with them in the Nixon years and it continued under both Republican and Democratic administrations. (He actually says it started with LBJ who jawed the BLS into issuing a more favorable report one time.) At the present time almost no government statistic has not been monkeyed with. There are the systemic revisions that don't make economic sense as well as seasonal things depending on the current politics.

shadowstats Look around for the free stuff.

Article on the unavoidable hyperinflation.

Our real CPI is over around 6% instead of -2% and real unemployment is around 21%.

Real debt is huge - we are much worse off than the rest of the world.

[notesdev]

5. One more bubble to go

that's the Federal debt bubble.

When that one bursts, there's no country left.

Wonder what Ben's exit strategy is?