Map of life expectancy at birth from Global Education Project.

Tuesday, October 04, 2011

Pain, doubt and doom loom . . .

and, to quote Pogo, "Bazzfazz." The Economic Cycles Research Institute joins some other reputable forecasters in foreseeing really, really bad stuff. To wit:

More than three years ago, before the Lehman debacle, we were already warning of a longstanding pattern of slowing growth: at least since the 1970s, the pace of U.S. growth – especially in GDP and jobs – has been stair-stepping down in successive economic expansions. We expected this pattern to persist in the new economic expansion after the recession ended, and it certainly did. We also pointed out – months before the recession ended – that because the “Great Moderation” of business cycles (from about 1985 to 2007) was now history, the resulting combination of higher cyclical volatility and lower trend growth would virtually dictate an era of more frequent recessions.

So it comes as no surprise to us that, with the latest expansion only a couple of years old, we’re already facing a new recession. Actually, such short expansions are hardly unheard of. From 1799 to 1929, nearly 90% of U.S. expansions lasted three years or less, as did two of the three expansions between 1970 and 1981. In other words, such short expansions are unusual only with respect to recent decades.

It’s important to understand that recession doesn’t mean a bad economy – we’ve had that for years now. It means an economy that keeps worsening, because it’s locked into a vicious cycle. It means that the jobless rate, already above 9%, will go much higher, and the federal budget deficit, already above a trillion dollars, will soar.

Okay, we already have people taking to the streets (and why did it take them so long?) but they don't know what they want, except for times to get better and nihilistic greedheads to stop ripping everybody off. But where will our politics go when it just keeps getting worse? That's really worth worrying about.

1 comment:

kathy a. said...

well, here's a piece suggesting that well-paying jobs and lots of them are the answer. and that investors and policy-makers are missing the message about labor being necessary to financial well-being.