Economics

The Recovery You Haven't Seen Is Even Less Than Meets the Eye

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You really need to keep up these days. I wasn't aware that there even was an economic recovery, and yet it turns out the recovery is so mature it's already getting a backlash.

In The Washington Post, Neil Irwin offers a rebuke to unnamed experts who are declaring a new boom:

That great March job number, for example, received a short-term boost from temporary Census Bureau hiring and the rebound from February snowstorms, so the underlying employment growth was somewhere around 50,000 jobs—not the 162,000 that made headlines, and far below the 130,000 or so jobs needed to keep up with population growth. The number of people filing new claims for jobless benefits each week has remained stubbornly around 450,000, well above the levels expected in a hiring boom.

And while the stock market is up a lot, it has rebounded from generational lows.

Has there been some redefinition of the word "generation" lately? My dictionary still uses the old "roughly 30 years" standard as the length of a generation. I understand the accepted length of a generation has been falling in this fast-moving age (which makes no sense, given that life spans and average ages for reproduction have been increasing), but even if you define a generation as only 15 years that puts us in the wayback machine to 1995, when the Dow Jones Industrial Average wowed a nation by breaking through the barrier of 5,200. Since the beginning of the current recession, the lowest the DJIA has dipped was 6,627 in March of last year. The previous low point came in September 2002, when the index sank to 7,528. The DJIA's rebound from 6,627 to 11,123 in a little more than a year is as impressive as it is dubious, but it is not a recovery from a generational low even in dog and cat generations.

Newsweek says America's back. Real Americans say it never went away.

Graham family kremlinologists will note that this article completes an alley-oop with the cover story for the current issue of Newsweek, which boldly announces that America's back. That piece, by Daniel Gross, contains much fine material, including:

* Sociological hot buttons of yesteryear: "There will likely be fewer McMansions with four-car garages and more well-insulated homes, fewer Hummers and more Chevy Volts, less proprietary trading and more productivity-enhancing software, less debt and more capital, more exported goods and less imported energy." (Daring prediction on the Hummers, given that the brand has been discontinued.)

* Strawman arguments 401 years in the making: "To hear some critics tell it, things have been going south in this country since the cruel winter in Jamestown, Va., in 1609, when most of the settlers died."

* Now-we've-got-em-right-where-they-want-us triumphalism: "In 2008 and 2009 it took the U.S. just 18 months to conduct the aggressive fiscal and monetary actions that Japan waited for 12 years to carry out."

* Clinton-era bold visions of the future: "Beyond creating jobs for those who built and maintain it, the Internet functions as a powerful platform on which all sorts of new businesses—and ways of doing business—can be rolled out."

* Optimism about an industry where the United States now has only one private-sector player: "A similar dynamic is playing out in the wounded auto industry, in which even small gains in efficiency can produce big economic gains."

Where is all this sunshine coming from? Calculated Risk refers to the old equation for Wall Street analysts: Bearish equals unemployed.

But heck, unemployment's a lagging indicator. Will you start spending already?

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  1. I’ll just let barfman do the honors.

  2. “A similar dynamic is playing out in the wounded auto industry, in which even small gains in efficiency can produce big economic gains.”

    I don’t understand – which auto industry: the private one, or the newly-minted soviet one?

    1. How about the auto industry that includes Nissan, Subaru, Suzuki, Honda, Mercedes, and many others that build autos in the US, employ US workers, have stock owned by US stockholders, and provide significant benefits to US residents. Small gains in efficiency by those companies are a great thing.

      Yeah, that’s the (mostly) private one you mentioned as opposed to the soviet-style one that is an abject failure and a drain on US residents.

  3. The general rule has been you will be in a reccession before you realize it and be out of reccesion before you realize it.

    Is this the case now?

    I have my doubts. This looks to much like save Obama’s congress cheer leading and it is coming from the same cheerleaders who wanted him elected.

    But i could be wrong. I would be happy as hell if all the spending and threatening and bail outs and take overs and epically stupid things Obama has done to the economy ultimately had a small effect and we come out ASP.

    I am not holding my breath.

  4. There will likely be fewer McMansions with four-car garages and more well-insulated homes

    Do people really think McMansions are poorly insulated?

    Do they really think McMansions are more expensive to build then Non-McMansions?

    Also does anyone have a working definition of a McMansion?

    1. I’m still trying to figure out why lots of people owning big homes because they’re better off is some how a bad thing.

    2. A house owned by a wealthy peasant that doesn’t know his place.

    3. I would define McMansions as poorly built, style-less architectural abominations that newly wealthy people often buy because they can. If people are happy living there, then good for them. But there is a lot of atrocious new construction out there. I wouldn’t want anyone to stop you from living in a too large and ugly as shit house, but I will call you an idiot for doing so.

  5. I keep putting my hands into my pockets looking for some hope and instead I just find a little change.

    1. I know what you’re doing in your pockets, mikey! Stop it!

  6. Where is all this sunshine coming from?

    AMERICA’S
    BACKHOLE!

  7. Also does anyone have a working definition of a McMansion?

    I was going to say: over 3000k square feet on less than .5 acre in a subdivision constructed by a single developer/builder.

    Wikipedia weighs in and more-or-less agrees.

    1. There also seems to be a lot of business about replacing older smaller homes with bigger homes on the same lot.

      The term is generally used to denote a home with a larger footprint than an older median home and which is often located in a newer, larger subdivision. It is also used to refer to the replacement of an existing, smaller structure in an older neighborhood with a larger and more elaborate home.

      If this is the case then I think McMansions are a fairy rare thing and probably only found in areas where the supply of land is constrained.

      By the way a two story house with 3000 square feet of floor space is only 40 feet by 40 feet. a .5 acre lot is about 150 ft by 150 feet. I think who ever wrote that Wiki article does not have very good spacial perception.

      1. “a two story house with 3000 square feet of floor space is only 40 feet by 40 feet”

        If you don’t have any walls, chimney or plumbing. Also, to someone (like myself) who lives in a 900 sf house, the “only 40×40′” sounds pretty extravagant.

  8. McMansions are like porn: I knowz it when I seez it.

    My definition is the guy down the street who scraped his lot and built a three story house right up to the curb, not a blade of grass on it.

    1. So McMansion are the new name for Brownstones?

      1. If you built a brownstone on a lot in a suburban neighborhood which used to have a lawn, then yes.

  9. Real or nominal? If nominal, then generational low is just about right.

  10. generational lows is bad wording. Generational shift is accurate if that was the argument they were making, and it most likely is. I’d chalk that sentence up to shity wording. It has been a while since we cut the dow in half in such a short time.

  11. I got a job and it was last year when I went all Democrat and started buying things I don’t need. Now I’ve clammed up. No biggish purchase this year. Part of that is saved up to help billionaires like Meg Whitman be governor of California and I have no apologies.

    1. You should change your handle, then.

  12. Something that no one mentions is that those Census jobs are not only temporary (no benefits), but also PART-TIME. They’re advertised as “20-40 hours a week”, and you’ll be scheduled for time slots “when people are home”– in other words, say 5-9pm on weekdays, and maybe some weekend day hours. Good luck on getting anything close to 40. And they require you to have and use your own vehicle. Hell, even pizza delivery drivers get tips.
    So in those March figures these accounted for 48,000 of the ‘new jobs’. Another 40,000 were with– surprise!– staffing (i.e., temp) agencies. Again, mostly parttime, no benefits, no future.
    This is now becoming the gig economy.

  13. Yet another person at Reason (read: Right wing) who wants America to fail.

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