Tuesday, September 21, 2010

Editorial: Recession is over, but stress is not

If you haven't heard the recession is over, you probably don't read economic news and probably aren't real clear on what "recession" actually means. Most people think it's a synonym for "hard times." This widespread misunderstanding is the entire basis for a whole lot of snarky punditry as well as this editorial. It would help to try to educate on this, assuming the editor understands it himself.

At left is a graph from Japan's "lost decade," which many smart economists see as an example of what we're likely to experience here. This is not your ordinary recession. More on recession types here. Note that the recession is "over" when the numbers turn up again (1993), not when they return to positive territory (still hasn't happened). It's really pretty simple.

As far as the editorial goes, who can disagree that we don't accomplish much by "arguing and blaming each other"? But that's not the editor's real aim. See, once we're coming out of active crisis mode, people naturally start looking around for the factors that caused the crisis, hoping to learn and do better next time.

The editor's "arguing and blaming" is code for what most people see as reasonable research and learning from mistakes. That would be bad for the editor, who's been an unabashed cheerleader for the massive policy mistakes that brought us to this pass: deregulation, profit first, converting personal savings and mortgages to gambling stakes on Wall Street, "free trade" that outsources jobs, crippling public education, defunding government services, ridiculous reductions in taxes on the rich and large corporations, and not least by any means, terrible warmongering.

These errors in judgment and failures of sense will keep us in the economic doldrums for another eight or ten years, if the history of previous structural downturns is a useful guide, and at war with the millions of enemies we've created for generations. But the editor would prefer that we forget about them, not quibble about who was right and who was wrong, just face the future shoulder-to-shoulder and keep digging.

It is vitally important as we approach the midterm election that voters stay engaged and ask serious questions about why we're here and how the candidates intend to apply themselves to rebuilding our economic base, employment and retirement security. Dumping our experience down the memory hole will only ensure a continuing status quo that's bad for everyone but ideological peacocks and the very rich.

10 comments:

Anonymous said...

Many folks have been saying you can't spend your way out of a recession, well that philosophy didn't work in 1929, and it probably won't work now. The preponderance of evidence put forward by economists who have looked at recessions and depressions around the globe over time, is that as counter-intuitive as it seems, to avoid a horrific depression (see 1929)the govt has to take a lead in re-starting true economic growth, and this will cost money. You can't do it forever, and you can't throw money at it willy nilly, but the alternative is alot more expensive.

Mia said...

It's always the same issue, it always boils down to R vs L. (Myself included, sorry about the TP diss, kind of.) So what can we do to support candidates to run, and people to register, as Independents? Should there be a headquarters in Prescott?

Steven Ayres said...

I really don't think it's much use to think in pure left/right terms, and I hope I haven't given that impression. Clinton built the NAFTA agreements before Bush I signed them, Clinton deregulated the derivatives market before Bush pumped it up, and we must never forget that most Dems in Congress supported Johnson's deceptions about Vietnam and voted to allow Bush II's horrific adventure in Iraq.The Rs consistently stood for sensible business practices, clean government and fairness in taxation before they were subsumed by religionists, greedy narcissists and anti-government true believers. The legacy of mistakes all around is huge.

But times of adversity tend to focus us on doing a better job. Personally I don't much care whether a person's got an R or D after their name on the roster, provided they're determined to fulfill their duties (to all of us) in an adult manner and be nobody's fool.

Steven Ayres said...

On your second question, Mia, I'm skeptical that trying to work outside the two-party structure can lead to positive results, given the way the game is rigged. For nonpartisan and third-party candidates to hope for success, we'll first need to modify our electoral system to provide for instant-runoff voting (see Wikipedia). With that in place, a whole world of possibility opens up.

Justin Rains said...

That should happen, in my opinion. The way the two party system works today is part of the problem. Instead of looking at issues themselves, thinking for themselves and making informed decisions themselves, a large majority of people just vote by what letter pops up beside a persons name. And those people merely do the bidding of whatever they're party head wants them to do a lot of the time. By no means is that an all inclusive statement, and it's not meant to be, but it's impossible to have an informed politcal debate these days thanks to good ole party rhetoric.

To effectively be a 'representative' you're supposed to represent the will of the people who elected you, not the five talking heads who merely run the party you're affiliated with. If we can find politicians who will do that, then the system will work the way it was built to work.

Steven Ayres said...

What Justin said, and I'll add that finding smart and true servant leaders isn't that hard, really, rather it's getting them to take on the thankless, poorly paid and deeply frustrating job of representing us that's the real trick. But if we can just raise the percentage a bit, we'll be doing a lot better.

Mia said...

No, you didn't give that impression at all. And I didn't intend my blog to be as naive and simple-minded as it was construed. I should be more specific when I write. (I actually write a lot, and then delete a lot, because as I go, topics tend to get more complicated, and then the blog gets longer and becomes more info up for dissection. Which is fine, but I would rather read and learn than speak too soon.) What I was referring to was the broader problem from your 3rd paragraph on. That is, that we (some of us) tend to not want to dwell on the failures of the party we associate with, and further, tend to keep at the fight instead. Also, I was speaking to what I see on the news and in my circle, that is, those being disappointed in the Left because they aren't seeing immediate results. I am a registered Independent myself, and try to follow politics from a non-biased place. I appreciate your time spent in clarification however (as always), and I will look up instant-runoff.

Steven Ayres said...

I get it. I think it could be instructive to us on the left of the spectrum to watch what's happening on the right in terms of excessive ideological expectations and, ultimately, enforcement of party purity. We should maintain high standards, but not at the risk of losing the middle.

Mia said...

Good advice, but it makes me think of my rigid points, where I vote on principle at the expense of losing. I think instant-runoff is a fantastic idea, and would do something to alleviate that dilemma. I've read about it before, maybe from you, or it sounds like something Nader would support. Actually I just looked that up and it appears it became popular after Nader was considered a spoiler. So after a little reading, what do you think of "range voting"? (See rangevoting.org) They seem to make a good case.

Steven Ayres said...

Range voting seems like a smart evolution of the concept that makes a lot of sense.