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.