Top of the News: The debate over whether the economy is showing “green shoots” of revival or the Astroturf of a sucker’s rally has a subtext. It’s whether the collapse will force a fundamental change in business and society, or will things pretty much return to the way they were before?
A fundamental reboot would mean, among other things, the recognition that we’re not going back to the old bubble-based financial economy, that the sprawl housing enterprise of the past six decades is dead and we’ve got a lot of work to do. It includes everything from retrofitting existing suburbia with more transportation choices, reclaiming neglected cities and getting serious about schools and productive economic activity.
The Obama administration seems to be siding with the idea that there will not be a fundamental discontinuity. That we can return to something like Clinton 2.0, and not mess it up this time with banks run amok.
Who’s right? Much will depend on such factors as the trajectory of energy and commodity prices; the health of the banking and shadow banking systems; the disposal of trillions in personal and corporate debt; whether inflation rises to serious levels; what happens to a housing industry geared to bubble levels, and — critically — the ability of the labor market to restart and create family-wage jobs.
That’s a tall order. The elites, and indeed most Americans, may desperately want everything to settle back to 2005, or 1999, but it just may not happen. That can leave us rattling around on the bottom for some time. Hitting bottom and moving sideways isn’t the same as the kind of growth necessary for a recovery.
The Back Story: The Associated Press has an interesting interactive map on the “stress levels” of counties around the country. (I first read about it on Huffington Post, by the way — no Dowdiness for homey). It takes into account unemployment, foreclosures, bankruptcy and the velocity of change. King County’s stress number is 9.26 vs. 19.31 in Las Vegas’ Clark County.
Today’s Econ Haiku:
It won’t be long now
787’s first flight
With a dream aboard