The GDP figures, revised or not, are ever-more disconnected from the lives of most Americans. Truth-and-bone can be found in such stats as the per-capita income last year. It dropped 2.6 percent nationally to $39,138; in Washington the decline was 2.3 percent to $41,751. Elsewhere in the Northwest: Oregon down 1.9 percent and Idaho down 4.1 percent.
Another more realistic assessment comes today from the Bureau of Labor Statistics. Unemployment in February was little changed any state and in some it got worse. Virginia, California, Maryland, Pennsylvania and Texas recorded the worst month-over-month increases. Year-over-year, as has been reported, Washington’s 9.5 percent compares with 8.1 percent in February 2009.
Partisans can make of this what they will, as in: Its a sign of the Obama administration’s failure on the economy. True, the administration has not undertaken the kind of ambitious infrastructure projects, such as really building high-speed rail, as well as rebuilding our national passenger rail system and retrofitting the suburbs with transit, that would create massive amounts of good jobs.
But the numbers show the true depths of the recession Obama inherited. The private sector is not hiring, despite three decades of tax cuts, loopholes and favorable regulatory treatment for big business. And the fiscal crises in the states, where budgets are being slashed as conservatives would like to do in D.C., are making unemployment worse and pushing recovery even further off. Finally, the hollowing out of the American economy had been concealed by Fed bubbles and leverage-based massive sprawl building that aren’t coming back. So the rebuilding of a real, productive economy will take time and new policies.
The Back Story: MIT Professor Simon Johnson argues convincingly that the “resolution authority” in the financial reform package to wind down TBTF banks in trouble is meaningless.
“How would any administration put a huge bank into any kind of ‘resolution’ (a FDIC-type bank closure, scaled up to big banks) when it knows that doing so would trigger default across all the complex pieces of this multinational empire?”
Too big to fail = Too big to exist.
Today’s Econ Haiku:
A deal to cut nukes
If only we could be safe