It’s not just psychology. Here are the latest Census numbers analyzed by Sentier Research: Median household income fell 6.7 percent to $49,909 between June 2009 and June 2011 when the economy was allegedly in recovery. That compares with a decline of 3.2 percent to $53,518 during the 2007-2009 recession. The numbers were first reported this morning in the Wall Street Journal.
These stunning numbers show how many people were financially ruined by the crash and that the economy isn’t growing fast enough to repair the damage. Too many are un- and underemployed, underwater on mortgages, foreclosed and/or stuck in jobs where pay is stagnant or has actually been cut. The private debt overhang remains enormous. Is there any wonder there’s anger on the part of Americans across the political spectrum (favorable rating for Congress: 9 percent)?
With no stimulus coming from D.C., the Federal Reserve at odds, the private sector doing little hiring and states and localities continuing to cut back, there’s little reason to expect this trajectory to change any time soon.
As for the better-than-expected 2.5 percent GDP growth in the third quarter, the blogger Econophile offers reasons for caution. Lance Roberts of Streettalk Advisers is still calling recession. After all we’ve been through, there’s more reason than ever to question what the GDP numbers really mean, anyway.
Friday’s Poll: Did the latest Euro-fix avoid another recession? Twenty percent of respondents said yes. Nearly 30 percent said more troubles lie ahead. And nearly 48 percent voted that we’d never left the Great Recession.
And Don’t Miss: Why the eurozone bailout is destined to fail within weeks || The Telegraph
Today’s Econ Haiku:
Not Mister Fix-It
Jon Corzine made MF worse
A bankrupt system