Sunday, June 14, 2009

Time Magazine Cover Story: Deja Vu All Over Again

If America's economic landscape seems suddenly alien and hostile to many citizens, there is good reason: they have never seen anything like it. Nothing in memory has prepared consumers for such turbulent, epochal change, the sort of upheaval that happens once in 50 years. Even the economists do not have a name for the present condition, though one has described it as "suspended animation" and "never-never land."

The outward sign of the change is an economy that stubbornly refuses to recover from the recession. The current slump already ranks as the longest period of sustained weakness since the Great Depression. That was the last time the economy staggered under as many "structural" burdens, as opposed to the familiar "cyclical" problems that create temporary recessions once or twice a decade. The structural faults represent once-in-a-lifetime dislocations that will take years to work out.

Among them: the job drought, the debt hangover, the banking crisis, the real estate depression, the health-care cost explosion and the runaway federal deficit. "This is a sick economy that won't respond to traditional remedies," said Norman Robertson, chief economist at Pittsburgh's Mellon Bank. "There's going to be a lot of trauma before it's over."

~Time Magazine cover story "The Long Haul" (click to see the date of the article, excerpts above were modified slightly).

8 Comments:

At 6/14/2009 11:39 PM, Anonymous Benjamin Cole said...

I sure hope a recovery is happening, but....a bunch of employment figures, which in the past have been leading indicators, are still gloomy. Temporary help demand, new unemployment claims...it still look bad for employment, and I gotta think real economic output for a while. The aggregate weekly hours index.
Time magazine is trying to sell magazines, so of course they say this a 50-year event. They would say it is a 100-year event if it sold well.
Still, Time is tapping into a deep sense of dread that ordinary people feel. The days of getting a job at a big company, keeping your nose clean, and doing well, are over.
We live in a democracy. People may vote their fears. Word to the wise.

 
At 6/15/2009 7:36 AM, Blogger Mark J. Perry said...

Benjamin Cole: Check the date of the article, it's NOT about the current situation.

 
At 6/15/2009 9:13 AM, Blogger Marko said...

I remember the last recovery, it was billed as the "jobless recovery." There was a Republicant in the white house so the press had to find anything wrong with the recession they could. Once jobs started to be created, we were told that they were not good jobs. Funny how we are not hearing about the "quality" of the "stimulus" jobs that are supposedly being created by a Demoncrat administration.

I am surprised they were so gloomy about the 1992 recession (although according to the press every recession signals a failure of capitalism), but I guess since they pinned that one on Reagan, it was ok to say the sky is falling.

Speaking of Chicken Little, remember that the original moral of the story was that by fearing an imaginary danger (such as global warming, repeat great depression, terrorists losing civil liberties), CL was missing the very real and obvious danger in front of him and was eaten by Foxy Loxy (Socialism, Iranian Nukes, Kim Jung Ill).

 
At 6/15/2009 10:32 AM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/15/2009 10:44 AM, Anonymous Αμάτι Nώνυμος said...

"
NOT about the current situation.

6/15/2009 7:36 AM
"

You should be selling Auction-Rate Insecurities on Wall Street. My word, man, you could easily make another fortune.

G' Day Mate

A

 
At 6/15/2009 11:59 AM, Blogger Scott Grannis said...

I think Mark's point is very well taken. More than one year after the recession of 1990-91 ended, people still thought the economy was in dreadful shape. Instead, as we now know, it was already growing and the boom years of 1996-1999 were just around the corner. Popular opinion almost always lags economic reality.

 
At 6/15/2009 1:11 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/16/2009 7:30 AM, Anonymous Anonymous said...

Professor Perry should go back and dig up his old blog posts from a year or two. Most of them are optimistic, slanted and guess what - wrong about the economic mess we are currently in.

 

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