Skip to comments.America’s Creeping New Normalcy: Sluggish growth and high unemployment are now just accepted
Posted on 02/05/2013 6:40:39 AM PST by SeekAndFind
The Japanese have said Enough. After a generation of stagnation, theyve chosen an all-of-the-above policy to boost economic growth. The nations new prime minister, Shinzo Abe, is promising a three arrows strategy: bold monetary easing, increased public-works spending, and structural changes, such as regulatory reform. Hes throwing the ramen against the shoji and hoping something will stick. Some of those ideas are good ones, some probably arent. But its clear that Tokyos priority is growth, growth, growth. Time to get Nippon moving again.
Nations probably never choose decline, at least not consciously. More likely they become victims of a creeping normalcy. Things once objectionable can become passively acceptable if they happen slowly, incrementally: the boiling-frog syndrome. Decline just sort of happens, year by year, decade by decade, one meh economic report at a time.
Last Thursday the U.S. Commerce Department reported that fourth-quarter GDP fell at a 0.1 percent annual rate. For the year, the U.S. economy grew a meager 2.2 percent. Thats a bit better than 2011, but about a percentage point less than what most economists think is the economys current potential. Even worse, the first few recovery years after deep downturn typically exhibit abnormally strong catch-up growth. But thats not happening postGreat Recession. White House spokesman Jay Carney conceded the obvious, that the negative quarterly report was not good news, and then blamed congressional Republicans for creating a headwind of political uncertainty.
The next day the Labor Department reported the unemployment rate ticking up to 7.9 percent in January as the economy added 157,000 net new jobs. At that rate of job creation, with all else equal, the economy wouldnt return to 4.4 percent unemployment the George W. Bush administrations low point for another eight years. Oh, and thats assuming no recessions between now and 2021. White House economist Alan Krueger said the report provided further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression.
It must be terribly inconvenient for the Obama White House to be reminded every quarter and every month that the $800 billion stimulus and subsequent mini-stimuli failed to ignite the boom Obama economists repeatedly predicted through the first term. The president has so many higher priorities, after all: immigration reform, gun control, climate change, income inequality. Stuff with which to build a legacy.
Faster growth and faster job creation apparently dont make the cut. A president deeply concerned about growth would perhaps have followed a few more of the recommendations of his own Jobs and Competitiveness Council before letting it expire, as Obama did last week. Sure, Obama acted on agenda items that comfortably synced with his ideology, like retrofitting government buildings for energy efficiency. But he ignored commonsense ideas that didnt mesh, such as expanding domestic oil and gas drilling and revamping the corporate tax code. More high-skill immigration? Sorry, it will have to wait for comprehensive immigration reform.
Michael Darda, chief economist at MKM Partners, points out that it will require a multiyear period of above-trend growth to return unemployment to more normal levels. He speaks of the jobs gap, the difference between current employment levels and what they would be if a few years of catch-up economic growth had reestablished the pre-recession trend. Assuming annual private-sector employment growth of 2 percent, the average of the past three decades, were 14 million jobs short. And because catch-up growth never happened say, a few years of averaging 5 percent growth, as happened after the 198182 recession even if the economy returns to steady 3 percent growth, GDP levels will be trillions lower in the future than they would have been otherwise, due to the lower starting point.
But right now output growth and job growth arent even back to trend. And that means every month the output and jobs gaps grow a bit wider. With an economy that hasnt hummed since the 1990s, weve already had one lost decade. If we begin to accept and acquiesce to the creeping new normalcy, America risks suffering its own lost generation. Someone right now needs to say Enough and then back up those words with action. It would be helpful if that person were Obama.
James Pethokoukis, a columnist, blogs for the American Enterprise Institute.
But I expect a turnaround sometime. And no, I don't trust the Rovians to deliver prosperity. My hope is in the Tea Party's eventual victory, and the unleashing of our great oil and gas resources.
“Hes throwing the ramen against the shoji and hoping something will stick.”
Ok. Now THAT is funny!
“It would be helpful if that person were Obama.”
Oh, sure. That’s gonna happen any minute now. *SIGH*
The majority of Americans are both leftist and stupid. If the Obama media doesn’t present an issue to them as something important, complete with the constant references, the American public is just too stupid to worry about it.
Bring back American jobs!
Using the words leftist and stupid in the same sentence is redundant.
I am in the same boat, God bless you and your family and keep your head held high, we live in a world where up is down and down is up, the elites have freely pilfered this nation on the backs of hard working, honest Americans while the Democrats and RINOS play games with our lives!
Instead of looking at a “turnaround”,
you’d best be preparing for a crash and
the rebuilding afterwards.
After the first six or eight unsolved Whitechapel murders (London, 1888-1891), a brainless Scotland Yard inspector might have said, "Someone right now needs to say 'Enough' and then back up those words with action. It would be helpful if that person were Jack the Ripper." Unfortunately, counting on Obama to stop destroying our country is like counting on a serial killer to realize his actions are hurting others and stop on his own. We just have to suck it up for four more years and hope the Obama voters learn from the misery they inflict on themselves.
The country and the media are run by the top 10%, those with household incomes over about $115K a year. They’re doing fine, they don’t care much about the unemployed. Everybody they know has money and a job.
This “new normal” is accepted because the consequences of unemployment have become so minimized. Lose your job? No problem.. 99 weeks of unemployment checks. Can’t afford medical care? No problem.. get the taxpayers to pay for it. Can’t afford a cell phone? No problem.. we have ObamaPhones. Can’t afford to buy groceries? No problem... join up with the ever-growing ranks of food stamp recipients.
And on and on it goes. With everything now subsidized by the federal government, why should a 7.9% unemployment figure be troubling?
I fear the only wear we will break out of this morass is if some heretofore unknown incident occurs to jar the frogs currently enjoying the rising temperature of their nice warm bath.
We are on a path to certain destruction. Just below the threshold middle class is struggling mightily to keep up with declining wages and increasing prices. At some point she's gonna blow.
Next step is to get the Low Information Voter to embrace the European work ethic (30 hour weeks, lots of mandatory paid time-off, etc.)
Things are so bad that any day without a catastrophe is deemed a good day.
The “new normal” is always “just around the corner.” We just have to navigate around those mean Republicans who keep blocking our way.
“More likely they become victims of a creeping normalcy.”
Creeping socialism complete with linguine-lipped lexicon artists. The permutations of their propagandists go on to QE infinity while they enjoy the fruits of our labor.
One thing is for certain...
Socialism Is Legal Plunder - Bastiat
Hello Washington Post... and New York Times.
The New York Times would ‘accept’ citizens being shot dead by drones as long as dems were working the controls. They'd support a secret prison under the White House growing flies in dead bodies... no problemo...(not that they are...)
The MSM would hand out passes until a Republican’s in office - then the New York Times would chafe at someone wanting to know what library books they read. Hello suckups at the New York Times...do you have any principle beyond hunger?
“And on and on it goes. With everything now subsidized by the federal government, why should a 7.9% unemployment figure be troubling?”
But... 7.9% may only be “the new normal” for _now_.
Twenty years off, we may see the “unemployment norm” to be 12-15%, or even higher...