An economist speaking at the Northwest Intermodal Conference in Portland, OR, last month said that the Great Recession is over, and that a sustainable period of recovery and growth is underway. [“Sustainable” … that’s the new buzzword. All the “in-crowd” is using it nowadays.]
“Things come in cycles,” he said. “Growth is followed by decline and decline is followed by growth. The recession was the worst one in 60 years,” he offered, “but there is growth and it’s growth that is ‘sustainable’.” The current recovery is slow, closer to a u-shape, rather than a v-shape, he stated, “but by the end of 2009 it was clear that this growth rate was – [you guessed it] – ‘sustainable’.”
That assessment doesn’t quite square with what’s really happening, however. For example, on June 17th the Labor Department announced that new claims for jobless benefits in the U.S. rose – unexpectedly – for the second straight week. Most economists, as we’ve seen, are pretending that claims for jobless benefits are steadily falling, when, in fact, rising [sustainable?] unemployment is posing a major threat to recovery from the most severe recession in decades.
The economists just mentioned, and others like them, shouldn’t be playing loose with the truth. Why can’t they just be straightforward and admit that an inevitable disaster is rapidly approaching? As of the end of May, 32 states had borrowed almost $ 40 billion from the Federal Government – to make unemployment payments. Is that what they consider growth that’s “sustainable”? The Economic Policy Journal revealed that those 32 states had long since run out of funds to make unemployment benefit payments and that the federal government has been supplying these states to cover the shortfall. At least 12 of those states, the Journal revealed, had already borrowed billions.
In an interview with Detroit Free Press and USA Today just before his “jobs summit” this past December, President Obama said “It’s just not going to be possible for us to have a huge second stimulus, because frankly, we just don’t have the money.” This was just two days after he announced a $ 30 billion per year escalation of the war in Afghanistan.
The president opened that summit by saying that we had to face the fact that our resources are too limited to finance job creation. A disappointment, surely, but not much of a surprise. This year’s announced $ 1.4 trillion deficit tripled the previous year’s deficit, thanks largely to the bank bailout that allocated up to $ 23.7 trillion of future taxpayer monies to the financial sector in the form of cash handouts, loans, debt guarantees and other subsidies. But in a nod to the unemployed, Obama asked that they “be patient” and “keep hope alive”, as his administration pays down the deficit with “unprecedented fiscal austerity” and sharp cuts in “social spending”. And he called for the already poverty-stricken to cut their consumption – of medical care, shelter and food – while he funnels trillions to banks, the military, insurance companies and pharmaceutical corporations. And he wants to institute a national sales tax!
If he feels like instituting something, why doesn’t he simply institute an Emergency Shipbuilding Program as FDR did? That would funnel money to everyone – not just the favored elite.