Off the Charts

“Through several recessions and recoveries, inflation-adjusted GDP rose almost in tandem with a line of predicted growth expectations. But in November 2007, something changed. Real GDP dropped down from what was expected by more than 11 percent, and, as this summer’s data has shown, it hasn’t returned to its pre-recession trend. The unusual slump has provoked a stream of commentary that attempts to define the problem, but it hardly matters whether the downturn is identified as the second dip of a ‘double-dip’ recession, a continuation of the ‘Great Recession’, a fast-moving slowdown, a slow nosedive, a long-term stall-out, or a confirmation that the economy has entered a Japanese-style ‘lost decade’. Growth during the 21st century is following a different trend line than it did in the 20th, and employment is also responding in new, different ways from earlier post-World War II recessions.”

Levy Institute President Dimitri Papadimitriou writes in Truthout about the uniquely disastrous employment picture that has emerged from this recession.  It is a reminder that, while there is no convincing argument as to why US government debt or deficits are causing any current economic problems, the employment situation represents a clear and present economic danger.  The proportion of political, legislative, and press attention paid the former, compared to the latter, is wildly unjustified by any compelling economic logic.