The Other McCain

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Obamanomics: No Jobs, No Recovery

Posted on | June 19, 2010 | 8 Comments

Here’s a handy little chart showing the pattern of job losses in recessions since World War II:

That big red line is the current recession, and Scott Stoddard of Investor’s Business Daily explains:

Job recoveries have been increasingly sluggish over the past several recessions and the current downturn looks to be the longest since at least World War II. . . .
Today’s jobs slump, already at 29 months, could last five years or more, analysts say. Employers are expected to stay cautious amid a sluggish economic recovery.
“It would be strange but not inconceivable” for employment to fall short of its pre-recession peak before the next downturn, said Don Rissmiller, chief economist at Strategas Research Partners. . . .

OK, here come the magic words:

Rissmiller and other economists say a double-dip recession is unlikely. Yet hiring remains painfully slow. Excluding temporary hires for the 2010 Census, the economy has added about 500,000 jobs so far in 2010. The U.S. will need to add about 8 million jobs just to get back to the December 2007 peak, when the recession started.
Excluding the soon-to-disappear Census jobs, employers would need to average nearly 300,000 new jobs a month for the next 27 months just to get to the pre-recession peak by the end of 2012. . . .

Read the whole thing. Everybody keeps saying that a double-dip recession — that is, a “W”-shaped recession, instead of a “V” — is “unlikely.” Right, and if trends turn downward again, I’m sure that will happen unexpectedly.

Speaking of which, what about an unexpected debt crisis?

Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing.
“Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said. . . .
“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”

Don’t worry. I’m sure higher interest rates are as “unlikely” as a double-dip recession. Or the bursting of the Australian housing bubble. Wonder what’s up with gold prices?

UPDATE: Classic Obamanomics: Blame Republicans!

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Comments

  • Joe

    1980/81 recessions being so close, back to back, must have been a small double dip. Granted it is hard to tell trends from that alone, but the 80 job loss was milder than the 1981 job losses.

    Those were the years stradling Carter and Reagan. What did Carter do to get us into that? What did Reagan do to get us out?

  • Joe

    1980/81 recessions being so close, back to back, must have been a small double dip. Granted it is hard to tell trends from that alone, but the 80 job loss was milder than the 1981 job losses.

    Those were the years stradling Carter and Reagan. What did Carter do to get us into that? What did Reagan do to get us out?

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  • H. G. Fielding

    Joe, assuming your question isn’t rhetorical, the 81 recession was caused deliberately. As I understand it, (I was 9 in ’81)Volker hiked interest rates to end stagflation, which in turn caused the economy to slip back into recession. The Republicans paid in ’82, & I doubt we’ll see that kind of political bravery in a President again in our lifetimes.

  • H. G. Fielding

    Joe, assuming your question isn’t rhetorical, the 81 recession was caused deliberately. As I understand it, (I was 9 in ’81)Volker hiked interest rates to end stagflation, which in turn caused the economy to slip back into recession. The Republicans paid in ’82, & I doubt we’ll see that kind of political bravery in a President again in our lifetimes.

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