“The American people are enduring the highest unemployment rate since the Great Depression, stagnating living standards, an economy slow to create jobs, a government saddled by gigantic deficits, and a sense that our politicians, including our president, are not loading the bases for a great recovery. Our politicians remind us of what the Peanuts cartoon character Linus said to Lucy after she asked him why he polished only the fronts of his shoes: ‘I’m interested only in what people think of me as I enter the room.’
“We waste vast amounts of money on subsidies for housing, agriculture, and health, many of which distort the economy and do little for long-term growth, while we spend too little on science, technology, innovation, infrastructure, and education. Who would have imagined that the credit rating of the United States would be put on financial watch by Standard & Poor’s? Or that a country of pioneers and self-made men would evolve into a culture of entitlement, where special interest groups take bite after bite out of the total national wealth through special appropriations, earmarks, tax breaks, and other favors that are all easier to initiate than to end?…
“These are grave anxieties, and yet it would be un-American to lose hope entirely. Of all Alexis de Tocqueville’s judgments, none was truer than this one: ‘The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.’ To which I would add: Make haste with the repairs.”
“Myth No. 1: This is a temporary blip, and then it’s full steam ahead
“True, only 12.2% of economists surveyed in the past few days by the Philadelphia Fed believe that the current backsliding will develop into a double-dip recession (though that percentage is up significantly from the start of the year). Avoiding a double dip is not the same as creating growth that’s strong enough to revive the job market. In fact, there’s an unfortunate snowball effect with growth and employment when they are weak. It used to take roughly six months for the U.S. to get back to a normal employment picture after a recession; the McKinsey Global Institute estimates it will take five years this time around. That lingering unemployment cuts GDP growth by reducing consumer demand, which in turn makes it harder to create jobs. We would need to create 187,000 jobs a month, growing at a rate of 3.3%, to get to a healthy 5% unemployment rate by 2020. At the current rate of growth and job creation, we would maybe get halfway there by that time…
“And let’s not forget the youth-unemployment crisis. There’s now a generation of young workers who are in danger of being permanently sidetracked in the labor markets and disconnected from society. Research shows that the long-term unemployed tend to be depressed, suffer greater health problems and even have shorter life expectancy. The youth unemployment rate is now 24%, compared with the overall rate of 9.1%. If and when these young people return to work, they’ll earn 20% less over the next 15 to 20 years than peers who were employed. That increases the wealth divide that is one of the root causes of growing political populism in our country. While Republicans have pushed back against spending on broad government-sponsored work programs and retraining, it would behoove the Administration to keep pushing for a short-term summer-work program to target the most at-risk groups.
“But these are stopgaps. The real solutions, of course, are neither quick nor easy — making them especially challenging for Congress.”
“Brownstein goes on to report that what economists call the ‘idleness rate’ is rising. ‘The share of Americans younger than 24 neither at work nor in school has steadily increased since 2007,’ he writes. ‘That disconnection creates the risk of what Harvard University labor economist Lawrence Katz calls ‘a lost generation.’
“This is but one manifestation of how our prolonged economic crisis is having far-reaching social effects. We are in the process of changing habits and patterns that will alter our country in fairly profound ways. And what’s most worrisome of all is that there’s no evidence that our economy is turning around. As Daniel Henninger of the Wall Street Journal puts it, in terms of economic policy, the Obama armory is empty. ‘From within the exclusively demand-side context of the president’s economic policy,’ he writes, ‘there are no more bullets in the carbines. This president is now virtually defenseless against the inexorable forces of the U.S. economy.’…
“Our economy is getting weaker rather than stronger. The trajectory is down rather than up. And the ramifications of all this may well be with us long after Mr. Obama has left the presidency.”
“Johnson, a 23-year-old college graduate with a new accounting degree in hand, is an intern at a commercial real estate firm. He would like something more permanent. But many of his college friends aren’t finding work, either, and he’s counting on a breakthrough in the economy.
“‘We have to do something different,’ he said, pausing at a downtown street corner on a sweltering afternoon.
“Johnson supported libertarian-leaning Republican Ron Paul, a Texas congressman, for president in 2008, but he’s now open to giving Obama a try.
“‘I feel like there’s better out there, but, honestly, I’m not seeing the better right now,’ he said. ‘So he may be the best we have.'”
“The Bureau of Labor Statistics reports that the median period of unemployment is now nine months — the longest it’s been since they’ve been tracking the numbers. Long-term unemployment is worse than in the Depression. Life goes slowly waiting for a fast-food job to open up.
“This is Main Street, Obamaville: All bumps, no road. But shimmering on the distant horizon, beyond the shuttered diner and the foreclosed homes, is a state-of-the-art electric car, the new Fiat Mirage, that should be wheeling into town in a half-decade or so provided it can find somewhere to charge. ‘We will be able to look back and tell our children,’ declared King Barack the Modest of his own candidacy in 2008, ‘this was the moment when the rise of the oceans began to slow.’ Great news for the oceans! Meanwhile, back on dry land, a quarter of American mortgages are ‘underwater’ — that’s to say, the home ‘owners’ owe more than the joint is worth. In Harry Reid’s Nevada, it’s 63 percent. Perhaps Obama’s Aquatic Bodies Water-Level Regulatory Authority, no doubt headed by Jamie Gorelick or Franklin Raines or some other Democrat worthy, could have its jurisdiction extended to the Nevada desert.
“‘Hope’? ‘Change’? These are the good times. What ‘change’ are you ‘hoping’ for in Obama’s second term? The loss of America’s triple-A credit-rating? The end of the dollar as global currency? Or just a slight upward tick in the same-old-same-old multi-trillion dollar binge-spending?…
“The American Dream, 2011: You pay four bucks a gallon to commute between your McJob and your underwater housing to prop up a spendaholic, grabafeelic, paramilitarized bureaucracy-without-end bankrupting your future at the rate of a fifth of a billion dollars every hour.”
“President Obama on Saturday continued to make his case for patience about the economic recovery following a spate of disappointing news last week that suggested a turnaround wasn’t as close as expected…
“‘It’s going to take time,’ he said, arguing that the recession didn’t happen overnight and won’t end that way, either.”