Calculated Risk gives us four indicators the National Bureau of Economic Research uses to call and date recessions and recoveries. They show just how far the economy has fallen since 2007:
These graphs show that no major indicator has returned to the pre-recession levels - and most are still way below the pre-recession peaks.
Real GDP is still 0.4 percent below where it was in 2007. Real personal income (minus transfer payments like unemployment benefits) is still down 5.1 percent from the peak four years ago and was down 11 percent at its worst, which CR says “shows the recession was much worse than originally thought.” Finally, industrial production is still down 7.6 percent, and employment is still down more than 5 percent.
— The Guardian has a great interview with Tom Watson, the member of Parliament who, along with the paper’s Nick Davies, is one of the few heroes in the hacking scandal story.
We get his thoughts on the scandal, of course, and how the influence game was played against him. But most interesting is the brief biographical sketch we get, telling us of his regrets about “the politician Watson used to be, a man happy enough to play his part in New Labour’s often moronic dances with the Murdoch press, and issue shrill messages either aimed at, or inspired by, the red-tops”:
So, he has changed. “I have changed. This has been a profoundly life-changing event for me, in many ways. It’s certainly changed my politics. When I was first elected, I was a completely naive and gauche politician. You look at the pillars of the state: politics, the media, police, lawyers - they’ve all got their formal role, and then nestling above that is that power elite who are networked in through soft, social links, that are actually running the show. Why didn’t I know that 10 years ago, and why didn’t I rail against it? Why did I become part of it? I was 34. I’m 44 now. I was naive. But I’ll never let that happen again.”
Meantime, The New York Times reports on the cash-for-stories culture at the News of the World, which had a cashier window several years ago for that and more recently, a safe in an editor’s office. It also reports that the paper paid at least $200,000 in bribes to the police.
— This one’s a couple of weeks old, but it’s always worth noting good work: Brian O’Connor of The Detroit News had a great column blowing up some of the myths perpetuated in the debt-ceiling debate.
The facts, say economists who steer down the middle of rational analysis, are:
The U.S. deficit isn’t hurting the economy, and a big chunk of the spending behind it is creating what little recovery we’re making.
Future U.S. budget deficits are a problem starting after 10 years or more, largely because of the completely expected aging of the U.S. population and runaway health care inflation.
A balanced budget amendment isn’t the answer, and had one been in place during 2007, the Great Recession would have become the Great Depression II.
And he took apart that staple of dumb budget rhetoric: That governments should balance their budgets like families do.
But even most American families don’t live within the family budget. Instead, they’ve piled up $2.4 trillion in debt as of May — $1 trillion more than the projected deficit for 2011.
“It’s a stupid premise,” says Fieldhouse of the Economic Policy Institute.