The New Republic’s Jonathan Chait noticed a similar problem with this one:
I think the interesting question right now is not whether the economy is due for strong growth, but whether and when that growth will create rising living standards. The recovery from the 1991 recession took years before it began producing wage gains. The recovery from the 2001 recession basically never produced real wage gains — essentially all the gains went into corporate profits and gains for the very rich. Moreover, there’s very little consensus as to why that happened. So we have no idea to what extent growth and higher productivity will create conditions that people have any reason to recognize as real growth.
Yeah. Like we said.
But wait. There’s more to this meme-change in-the-making.
Here’s Floyd Norris, in the Times:
The American economy appears to be in a cyclical recovery that is gaining strength. Firms have begun to hire and consumer spending seems to be accelerating.
That is what usually happens after particularly sharp recessions, so it is surprising that many commentators, whether economists or politicians, seem to doubt that such a thing could possibly be happening.
Norris is especially interested in why the White House has been slow to cheer the recovery, pointing out that, even as he sounded optimistic after a recent strong jobs report, President Obama seemed to put the recession in the present tense.
Kevin Drum came up with a useful list of Top Ten “things that gnaw” at him when he reads these optimistic economic pieces. Number 10:
Unemployment and long-term unemployment continue to look terrible. Yes, these are lagging indicators, but still.
Norris knows that employment is a lagging indicator. But he seems to argue that hiring will recover quickly:
Employers can be slow to cut back when business turns down, and slow to rehire when it picks up. It stands to reason that when employers cut back sharply — as happened in this cycle — they will have to rehire faster than if they had been slow to fire, as was true in the two previous downturns.
I hope he’ll check back on that theory.
But I’m most interested in how Norris explains why optimism may be lacking this time around.
Both Republicans and Democrats have good reasons to be negative. Republicans are loath to give President Obama credit for anything, and no doubt grate when he points to his administration’s stimulus program as a cause of the good economic news, as he did in North Carolina.
Democrats would love to give the president credit. But much of the Democratic Party wants another stimulus bill to be passed, notwithstanding worries about budget deficits. Chances for that are not enhanced by the perception the economy is getting better.
Wow. Are our pols purposefully pushing pessimism? That’s something we should read more about.