I didn’t comment yesterday on the BEA’s preliminary report on U. S. gross domestic product for the first quarter of 2014 which was flat. Here are Megan McArdle’s observations:
No, despite the caveats, the fact remains that we seem to be stuck. Six years after the financial crisis, we still haven’t entered anything that could really be called a “recovery.” A recovery would mean some sort of catch-up growth that reabsorbed stranded workers and capital. Instead, we’re barely limping forward, and the most cheerful thing we can say about any of it is that at least we’re no longer falling back.
The reason I didn’t comment is that I don’t much care about GDP. As far as I’m concerned real GDP could be flat for the next decade and I wouldn’t care as long as the economic indicators that I do care about are rising.
Those indicators are real median household income which has declined substantially since 2009 and shows little sign of recovering and job growth which is phlegmatic at best, morally reprehensible, and disastrous for those who’ve been unemployed for so long.
Touting GDP growth (not to mention a rising stock market) in the face of persistent long-term unemployment and declining real household income is an objective endorsement of increasing income inequality. Decrying income inequality on the one hand while hailing slow but steady growth in the economy on the other is incoherent. Cognitive dissonance.