The Economist warns that the developed economies have not recovered much during the recovery:
THE struggle has been long and arduous. But gazing across the battered economies of the rich world it is time to declare that the fight against financial chaos and deflation is won. In 2015, the IMF says, for the first time since 2007 every advanced economy will expand. Rich-world growth should exceed 2% for the first time since 2010 and America’s central bank is likely to raise its rock-bottom interest rates.
However, the global economy still faces all manner of hazards, from the Greek debt saga to China’s shaky markets. Few economies have ever gone as long as a decade without tipping into recession—America’s started growing in 2009. Sod’s law decrees that, sooner or later, policymakers will face another downturn. The danger is that, having used up their arsenal, governments and central banks will not have the ammunition to fight the next recession. Paradoxically, reducing that risk requires a willingness to keep policy looser for longer today.
I think they’re far too sanguine about the U. S. economy and to understand what’s happened you need to descend below the 50,000 feet view and look at things on a county by county basis. Some counties have not only recovered but prospered. Others have recovered. A lot of counties are still waiting for an economic recovery.
I don’t even think county by county catches the full flavor of things, though it’s better.
Lots of sad little counties out there, I’ll agree, but it’s likely wrong to blame all their ills on what went wrong in 2007 and 2008 and how the Feds reacted to it. I drove back and forth against the country back in 1989 and even then you could see the small towns dwindling down and industries abandoning cities.
Yeah, little counties like Cook, Lake, and Will. I’m not exactly talking about rural America.
The unemployment in Cook County is 6.2% (6.9% in Chicago). In March 2014 it was still as high as it had been at its worst during the recession of 2002. In July of 2013 is was still as high as it ever got during the recession of 1992. And that doesn’t even take into account the dramatic change in labor force participation. If the LPR were the same now as it was in 2007, the unemployment rate would be well into double digits here.
Recovery is not distributed evenly across the country.
“Recovery is not distributed evenly across the country.”
I’ll say. I’ve written about South Florida. What recession? NYC metro is fine. Sounds like San Fran is fine. Of course DC. It would really be interesting to understand the key drivers. I’ll bet it’s more uneven than generally recognized.
Well, for one thing state capitols are fine. As is the nation’s capitol.
Without the asset inflation induced by QE, NYC would probably be in a state of revolt. Of course they’re happy. They’re the primary beneficiaries of the last six years of policy.
Tee-he. I love posing questions I already know the answer to.
Now here’s something people just hate to talk about or acknowledge. So we supposedly have a problem with wages. Income inequality. What do people who have better things to do with their money do too much of with it? Spend it on entertainment provided by the upper 1%. Or the products they endorse. That’s choice, not “life’s lottery.”