Recovery? What Recovery? There Is No Recovery!
Edward Lazear, economics professor at Stanford University agrees with Mort Zuckerman’s assessment of the Obama economic policy failure, and is one of the sources for figures cited by Mr. Zuckerman, From Professor Lazear’s interview with CNBC’s Larry Kudlow comes this bomb:
The problem is, this is not a recovery at all. We haven’t made up for the lost ground, and that’s unprecedented.
Not a recovery at all? That’s a pretty harsh judgement, indeed. From Professor Lazear’s recent WSJ Op-Ed:
How many times have we heard that this was the worst recession since the Great Depression? That may be true—although the double-dip recession of the early 1980s was about comparable. Less publicized is that our current recovery pales in comparison with most other recoveries, including the one following the Great Depression…
The current recovery began in the second half of 2009, but economic growth has been weak. Growth in 2010 was 3% and in 2011 it was 1.7%. Who knows what 2012 will bring, but the current growth rate looks to be about 2%, according to the consensus of economists recently polled by Blue Chip Economic Indicators. Sadly, we have never really recovered from the recession. The economy has not even returned to its long-term growth rate and is certainly not making up for lost ground. No doubt, there are favorable economic numbers to be found, but overall we continue to struggle…
Growth rates of 1.7% to 2% don’t even cover inflation, never mind any sort of serious economic growth.
It would be difficult to argue that government polices over the past three years have enhanced confidence in the U.S. business environment. Threats of higher taxes, the constantly increasing regulatory burden, the failure to pursue an aggressive trade policy that will open markets to U.S. exports, and the enormous increase in government spending all are growth impediments. Policies have focused on short-run changes and gimmicks—recall cash for clunkers and first-time home buyer credits—rather than on creating conditions that are favorable to investment that raise productivity and wages.
There are some positive developments. The labor market is improving, albeit slowly. Profits remain high and the stock market has enjoyed some recent success. We can hope that these indicate better times and higher growth ahead. But unless we move to a set of economic policies that are aimed at growing the economy rather than at promoting social agendas, this may be the first “recovery” in history that fails to see us return to long-term average growth.
Hard to argue with Lazear when the numbers he cites come from the Obama administration itself. We are three years into the so-called “recovery” according to the oft-cited NBER, but the economy is essentially no better than it was three years ago. Lazear is correct. There’s been no recovery.Tags: Barack Obama, Domestic Issues, Economy