Global Agenda: The real story

There has never been a ‘recovery’ in which so little was recovered by so many, after so much had been lost.

By PINCHAS LANDAU
green globe311 (photo credit: Courtesy)
green globe311
(photo credit: Courtesy)
There are two ways of looking at the world. One is to read the news every day and garnish it with the instant analysis that the mainstream media serve up in ever-larger helpings. That is the way most people follow events, because they have been trained to do so – by the media and by their own habits, which have made them into compulsive news-and-instant-analysis addicts.
Not surprisingly, this trend has generated a backlash that has caused a growing number of people, especially youngsters, to switch off completely from the incessant stream of pseudo news and ersatz analysis. Instead, they tune out all the noise – claiming that by doing so they save their sanity.
Both approaches are understandable reactions and counter-reactions to external stimuli provided by the media. But they are both wrong in the sense that they are counterproductive. Overload on the one hand and going cold turkey on the other are not rational or desirable with regard to virtually any human need, whether physical, such as food, or intellectual, like information.
In the specific context of “news,” most people need to “know what’s going on” at some level and to some degree. Simon and Garfunkel claimed that they got the news they need from the weather report, but most people need more than that. However, getting that “more,” however defined, is increasingly difficult, because there is quantitatively so much more pseudo news available that has to be sifted or screened, and because so very much of this mass is of ever-lower quality.
The second way of looking at the world is by seeking to place current events in a broader perspective. This perspective may be one of time: seeing how whatever the topic is has developed over a period of years rather than days or weeks, and sometimes of decades rather than months. Alternatively, perspective may be spatial: How does the topic in question look when compared or contrasted with other places, whether towns, countries or regions. This whole issue of perspective is very useful with regard to many Israel-related topics – both across time and vis-à-vis other countries. But that is not my concern here.
Rather, these general remarks are by way of introduction to the current crop of news and analysis items relating to the state of the American economy. In essence, what has happened is that a run of better-than-expected economic data has rekindled the hope that “things are improving,” so that: a) there will not be another recession, and b) more positively, the economy is back on track to achieving ongoing growth.
A case in point is the monthly data on unemployment, employment and wages, which were published last Friday and were the best in some time. As is always the case, the data were subject to detailed scrutiny, with the “optimist camp” hailing them as strong evidence that things are indeed improving and will continue to do so, while the “pessimist camp” sought to poke holes in this argument and highlight weak aspects of the data.
This is pseudo news and ersatz analysis at its worst. The monthly data are very interim “facts” that are repeatedly revised. But even that is not the point. When analyzing the American labor market, the real story is not what happened last month or even over the last half year.
Rather, it is the astonishing and appalling fact that total employment in the US economy today is less than it was in 2000, despite significant population growth over that period.
It is that after almost three years of supposed recovery – as measured by GDP, at least – there are still some seven million fewer jobs in the economy than there were before the “Great Recession” of 2007-09; that real wages are not rising; that the jobs being created are almost entirely in the services sectors and are mostly low- or lower-paying; that the inequality of income within the economy is still growing, so that, unbelievably, the share of wages in the national pie is at its lowest level in over half a century, while the share of corporate profits – which accrues to “capital” – is at its highest in almost 60 years.
These are the facts needed to put the news, as represented by the latest data, into more meaningful perspective, looking at developments over the medium- or longer- or very long-term. An alternative perspective could be gained by comparing the American data with, say, those of Germany, where unemployment is at a 20- year low.
The real story of the American economy is not whether there is or is not “going to be another recession,” but rather that in many key respects – the ones that affect most people’s lives and livelihoods – the previous recession never ended. It is not that the recovery is getting stronger or weaker, but that there has never been a “recovery” in which so little was recovered by so many, after so much had been lost.
And, perhaps above all, the real story is less and less about economics, at least as it has come to be defined and studied and practiced, and more and more about society and politics – about what economics is for and whom is it designed to serve.
landaup@netvision.net.il