I
have been a fraction off in keeping my readers informed on the nature
of the economy. I have been living in San
Francisco where business was steady in late '08 and started growing in
'09 for the entire year. I called the rise in the stock market
correctly in February '09 and the turn around of the economy at the
same time.
One of my errors was looking at the GDP in current
dollars. The economic peak was August of '08 and the
bottom was February '09. The drop was no greater than 3%. Insignificant
by historic standards.
Trouble is, when we adjust for inflation, the downturn began in June '08 and lasted to the same February '09. The drop, inflation adjusted was 4%, still not much.
I came across these chart in Forbes which calls to my attention what we all know, that employment fell off more than in the past and has risen much slower than in past recessions. Particularly slow for younger people, those with only high school educations, men and blacks.
That tells me what I have been saying for some time. We are now reaping the rewards of astounding increases in productivity that occurred in the past 15 years, which is why people with fewer skills are the ones who were laid off first and are being replaced last.
The Forbes chart on fixed capital investment says two things: the major productivity gains occurred in the past 15 years, there aren't many fresh new ones immediately available.
And, most importantly, the Federal stimulus package, which passed in mid-February 2009, passed after the bottom of the recession had happened.... certainly the economy used Federal dollars to compete with private dollars. In short and in plain English, which we don't hear from the current liars in Washington, the stimulus package made the economy worse and the labor market much worse.
Trouble is, when we adjust for inflation, the downturn began in June '08 and lasted to the same February '09. The drop, inflation adjusted was 4%, still not much.
I came across these chart in Forbes which calls to my attention what we all know, that employment fell off more than in the past and has risen much slower than in past recessions. Particularly slow for younger people, those with only high school educations, men and blacks.
That tells me what I have been saying for some time. We are now reaping the rewards of astounding increases in productivity that occurred in the past 15 years, which is why people with fewer skills are the ones who were laid off first and are being replaced last.
The Forbes chart on fixed capital investment says two things: the major productivity gains occurred in the past 15 years, there aren't many fresh new ones immediately available.
And, most importantly, the Federal stimulus package, which passed in mid-February 2009, passed after the bottom of the recession had happened.... certainly the economy used Federal dollars to compete with private dollars. In short and in plain English, which we don't hear from the current liars in Washington, the stimulus package made the economy worse and the labor market much worse.