If you think this is the weakest recovery America has endured following a recession, you’re right — at least for recoveries since the Great Depression.
An analysis by The Associated Press that was reported Wednesday showed that of the U.S. recessions that were followed by recovery periods that were at least three years, that the recovery that began when the Great Recession officially ended in June 2009 is the worst.
The analysis found many troubling aspects of the current economic situation, including:
— The gross domestic product only grew 6.8 percent from the second quarter of 2009 to the second quarter of this year, less than half of the average 15.5 percent GDP growth for the first three years of the other eight recessions in the comparison;
— Investment in housing is up 8 percent so far in this recovery, less than a quarter of the average growth of 34 percent in postwar recoveries;
— Local, state and government spending and investment have increased 4.5 percent this time, far below the average of 12.5 percent for this point in a recovery;
— Consumer spending has grown 6.5 percent, less than half the 14 percent average rate;
— A number even worse than the consumer spending is job growth, which has resulted in an all-time high 8.3 percent unemployment rate three years into a recovery. During the recession and just after it, the U.S. economy lost a staggering 8.8 million jobs. A little over 4 million jobs have been created since, but that means that 54 percent of the lost jobs are still lost. In the other recoveries, the U.S. economy regained an average of 350 percent of the jobs that had been lost. The AP report noted that after the 1981-82 recession that cost 2.8 million American jobs, the U.S. economy created 9.8 million new jobs — a net improvement of 7 million — by the 36th month of that recovery;
— Almost 5.2 million people have been classified as long-term unemployed (out of a job for six months or longer), accounting for a record 41 percent of jobless Americans. The highest percentage of long-term unemployed before this recovery was 22 percent;
— Pay raises for production and nonsupervisory workers — a category that AP says covers about 80 percent of the private, nonfarm workforce — rose 6.2 percent since June 2009 while consumer prices have gone up 7.2 percent. Adjusted for inflation, wages fell 0.8 percent since June 2009. These records, AP said, only go as far back as 1964, but in those five recoveries, wages had risen an average of 1.5 percent by this point in the recovery.
Why has the recovery been so feeble?
The housing bubble burst has hurt tremendously. A great many Americans saw their single largest investment — their home — plummet in value during the recession, which cut national home equity by nearly half. Home equity was at $13.2 trillion in 2005. It was at $6.7 trillion this year.
And if Americans were inclined to utilize credit, its availability got a lot scarcer after the Lehman Brothers collapse.
Meanwhile, the federal government has been run by increasingly fractious so-called leaders who are more worried about their jobs and their respective party’s dominance than doing anything constructive.
At a time when America needs statesmen — true leaders — we are “blessed” with self-serving politicians in positions of power who, rather than present a road map for the future, resort to trying to make the American voter afraid to cast a ballot for the other party’s candidate. The only “recovery” in full force right now is the campaign spin doctors who are throwing campaign and Super PAC money around like it was being borrowed from China. In fact, the Center for Responsive Politics is estimating that this election cycle, $5.8 billion will be spent on political spending with $2.5 billion of that being spent on the presidential contest.
By the way, that’s a 7.4 percent increase in campaign spending from 2008.
Our political leaders, it seems, can manage to find ways to stimulate the economy ... when they’re properly motivated.
— The Albany Herald Editorial Board