The business pages of the Boston Globe seldom have deep stories analyzing economic trends. The main healines are reserved for stories about the ups and downs of local and regional businesses and the people who manage them. However, buried in smaller stories are bits and pieces of information that, when put together, give us clues to trends in our dismal economy.
For example, on January 29th, a small A.P. story noted that durable goods orders (things that last a while like refrigerators and televisions) rose only 0.3% in December, far less than the 2% rise predicted by professional economists. Traditionally, when our economy rebounds from a recession, durable goods orders jump as consumers begin spending again. The latest number was a huge disappointment, given that durable good orders fell 20% during 2009. The same article points to the reason – 470,000 people filed claims for unemployment benefits the week before – that is, even as government statistics show the GDP going up, nearly half a million Americans got laid off.
On January 30th, a small A.P. story reported that even if you kept your job during 2009, things got worse. Overall, wages rose an average of 1.5% in 2009, far below the official (doctored-down) inflation rate of 3%. On February 1st, a tiny Bloomberg News article reported that Nouriel Roubini, the economics professor who predicted the financial crisis before most “experts” noticed there was a problem, said that unemployment will remain over 10% even if statistics show the GDP is growing. He said, “It’s going to feel like a recession even if technically we’re not going to be in a recession.”
On January 28th, Michell Singletary wrote about President Obama’s “Middle Class Task Force,” which has, after a year of study, recommended that debts for the Federal college Loan Program be forgiven after the student pays 10% of his or her income for twenty years – a reduction from the current 25 year requirement. This minor change comes from an administration that has fully cooperated with the Bush administration’s handout of more than $600 billion to banks and hedge funds with no requirements for increased business lending, no requirements for renegotiation of mortgages with individuals who are facing foreclosure, and no significant limitations on management bonuses. Highlighting the contrast, an A.P. article on the same day noted that the Federal Reserve reported that lending is still contracting.
I could go on, I clipped out a week’s worth of stories with the same message – the aftermath of the great financial crash of 2008 is not going to be a return to normal. While GDP “growth” might be trumpeted in the news, our friends, neighbors, and family are going to be unable to find jobs and the purchasing power of those who keep jobs will continue to decline. Meanwhile, the Obama administration, moving in slow-motion as it follows the advice of its Wall Street born and bred economic advisors, will only propose tiny changes at the margins, while right-wing Republicans in the Senate will howl about government deficits and bloc even those reforms. We are on our own.