Friday, January 15, 2010
Why this Recovery is a Recession
8:20 PM | 
Posted by
Angel
Why this Recovery is a Recession
Fact: Unemployment rate rises to 9.8 percent as 263,000 jobs are cut
-AP News
Fact: -5.3% change in real annual earnings 2000-2008 for full time worker males with a
Bachelors (18-24), and -1.2% change for females with a bachelors (18-24)
-Michael Mandel: “Yet More on Young College Grads” Businessweek
Fact: Newsweek’s August 3rd cover featured a balloon with the lettering “The Recession is Over! But good luck surviving the recovery!” Then not to skip a beat, the illustrious Harvard Business Review (even the ink on its pages wreaks of prestige) takes the cake with an article in its July/August 2009 edition titled: “Constant Change: Leadership in a Permanent Crisis.” Without even bothering to tackle the thorny depths of what permanent change really means one thing is certain-this is no recovery with any sort of confidence with the people that really matter: Main Street America.
Main Street America is America. This is not a matter of speculation, it is an indefensible fact of what a country is-the people, not the territory. People make the country. When America feels no confidence in its economic direction, one can only wonder when people will stop giving authorities the benefit of the doubt simply because they have authority. In today’s case the nation is obviously still hurting too badly to have any sort of confidence in its economic future. Go to the sort of ‘job fairs’ they have in Chicago these days if you really doubt this.
Others may argue that this is just a pessimistic message and I counter that it is not. Stating the obvious is not pessimistic. What is lacking now is real legitimacy. Authorities that are continually optimistic while the country thinks otherwise do not state reality. When real earnings for male college grads have slipped for the whole decade, among rising unemployment and other facts, the legitimacy behind the data that Newsweek and other major news outlets have used: a rising stock market, do not hold legitimacy because the numbers do not reflect the reality for Main Street America.
The Stock Market fell precisely because the proper fundamentals behind the numbers-business/finance fundamentals-were not practiced. Banks that give out loans to customers that cannot repay their loans are not practicing fundamentals. Fortune 500 companies that regularly practice accounting fraud are simply not practicing fundamentals. So what must be argued is that, while the Stock Market might show improvement because of proper fundamentals, it also might not. This is not a contradiction when the Stock Market is understood for what it is instead of what Wall Street wants it to be. The Stock Market is there for the public trading of corporate stock (hence stock market, a market for stocks). The scrolling stock numbers are just indexed summaries of trading. Remember what Enron taught us in the 1990s, that the valuations behind a company’s stock may reflect fraud or simple hubris.
This is not to say that American business is wholly bad, American business is the reason why America owes its high living standards. However, Corporate America since the 1980s onwards has had long history of largesse and corruption. If you need any proof of that observe the psychological biography of Corporate Elitism in the book Den of Thieves, by James Stewart or The Smartest Guys in the Room, by Bethany McLean. That one bank, corporation, or accounting firm after another for the last twenty years has been indicted or bankrupted by corrupt men is not surprising. It happens when Main Street America does not exercise rational scrutiny in the lords of the land: Main Street’s employers. Until we exercise some scrutiny into the logical grounds of how authority figures declare a recovery when the rest of us feel stuck in a recession, we will continue to have recessions that are recoveries.
Fact: Unemployment rate rises to 9.8 percent as 263,000 jobs are cut
-AP News
Fact: -5.3% change in real annual earnings 2000-2008 for full time worker males with a
Bachelors (18-24), and -1.2% change for females with a bachelors (18-24)
-Michael Mandel: “Yet More on Young College Grads” Businessweek
Fact: Newsweek’s August 3rd cover featured a balloon with the lettering “The Recession is Over! But good luck surviving the recovery!” Then not to skip a beat, the illustrious Harvard Business Review (even the ink on its pages wreaks of prestige) takes the cake with an article in its July/August 2009 edition titled: “Constant Change: Leadership in a Permanent Crisis.” Without even bothering to tackle the thorny depths of what permanent change really means one thing is certain-this is no recovery with any sort of confidence with the people that really matter: Main Street America.
Main Street America is America. This is not a matter of speculation, it is an indefensible fact of what a country is-the people, not the territory. People make the country. When America feels no confidence in its economic direction, one can only wonder when people will stop giving authorities the benefit of the doubt simply because they have authority. In today’s case the nation is obviously still hurting too badly to have any sort of confidence in its economic future. Go to the sort of ‘job fairs’ they have in Chicago these days if you really doubt this.
Others may argue that this is just a pessimistic message and I counter that it is not. Stating the obvious is not pessimistic. What is lacking now is real legitimacy. Authorities that are continually optimistic while the country thinks otherwise do not state reality. When real earnings for male college grads have slipped for the whole decade, among rising unemployment and other facts, the legitimacy behind the data that Newsweek and other major news outlets have used: a rising stock market, do not hold legitimacy because the numbers do not reflect the reality for Main Street America.
The Stock Market fell precisely because the proper fundamentals behind the numbers-business/finance fundamentals-were not practiced. Banks that give out loans to customers that cannot repay their loans are not practicing fundamentals. Fortune 500 companies that regularly practice accounting fraud are simply not practicing fundamentals. So what must be argued is that, while the Stock Market might show improvement because of proper fundamentals, it also might not. This is not a contradiction when the Stock Market is understood for what it is instead of what Wall Street wants it to be. The Stock Market is there for the public trading of corporate stock (hence stock market, a market for stocks). The scrolling stock numbers are just indexed summaries of trading. Remember what Enron taught us in the 1990s, that the valuations behind a company’s stock may reflect fraud or simple hubris.
This is not to say that American business is wholly bad, American business is the reason why America owes its high living standards. However, Corporate America since the 1980s onwards has had long history of largesse and corruption. If you need any proof of that observe the psychological biography of Corporate Elitism in the book Den of Thieves, by James Stewart or The Smartest Guys in the Room, by Bethany McLean. That one bank, corporation, or accounting firm after another for the last twenty years has been indicted or bankrupted by corrupt men is not surprising. It happens when Main Street America does not exercise rational scrutiny in the lords of the land: Main Street’s employers. Until we exercise some scrutiny into the logical grounds of how authority figures declare a recovery when the rest of us feel stuck in a recession, we will continue to have recessions that are recoveries.
Labels:
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corporate,
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rationality,
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