Just about a year ago, and just after Limbaugh added to his infamous wish list his hope that Obama and our economy would fail, I started writing naïve, optimistic (“optimalistic” I called them) posts grasping at every “green shoot,” chasing every “glimmer of hope,” reaching for every silver lining in the hope that maybe, just maybe, our economy was beginning to recover from the deep and tragic recession we inherited from the previous administration.
I continued to do so for a year, probably magnifying out of proportion every half-decent economic indicator, reporting on every market rally—regardless of how small or fleeting—and ignoring or minimizing negative developments.
While I did acknowledge the reality and the wretched, protracted nature of our unemployment, it was always done with the caveat that unemployment is generally a lagging indicator in a recession.
I am sure that my more knowledgeable co-bloggers cringed every time I wrote one of my “the glass is half-full” stories based purely on hope and optimism, rather than on solid economics.
I am also sure I drove the naysayers, the doom-and-gloom crowd, berserk with my exuberance, assuming they even bothered to read my writings.
Needless to say, I along with so many Americans have had to endure, for more than a year, the ranting by those who have been fixated on, addicted to, bad news about the economy—a phenomenon which Hugo Lindgren called “Pessimism Porn.”
No wonder I was exhilarated when I picked up my current copy of Newsweek.
There, on the front cover, in large, bold, black letters emblazoned by the red and white stripes of our flag, was this week’s cover story:
AMERICA’S BACK!
THE REMARKABLE TALE OF OUR ECONOMIC TURNAROUND
On the inside pages, across from a title page blazoned with a burst of red, white and blue stars and with the words, “The Comeback Country—How America Pulled Itself from the Brink,” the words of the author, Daniel Gross, were music to my ears.
After noting that “In the wake of the 2008 financial meltdown and the deep, long recession that followed, the decline of America has become the preferred intellectual preoccupation of the elite—left, right, and center,” and after recapping some of the causes and symptoms of our economic troubles—including our stubbornly high unemployment—Gross tells us that the glass is indeed half full:
…the long-term decline of the U.S. economy has been greatly exaggerated. America is coming back stronger, better, and faster than nearly anyone expected—and faster than most of its international rivals. The Dow Jones industrial average, hovering near 11,000, is up 70 percent in the past 13 months, and auto sales in the first quarter were up 16 percent from 2009. The economy added 162,000 jobs in March, including 17,000 in manufacturing. The dollar has gained strength, and the U.S. is back to its familiar position of lapping Europe and Japan in growth. Among large economies, only China, India, and Brazil are growing more rapidly than the U.S.—and they’re doing so off a much smaller base. If the U.S. economy grows at a 3.6 percent rate this year, as Macroeconomic Advisers projects, it’ll create $513 billion in new economic activity—equal to the GDP of Indonesia.
Further down in the story, Gross provides additional examples and indicators of economic recovery.
Addressing the naysayers, Gross points to how Ben Bernanke was widely criticized and mocked in March 2009, for his identification of “green shoots” of recovery, but how by the fourth quarter of 2009, the economy was growing at a 5.9 percent rate:
Consider the scope of that swing: the growth rate of a $14.5 trillion economy shifted by 12.3 percentage points in about nine months. Like a massive sailboat pivoting 180 degrees in choppy seas, this wrenching turnaround produced a massive wake, and induced nausea among many of its passengers.
Gross also discusses his theories as to what accounts for the current pessimism and pervasive gloom and what our new economy will look like “once the smoke finally clears.”
Finally, Gross is realistic about our persistent unemployment:
To recoup the 8.2 million jobs lost since December 2007, it’ll take four years of growth at 170,000 jobs per month. And by definition, it’s hard to identify the next transformative economic force—the next steam engine or interstate-highway system.
Except for this significant, depressing problem, I believe that there indeed are some bright “glimmers of economic hope” to be seen. Pity it has taken so much longer than many of us hoped for.
Image: Courtesy Newsweek
Note:
The link to Daniel Gross’ excellent, uplifting story was unintentionally omitted. To read the full article, please click here.
