April 10, 2010
DEBATING THE ECONOMIC RECOVERY: IS IT REAL?
Since the Labor Department released the March employment report, which delivered the first substantial gain in nonfarm payrolls since the recession began in December 2007, the debate about the strength of the economic recovery has gone into overdrive. A selective sampling of the conversation...
• Harvard’s Jeff Frankels asserts that the recession is history. “The last piece has fallen into place, with the BLS announcement that employment rose in March.”
• And there are corroborating signs of growth from various corners. A few of the more obscure examples include favorable news in food processing, the local view from Kansas City, and the case for arguing that the slump has ended for tech spending.
But there's also plenty of dissent...
• Recovery? What recovery? Retail analyst Howard Davidowitz of Davidowitz & Co. thinks not. Not even close, warns this bear’s bear. Among the obstacles: debt, and lots of it.
• If the recovery’s less than it appears, why has oil been so strong recently? The bullish view is that higher energy prices of late imply a strong recovery.
• Not so fast, warns the Federal Reserve’s vice chairman. "Home sales, which seemed for a time last year to be starting to slowly recover, have stalled recently, and housing starts are only a little above last year's low," says the Fed’s Don Kohn.
• Eric Janszen writes in the Harvard Business Review: “Welcome to the False Recovery”
• But let's not be hasty, suggests economics professor Mark Perry, who offers 10 reasons the economic recovery is real"
• Finally, Kudlow and company debate the case for and against the odds of a strong “V" shaped rebound:
Posted by jp at April 10, 2010 10:53 AM
It seems to me almost everyone has lost sight of baseline facts about how an economy runs. Celebrating the rise of energy costs as a sign of economic growth? All complex societies are complex only because of high yields of net energy gain. In our case, oil and gas have let us make the most strikingly fast changes in how humanity lives in the past 150 years. As real energy prices rise, our ability to afford all of the new inventions that characterize modern life fall away. Our quest for long term economic growth lies not in any banking, consumer, or housing numbers, but in our ability to find post-oil sources of cheap energy.
Posted by: Brian Holder at April 12, 2010 2:41 PM
Strong upward oil pricing can simply be a product of high debt and corresponding dollar devaluation. Although oil is priced in dollars producers place a price based on their currency equivalent.
Posted by: Anonymous at April 11, 2010 2:55 PM