The continuing optimism reported regarding an economic recovery is growing old while the economy does not grow at all (or at rates well below normal). The recession was declared over in June 2009. In light of what has happened and where we are today, does that seem credible? You don’t have to be too old to remember when 5 – 6% quarterly growth characterized recoveries.
There is no recovery, regardless of what the elite and their minions in the media want you to believe. The economy is sick. It was made so by the malpractice of government and will become even weaker as government continues to administer the poison that got us to this point. The political class’s version of remedy is akin to the medical profession’s practice of bloodletting. Neither does any good and both, carried to extreme, are fatal.
The medical profession, grounded in science and constrained by the Hippocratic Oath, recognized the fallacies in their bloodletting remedy and abandoned it. The economics profession deserves a great deal of shame for their participation in the economic fraud that has been perpetuated on the country, but politicians are the true problem. Economists do not make policy. They can suggest it, but that is all.
Politicians select and implement economic policy. Sadly, they do so more for political rather than economic reasons. As in most professions, the economics profession is not short of their share of prostitutes and/or incompetents. These people are willing to recommend and support policies when it is in their best interest to do so. Government makes sure that is the case and integrity is compromised for monetary or other non-pecuniary rewards.
The political class has backed itself into a corner. They have convinced the public that bloodletting is effective. Stopping now and admitting its failure is unlikely because of the political backlash that would ensue. Thus they will not stop until markets stop them. Bloodletting will continue until the economy dies and is recognized in a deep Depression.
The gap between political claims and reality is getting uncomfortably wide. To pretend, the political class increasingly is forced to strain credibility. Simon Black points out one of the many discrepancies between political claims and reality:
According to ADP data, the number of people employed in the United States today (111 million) is roughly the same as in 2001. Yet back then, there were about 285 million people in the US. Today there are 315 million people.
So the conclusion is that there has been no growth in the number of jobs, far more people in the country, and far fewer of them ‘participating’ in the work force. This can hardly be called progress.
These contradictions between reality and political claims are everywhere, yet politicians continue to speak of a recovery while their public relations arm (the media) continues to accept and buttress their claims. They cannot admit the damage they have done, so this course is their only option.
The economy still has some blood left. Politicians will continue to bleed it until the patient dies. Then we will end up in a greater Depression than was necessary.
Sadly, the economics profession does not have the equivalent of a Hippocratic Oath. Even then, perhaps its members are not strong enough to be intellectually honest. Integrity in the face of government bribery or threats is easy to lose. Especially for a profession that prides itself on understanding self interest.