RECOVERY IS WORSE THAN RECESSION FOR MOST PEOPLE

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EDITOR’S COMMENT: Truth meets fiction.  Fiction wins. Most people refer to this period in our history as a recovery period. It is not. We are (a) in continual decline and (b) headed for another, larger crisis. The government’s attention to creating jobs has been anemic at best, stunted by absurd ideology that has effectively blocked the right steps toward a true recovery. A true recovery would be one in which the unemployment rate including all those who have given up, falls to around 3-4%. That requires a 90% reduction in unemployment. No policy on the table comes anywhere near reaching for that goal.

Employment and housing are inextricably linked for obvious and not so obvious reasons. The obvious reason is that if people have no income they have no ability to pay for housing. The false foreclosures have driven the housing market down siphoning off over $7 trillion from homeowners that landed right in the pocket of Wall Street bankers. These homeowners and former homeowners have no credit, no savings and no income from an economy that can’t keep pace with the elements of a recovery.

Stop the foreclosures, reverse those that have occurred, work out deals for them to pay the Federal government a portion of the mortgage on the house or rent the house, and you’ll be injecting trillions back into the wallets from which the money was stolen. With consumer wealth and resources restored, the consumer driven economy will rise, unemployment will fall, and THEN we will be having a true recovery instead of the imaginary one that is splashed across mainstream media.

Americans’ Incomes Have Dropped 6.7 Percent During the ‘Recovery’

10:03 AM, NOV 1, 2011 • BY JEFFREY H. ANDERSON

New evidence suggests there’s a reason why this economic “recovery” hasn’t felt much like a recovery. Figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the “recovery” has actually been harder on most Americans than the recession from which they’ve allegedly been recovering.

According to the report — which has been referenced by both the Wall Street Journal and the New York Times — in early 2000, Americans’ median annual household income was $55,836, in real (inflation-adjusted, June 2011) dollars. By the start of the recession (in December 2007), Americans’ real incomes had fallen 0.9 percent, to $55,309 — a decline of $527. During the recession (which ended in June 2009), their incomes fell an additional 3.2 percent, to $53,518 — a decline of another $1,791. During the first two years of the “recovery” (from June 2009 to June 2011), they fell an additional 6.7 percent, to $49,909 — a decline of another $3,609.

According to Sentier’s report, the median American household income has actually fallen during the “recovery.”  Not only that, but it has fallen even morethan it did during the recession. Gordon Green, former chief of the Governments Division at the U.S. Census Bureau and co-author of the report (with fellow Census veteran John Coder), says, “Real income fell by 3.2 percent during [the recession].  And during the recovery it went down by 6.7 percent.” So “income [has] declined twice as much in the recovery as in the recession itself.”

So, from the start of 2000 to mid-2011, the typical American household’s real income dropped nearly $6,000 — and more than 60 percent of that drop (over $3,600) came after the start of the “recovery” and thus squarely on Obama’s watch.

While the real median income of American households dropped 6.7 percent during the first two years of the “recovery,” the incomes of many households dropped even more than that. The income drop was steeper for those under 25 years of age (their incomes were down 9.5 percent), for those between 25 and 34 years of age (down 9.8 percent), for black Americans (down 9.4 percent), for families with three or more children (down 9.5 percent), and for families headed by part-time workers (down 11.5 percent). And that’s despite the fact that the report’s income tallies include unemployment compensation and monetary public assistance (both state and federal).

In fact, the anemic economy has meant that Americans’ incomes have declined during the “recovery” even without adjusting for inflation. According to Green, in actual (non-inflation-adjusted) dollars, the median American household income was $51,140 at the start of the “recovery,” but it fell to $49,909 two years later.

 

10 Responses

  1. I would add that ENRON had a strong influence on much of the current Western gas and electric—probably wrote 1st drafts of the rules which could be found in comments on the federal record,

    And definitely shutting down the lowest cost operators in the middle of a recession seems like bad timing to me—

    Let me add from EIA stats and state-EPA filings plus press re Keystone, the state EPAs and EPA have severely restrained import of Canadian crude into the midcontinent area between the Appalachians and Rockies for a decade. The reason: the Canadian oil comes from oilsands and create more CO2 than oil imported from Saudi Arabia. same primary reason we are cutting coal plants. Mercury one thing–CO2 another.

    The effect of these supposedly enviro plans is the increase in price to modify demand. Which is good economically–if they do not overlay the religious beliefs on CO2 on top. Why was the US churning out 50% of its vehicle fleet with even the heaviest pushed around by diesel engines. Thae conversion of large vehicles [as in europe] to disel in 2000 would knock millions of BPD off US consumption. But prices of fuel would have dropped—the enviro goalpost is maximum price for energy to encourage conservatio–and expenditure on fancy costly R&D type solar etc —–another good idea as long as they keep the society running while they do it–the sweeping changes only work if they do not ignore reality.

    I was in a Volkswago diesel last week—–42mpg on the sticker—twice the life or more—but profiteering on that engine–a $6000-8000 option. It acted like a gas car–i could tell no diference but for the 40% increase in mileage. In US’ vehilces you cannot find anything diesel in smaller than 3/4 ton pickups. They must destroy diesel in refineries to make gasoline–why not look at the energy consumed there?

  2. @NoraC ,

    It’s not decade old deregulation causing energy prices to skyrocket , it’s Obama ,, he is shutting down electric generating plants across the USA with his EPA ,, he has caused coal prices to double ,, watch this Youtube clip where he proclaims (before the election) that he will force energy prices through the roof..

    http://www.youtube.com/watch?v=BqHL404zhcU

    It’s all about controlling us ,, the ordinary people ,, the ones that aren’t in government or academia or the 1%ers .

  3. OCCUPY THE ROSE PARADE PHOTOS HERE–ORDERLY-JAN 2012
    IN PASADENA, CALIFORNIA

    http://www.scribd.com/doc/77215946/OCCUPY-THE-ROSE-PARADE-PHOTOS-HERE-ORDERLY-MARCH-JAN-2012

  4. “maybe even the defense lawyers are in on it”

    be wary–subtle conflicts–subtle tricks—never get between a servicer and a buck

  5. who knows maybe even the defense lawyers are in on it. I get save money? from the para legal? what money no job and no unemployment extention how do you save money so weird. a lot of stress

  6. what recovery? as “long as we have banks , servicers stealing homes there will not be a recovery. wells my fargo just forged my signature on my note in foreclosure complaint and that’s ok it doesn’t seem ethical no one sees a problem here I have a lawyer but even the
    are no match
    for the bank and

  7. The bind is the increase in the cost of food, electricity and natural gas that has occured at the same time that incomes dropped. Utility deregulation done a decade ago is coming to bear in a mean way in this economic climate. Main stream media just continues to make the call wrong, obvious propaganda. What was a recession became a depression and their “recovery” is a phantom not supported by facts.

    The government could step in and regulate utilities again, but of course they won’t because the big corporations tell the government what to do. Americans are being robbed blind at the gas pumps too, thanks to corporate control and speculation, and we have been for decades. We’re awake now, though. It’s going to be tough on them when they have to look for jobs in the private sector and there aren’t any, because we got busy and chopped government in half, and took away the tyrannical power of what’s left. They’ll feel what the rest of us have been complaining about first hand.

  8. What &%$^ing “recovery”?

  9. This is most likely heavily skewed to minimize the adverse effect on voters by using statistical selections in generating the required output that are rosier than actual.
    example:
    “Each of these surveys collected data for a nationally representative sample of more than 50,000 interviewed households and their members (approximately 130,000 per month)”

    Ok my 1st question is what happens to the data on homes that have changed hands–or are foreclosed-vacant shadow-not listed, or actual REO. Would not it be more likely that the dispossessed will push the numbers down to worse levels? –if you really are trying to track economic activity —gotta follow the subjects of the study not their replacements in homes? Even if the try to track a few–tough –for mobile renters effectively on the run, humiliated, depressed, terrified— trying to store or sell furniture—new postal addresses—c/o’s, checking accts, credit cards, med pmts chasing the seizure victim through forwarded mail?? For older people, If you are younger with kids–how many bedrooms, who sleeps on the couch? Where do you park cars? What happens to our 7 yr partner-pet that has given your family strength in the face of the predators, in “no-pets” apartments and homes? How could they analyze stats of the most beaten-up, job losses and better a vacant house than let the owner-occupant stay under revised terms——-less than 2 yrs out of seizure? Lives still chaotic— numbers must be worse

    @nd question:
    The ratios –downward slope actually—of average people–if they can get that properly defined, in any event incorporates a factor for inflation. They must make some estimation. The measures used tend to downplay the effect of core costs –food and energy–

    More importantly, they tend to minimize the effect of devaluation of the dollar. There have been many trillions printed —-every year it takes more dollars to do the same services—because the intereest factor is buried in the devaluation. It is most obvious in oil prices–demand shrinkage—but prices were high anyway. More dollars to buy same oil.

    The effect of mass printing usually hits 2-4 years after the profligacy and largess afforded the financial system–bonuses and investment gains in offshore hedge funds, etc.

    Some remember the war-printing that occurred 1970-1975—inflation hit in 77-78———-political?

    The better inflation adjustment would take greater account for future inflation when the eastern and eu markets recover?

    The average inflation rate on 5 yr forwd is necessary for this comparison to be meaningful—and the mere fact they attempt to toss out a number vs a range is questionable–there must be margins of error and how did they lean those numbers?

    I think things are shrinking in the US –not expanding. Next market downturn the companies will go on a spending spree to buy stock—not going to invest that money in modern equipment here. , theirs and others to increase concentration–reduce competition–get monopoly pricing.

  10. This “recovery” reminds me of a line from Steve Martin:

    “First the doctor told me the good news: I was going to have a disease named after me.”

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