Sunday, July 10, 2011

The Second Great Depression: It's Better, It's Worse, Better, Worse...

An article picked up by hundreds of newspapers & online outlets from AP on Saturday seems to finally validate what you've been reading on The Smoking Nun for more than a year now: Despite what politicos would have you believe, we are indeed in the midst of the Second Great Depression.

It blows my mind that at the beginning of every month, news stories seep out insinuating that the economy is suddenly rapidly recovering from its 2007 free-fall—only to be followed by whoopsie oops fact-based articles that then report economic indicators and unemployment figures proving that the nation remains in tatters. At last, here is one analytical article that puts all the pieces in place...

It begins, "The job market is defying history. A dismal June employment report shows employers are adding nowhere near as many jobs as they normally do this long after a recession has ended. Unemployment has climbed for three straight months and is at 9.2%. There's no precedent, in data going back to 1948, for such a high rate two years into what economists say is a recovery."

Skipping all the statistics, which we've noted in previous posts, the story reasons, "The excruciatingly slow growth is confounding economists, spooking consumers and dismaying job seekers. Friday's report forced analysts to re-examine their assumption that the economy would strengthen in the second half of 2011."

And: "Sometimes disappointing economic reports look better on closer inspection. This one gets uglier: 16.2% of those who wanted to work were either unemployed, forced to settle for part-time jobs or had given up looking for work. That figure was up from 15.8% in May," the story states.

At this point, count me among the "underemployed" in the latter category. I was laid off from my job after 14 years in March 2009, as the company's owner leaned up its bottom line in order to sell the division. Once that was accomplished, I learned the bitter truth, as every fired veteran was replaced title for title with recent college grads... and interns.

Back to the AP story: "One problem is that after slashing jobs during the 'Great Recession,' employers are still reluctant to replace them. They've learned to squeeze more work and revenue out of reduced staffs. Corporate profits have soared. But companies don't want to add workers."

Tell me about it. At last, a story that truly spells it out. Companies have no intention of hiring when they can mount massive revenues from a persistently pared-down workforce. Welcome to the millennial America. Uncle Sam is surely ready to move to Canada with the rest of us.