The WSWS take on the economic recovery that isn't.

[Karmadillo]

The WSWS has provided the best analysis I've seen so far of the 7.2% GDP growth (or, as CNN might inform us, the 7.2% GDP growth, the 7.2% GDP growth, the 7.2% GDP growth, the 7.2% GDP growth etc.). Given that we will be hearing for the next three months how the economy has recovered and all is well, it wouldn't hurt to have the facts presented below close at hand for those dark moments when Tim Russert has you convinced Bush's "re-election" is all but assured.

In addition to the problems discussed in the excerpt, the article notes the absence of business pricing power means future increases in profits will likely come from job killing technology rather than increased hires. Also, structural imbalances continue to pose a serious threat to any recovery, real or imagined.

http://www.wsws.org/articles/2003/oct2003/econ-o31.shtml

<edit>

In the first place, the increase in consumption spending was not the result of a rise in aggregate income, flowing from increased employment, as would be the case in a “normal” recovery. According to the Economic Policy Institute, “the strength of consumer spending rested on tax cuts and mortgage refinancing” with a one time tax cut boosting disposable income by $100 billion. This meant that after-tax income grew by 7.2 percent. Before-tax income, however, rose by only 1 percent, while real wage and salary income, after taking inflation into account, actually fell by 0.1 percent in the quarter.

The income figures point to the main peculiarity of the present “recovery”—the continued decline in employment. In a comment published on October 24, Morgan Stanley chief economist Stephen Roach noted that “by our calculations, over the first 21 months of this recovery, real wage and salary disbursements—the dominant component of personal income—are running about $320 billion below the path that would have been generated in a normal recovery.”

According to his figures, some 22 months after the recession supposedly ended in November 2001, private sector hiring in the US economy was running 4.3 million workers below the norm of the past six recoveries.

Other figures highlight this process. In a recent comment, New York Times op-ed columnist, Bob Herbert, pointed out that in the past two years the number of Americans living in poverty has increased by three million, while the median household income has fallen for the past two years. According to research by EPI senior economist Jared Bernstein the decline in the number of hours worked by families, rather than by individuals, was “of a magnitude that’s historically been commensurate with double digit unemployment rates.” Not only are fewer family members working, the ones who are employed are working less hours.

lots more...

[piece sine]

1. OK...

so Dems. are PROTESTING the improving economy instead but supporting the case foer building upon this improvement. I get it: Some DUers actually LIKE being out of power! Franmkly, this mumbo-jumbo is exactly what we all should NOT be saying. It's political suicide.

[Karmadillo]

3. I wouldn't claim expertise on econ issues, but what facts presented in

the article are inaccurate? If they happen to be true, it would mean the recovery isn't a recovery (or not much of one). Are the Dems not allowed to say so?

As you suggest, building on a recovery is important, but it's also important to define the type of recovery we're having. If we simply accept the White House spin and refuse to put forward our own analysis, it simply means more tax cuts and even greater problems down the road.

[sendero]

4. who said...

... anything about "saying" it. It is useful to know nonetheless.

[stewert]

5. Huh ?

I don't know many dems protesting the improving economy. What I see is dems still asking
what about the jobs.

Over 3 million people have lost their jobs since Bush took office, for them a 7.2% GDP increase
is meaningless. We still have 6.1% unemployment, and people are still being laid off.

Sony plans to cut 20,000 jobs alone, when the 3 million people get a new job, and the economy
starts creating more jobs than it loses, you will then have a real economic recovery.

Not to mention this was only one quarters numbers, let's see what happens in the 4th quarter.

The point is, what good is a 7.2% GDP increase if jobs are still in decline, and the 3 million
people who lost jobs in the last 2 years are still out of work.

What I see is democrats asking when the jobs come back. I can not speak for all democrats,
but I personally want to see the economy recover. Unless the jobs come back, it wont be
much of a recovery, except for the wealthy.

If this GDP number was so great, how come the dow was only up 12 points yesterday. And
how come the fed left the interest rates at a 65 year low of 1 percent.

When the GDP goes up 2 or 3 quarters in a row, and the jobs come back, it will be a real
recovery. Until then nobody knows what the economy will do. If more people lose
jobs, than gain jobs, it will not be a real recovery.

I hope the economy recovers, as long as job growth comes back. I know quite a few people
who are still out of work. They want to work, they just cant find a job that pays enough
to make a living. It's hard to get by on a $5.50 an hour job at burger king.

[felonious thunk]

2. The jobless "recovery"

This GDP growth is not emblematic of a positive change of any sort. In fact, it is a troubling sign of things to come. I actually find it very concerning that the economy is growing steadily while jobs continue to be lost. What we are seeing is the widening economic gap between the rich and the poor. The wealthy are fueling this increase in GDP, and they are fueling it by increasing their own wealth.

Meanwhile in the lower part of the economy, people are losing their jobs, and finding a safety net no longer exists for them. Economic growth and rising unemployment are bad things to be occurring at the same time for our society. The gap needs to be lessened, not extended. This growth is rapidly expanding it.

[kentuck]

6. It also helps the Repub candidates in their elections next Tuesday...

This news alone, real or fabricated, could make the difference in the elections in KY and Mississippi. In Ky, the Democrat was running against the "Bush economy" specifically...