The end of 2010 brought renewed Washington rhetoric, media hype and academic me-too declarations about the US economy “recovering”. We’ve heard them before since the crisis hit in 2007. They always proved wrong.
But recovery noises are useful for some. Republicans claim that government should do less since recovery is underway (of course, for them, government action is always counterproductive). Likewise, Republicans and many centrist Democrats claim that income redistribution policies are no longer needed because recovery means growth, which means everyone gets a bigger piece of an expanding economic pie. Recovery hype also helps the Obama administration to claim that its policies succeeded.
Yet, this is more fantasy than reality. After all, the nearly 20% of the US labour force that became unemployed or underemployed in 2009 remains so as we enter 2011. No recovery there. Worse still, a quarter of those who found work since the crisis began only got temp jobs without benefits. Second, foreclosure actions by banks – including those who got most of the government’s bailouts – continue to eject millions from their homes. No recovery there, either (except for the bigger banks). More.