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What if there’s nothing to recover to

Robert Reich belatedly answers the question I asked in January — can the economy ever really be what it was? He says no:

My prediction, then? Not a V, not a U. But an X. This economy can’t get back on track because the track we were on for years — featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere — simply cannot be sustained.

The X marks a brand new track — a new economy. What will it look like? Nobody knows. All we know is the current economy can’t “recover” because it can’t go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin. More on this to come.

8 Comments

  1. the link is empty 🙁

  2. I’ve been thinking the same thing for awhile. The economy just isn’t sustainable. Unfortunately I don’t see private business or government taking a leadership role in changing how our economy works, at least not until we’re deep in a Second Great Depression. I expect a few more rapid cycles of half-assed recovery, followed by longer and longer recessions.

  3. Link’s been added. Sorry about that.

  4. The corporate greed needs to stop or at least be checked. Here’s a few things off the top of my head:

    1. The health insurance companies are robbing the middle class blind. The rising costs of premiums, the unaffordable health insurance and the cost of prescription drugs have reached a point where the average middle class family simply cannot maintain both a mortgage and a health insurance policy.

    2. The cable companies have successfully killed over-the-air broadcasts. The tiered packages for cable TV are ridiculously bad. They make it impossible to get just the channels you watch and instead overcharge you for hundreds of channels you don’t want and don’t watch.

    3. Wall Street (especially slime bucket companies like Goldman Sachs) need to stop raping America and start paying their fair share of corporate taxes. With that tax revenue, Obama could easily fix the health care problem, fix the education problem, lower taxes for everyone (yes, the rich too) and start paying off the trillions of dollars in debt that Bush ran up.

  5. Sadly, I’m with Rob on this one.

    Most of the steps our government is currently taking will only serve to dig the hole deeper. Big business isn’t really doing anything different either.

  6. Yep. I’m hunkering down for a period of (I hope) pretty high inflation while all the money that’s been printed to account for economic growth that wasn’t really there works its way through the system. The alternative is large-scale deflation, and I think that’d lead to revolution. Either way, the banks are gonna take it on the chin (because deflation will lead to more people walking away from devalued real estate).

    The way I’ve phrased the question for the past decade is “in 1996, Alan Greenspan referred to a DOW of 6500 as ‘irrational exhuberance’. What’s a reasonable number given the economic growth the Internet’s brought us?”, and I’ve never gotten an answer over 8500.

  7. Dan hit it right on the head. We have two choices inflation or deflation. Choose your poison, it looks like the administration has picked inflation.

  8. Matthew, have you not noticed the massive DEFLATION? Anyhow – I don’t see how the World can keep on going the way it previously was. Better start growing your own food if you can.

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