Reading the business press — or, at least the business pages of the major dailies — can give one whiplash. The stories swing wildly between a bizarre level of economic optimism (we are turning the corner, stocks are up, hooray) and reality, as typified by today’s story on the June jobs figures:
The American economy lost 467,000 jobs in June and the unemployment rate edged up to 9.5 percent in a sobering indication that the most painful downturn since the Great Depression has yet to release its hold.
“The numbers are indicative of a continued, very severe recession,” said Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “There’s nothing in here to show that the economy and the market are pulling out of the grip of recession.”
The latest monthly snapshot of the nation’s job situation, released on Thursday by the Labor Department, reinforced a consensus that high levels of unemployment were likely to remain for many months and perhaps years. That will almost surely increase the difficulties of finding work for millions of jobless people while limiting
wages and working hours for those employed.
This kind of story, I think, offers a better snapshot of the current economic malaise. We continue to lose jobs and witness deflation in housing prices. Credit remains tight and, let’s face it, people are scared.
The cheerleader stories do little more than make us feel a bit better, while at the same time allowing our problems to fester. We need to be honest about the depths of what we are facing, about the structural and regulatory failings in our economy if we are to fix it.
Hank Kalet 