Jobs and stocks are up, so why the recession gloom?

Jobs and stocks are up, so why the recession gloom?

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WASHINGTON, August 15, 2014 – The July jobs numbers were good. According to the Bureau of Labor Statistics, total nonfarm payroll employment increased by 209,000. The unemployment rate remained at 6.2 percent — not great, but the best that it’s been since 2008.

The Obama Administration hopes that you appreciate those numbers. We are recovering from the Great Recession, which officially ended in 2009. But the odds are that you don’t. Half of Americans believe that we’re still stuck in the Great Recession.

It’s been said that a recession is when my neighbor loses his job; a depression is when I lose mine. Economists define these things in terms of GDP — Gross Domestic Product, or the total value of goods and services produced in our country after deducting the value of imports. But if GDP is growing and my income is stagnant or falling, what do I care about GDP? From my perspective, the economy is still bad.

To economists the economy can be reduced to statistics: GDP, unemployment rates, interest rates, current account deficits and so on. To an individual, the economy is all about me. The average American me isn’t doing that well.

An economist is being charged by a grizzly bear. He picks up his gun and carefully shoots three feet to the bear’s left, then three feet to its right. He puts down his gun, confident that on average the bear is dead.

That half of America thinks we’re still in a recession suggests that the benefits of the recovery are still scattered. There are 4 million unfilled jobs just waiting for the right job hunter; if you don’t have one, are you just a lazy bum who needs to drop the bag of chips and the TV remote and get off his parents’ sofa? If you have a degree in petroleum engineering, your future is sunny (or maybe that’s just the light from a gas flair). Most Americans don’t have the math or science skills of a cabbage, though, so a tech boom in California or Massachusetts matters to them like the price of plums in China.

You say you have a college degree? People with art history and law degrees need not apply for the tech boom. A job that you’re not qualified for might as well not exist. The other guy’s recession might be over, but your depression lingers on.

The point of economic performance statistics — the reason that we care about them statistics — is as a measure of whether people are better off. If most of them aren’t, or if they see their economic trajectory heading down, then perhaps we’re measuring the economy with the wrong yardstick.

A picture floating around the internet this week suggests that if President Obama were white, the booming stock markets and rosy job reports would be greeted with universal acclaim. We’re unhappy because Obama is black.

In fact, we’re unhappy because we’ve given up looking for work (hence are no longer unemployed), or because we have plenty of work and a paycheck that’s remained unchanged for five years. Our firms, divisions and departments have downsized, leaving us with more to do and afraid to complain because we’re just glad to have a job, and taking home a check that, thanks to the slow drip of inflation, is worth 15-20 percent less than it was.

That isn’t all Obama’s fault — the president is just one of many people who influence the economy — but in between rounds of golf, he might consider looking at the people behind the statistics and stop patting himself on the back for the great job he’s doing. As for his defenders, they should realize that this isn’t about race. It’s about the American me.

In the South one often hears, “when mama ain’t happy, ain’t no one happy.” Get off that golf course and come home to mama, Mr. President. She ain’t happy.

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Jim Picht
James Picht is the Senior Editor for Communities Politics. He teaches economics and Russian at the Louisiana Scholars' College in Natchitoches, La. After earning his doctorate in economics, he spent several years doing economic development work in Moscow and the new independent states of the former Soviet Union for the U.S. government, the Asian Development Bank, and as a private contractor. He has also worked in Latin America, the former USSR and the Balkans as an educator, teaching courses in economics and law at universities in Ukraine and at finance ministries throughout the region. He has been writing at the Communities since 2009.