Thursday, August 11, 2016

'Toontime: The Not So Healthy Economy

After six and a half years since the Great Recession, the country has recovered the jobs lost, but those gains are not enough to keep up with population growth as this chart from the Economic Policy Institute shows:

Only about sixty percent of the adult population is now employed, four percentage points below the January 2008 level. According to the conservative Hoover Institution the Great Recession did permanent damage to the US economy. Economic output is estimated to be 13% below its long-term trend, about 3.9% of which is due to a shortage of business capital. As Reinhart & Rogart have demonstrated with empirical data from around the world, advanced economies are heavily dependent on sophisticated financial systems and when they freeze up as they did in 2008 prolonged recessions and impaired economic growth are often associated*. You can thank Wall Street plutocrats for the new, substandard economy that not even his opulence, 'The Donald' can fix.

*This Time Is Different, 2009 p.173.