Recession and Recovery

Are we there yet?

   The U.S. economy began to recede in December 2007, and bottomed out the following year, officially ending in June 2009. Recovery, however, was complicated by failures among major financial institutions and further stalled by a bust in the housing bubble.
   Although a technical definition would say the recession ended when an upturn began, others would say recovery is not complete until the economy reaches the point where it was when the downturn began.
   Think of it as a cycle, pictured as what artists like to call a fever line graph.
   Meanwhile, there are intermittent ups and downs while the economy is still in a trough. Call it sputtering. Recessions begin when growth tops out at the top of a cycle and heads downward on the graph line until it bottoms out in a trough and then heads upward, indicating the start of recovery. One issue to deal with, however, is the length of the trough. The view from here is that the American economy is still sputtering in the trough of a business cycle.
   Some drivers of the overall economy are, indeed, zooming along, showing excellent growth and pulling up the GDP data with them. (GDP, or Gross Domestic Product, measures the total value of all products and services within a nation.) Other industry segments, however, are still in a ditch, sputtering and stuttering as they attempt to get rolling again, and on the high road to economic success.
   Housing, for example, has begun to recover, showing a jump in building permits of about 30 percent for 2012, and housing starts rising by some 28 percent, according to government figures.
   Auto sales are up sharply, and industry employment is up, but wages and hours worked are steady -- off slightly, in fact.
   The technology sector is doing well, thanks partly to the fascination with gadgetry and the appeal of owning the latest "big thing."
   The unemployment rate has been relatively steady, hovering around the 8 percent mark for most of last year, and ending December 2012 at 7.8 percent. It spent most of 2009 on the rise, topping out at 10 percent in October of that year, four months after the recession officially ended.
   So while politicians and some economists proclaim the end of the Great Recession, try telling that to the college graduates who can't find work, or to those who were laid off and are still out of work after many months of searching. How long is this so-called trough, they ask?
   All in all, we're not yet out of the ditch. The shadow of the Great Recession is still upon us, and entering its sixth year.


   Will government intervention during Barack Obama's second term refuel the economic engine? Or will the Anti-Keynesian backers of a fully free market persuade everyone to be patient until the economic illness fades?
   Stay tuned, and hope that this Great Recession doesn't end the way the Great Depression did -- with another Great War.