Sunday, August 2, 2009

The Ugly Truth

The recession is over — that's the good news, according to Newsweek.

At least, that is what the main headline on Newsweek's article says. But the ugly truth is to be found in the subhead: "Now what we need is a new kind of recovery."

"The Great Recession ... is most likely over," writes Daniel Gross for Newsweek. And he acknowledges that "[c]atastrophe may have been averted. But when economists proclaim a recession over, they're celebrating a technicality: they mean economic output has stopped contracting. ... GDP growth alone can't feed a family, or pay a mortgage. Cursed with a high national debt load and blessed with a dynamic, growing workforce, the U.S. economy needs annual growth of at least 1.5% just to feel like we're standing still."

Gross has more bad news, although I suspect that longtime job seekers have already figured it out.

"[T]he data point that means the most to our psychological well–being — unemployment — is likely to keep climbing. The loss of 6.5 million jobs since December 2007 has spurred the sharpest rise in the unemployment rate since the 1930s."

If you've been unemployed for awhile, you're probably feeling like a punching bag these days. And Erik Eckholm delivers an uppercut in the New York Times, reporting that up to 1.5 million unemployed Americans will run out of unemployment benefits in the coming months, "ending what for some has been a last bulwark against foreclosures and destitution."

Don't blame Eckholm. He is only the messenger.

And I'm not suggesting that anyone blame the president, either. He didn't create the situation.

But make no mistake about it. While Barack Obama is gambling his popularity on a health care reform package — the passage of which seems iffy at best — and sitting down for a beer and a "teachable moment" on race relations with a Harvard professor and a Cambridge, Mass., police officer, unemployed Americans of all races and their families are facing the loss of their meager benefits in spite of the fact that, as Eckholm writes, "unemployment in this recession has proved to be especially tenacious."

For whatever reason, some people can't get it through their bullet–proof heads that things are different than they used to be. Joblessness lasts a lot longer for most people than it used to. There was a time when employers would take a chance on people who sort of fit the bill for what they were looking for. Today, with so many people looking for jobs, employers can look for a candidate who meets their requirements precisely. That's why it is so hard for people to find work in different fields, even after retraining. Few employers seem willing to allow for a learning curve. Most want actual on–the–job experience.

It's a modern–day Catch–22. You can't get a job in a different field without experience, but you can't get experience in this economy.

The focus of this administration should have been jobs — creating new jobs, encouraging employers to give displaced workers a chance, etc. — all along. Now, millions of Americans, including children, will pay the price because it hasn't been the focus. Many will pay the ultimate price.

I'm not doubting Obama's intentions. But you know what they say about the road to hell?

It's paved with good intentions.

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