Really interesting TIME magazine article
hereSome highlights:
-IF AMERICA'S ECONOMIC LANDSCAPE seems suddenly alien and hostile to many citizens, there is good reason: they have never seen anything like it. Nothing in memory has prepared consumers for such turbulent, epochal change, the sort of upheaval that happens once in 50 years. That may explain why so many voter polls, taken as the economy shudders toward the November election, reveal such ragged emotional edges, so much fear and misgiving. Even the economists do not have a name for the present condition, though one has described it as "suspended animation" and "never-never land."
-In a normal rebound, Americans would be witnessing a flurry of hiring, new investment and lending, and buoyant growth. But the U.S. economy remains almost comatose a full year and a half after the recession officially ended. Unemployment is still high; real wages are declining.
-The current slump already ranks as the longest period of sustained weakness since the Great Depression.
-That was the last time the economy staggered under as many "structural" burdens, as opposed to the familiar "cyclical" problems that create temporary recessions once or twice a decade. The structural faults, many of them legacies of the 1980s, represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought, the debt hangover, the defense-industry contraction, the savings and loan collapse, the real estate depression, the health-care cost explosion and the runawayfederal deficit. "This is a sick economy that won't respond to traditional remedies," said Norman Robertson, chief economist at Pittsburgh's Mellon Bank. "There's going to be a lot of trauma before it's over."
-America's structural burdens have hit home most profoundly in terms of jobs. The U.S. workplace is "in a profound, historic state of turmoil that for millions of individuals is approaching panic," according to labor consultant Dan Lacey, publisher of the newsletter Workplace Trends. Official statistics fail to reveal the extent of the pain.
-A comprehensive tally would include workers who are employed well below their skill level, those who cannot find more than a part-time job, people earning poverty-level wages, workers who have been jobless for more than four weeks at a time and all those who have grown discouraged and quit looking.
-One major obstacle to efficiency remains: a runaway U.S. health-care system, whose costs are rising at the rate of more than 9% a year and today stand at $2,500 a person, more than twice the level of most of the world's industrialized economies.
-…needs time to work itself out: the debt hangover. The initial stages were painful, wiping out both borrowers and lenders. Bank regulators clamped down on lenders, while borrowers either swore off the credit habit or were deemed bad risks. The result was a credit crunch that has severely hurt businesses, especially small ones. Among the 8 million such companies in the U.S., failures are running at the rate of 240 a day. One of the faces behind the numbers is Joseph Burton, whose plight embodies many of the woes now afflicting small business.
-The consumer-debt hangover will be far easier to solve than the government's. …the government is limited in how much it can stimulate the downtrodden economy with the usual recession cure of a quick jolt of spending. Yet a growing number of economists are contending that shrinking the federal deficit is a worthy goal that should be temporarily suspended until the economy is back on track. While the national debt will hamper the economy over the long run, its net effects on growth over the short run are insignificant compared with such problems as unemployment, declining wages and worker dislocation.
Most interesting thing about this article is that it is from September 28, 1992.
