One disturbing fact from the McKinsey report is this: The number of new businesses, a traditional source of jobs, was down 23 percent in 2010 from 2007; the level was the lowest since 1983, when America had about 75 million fewer people. Large corporations are standoffish. They have about $2 trillion of cash and securities on their balance sheets, which could be used for hiring and investing in new products. Meanwhile, the latest University of Michigan Survey of Consumers reports that “record numbers ”¦ thought that their incomes would lag inflation over the next five years.” Note: They didn’t expect high inflation so much as low income growth.
It’s not that economics achieved nothing. The emergency measures thrown at the crisis in many countries ”” exceptionally low interest rates, “stimulus” programs of extra spending and tax cuts ”” probably averted another Depression. But it’s also true that there’s now no consensus among economists as to how to strengthen the recovery.
[blockquote]The emergency measures thrown at the crisis in many countries — exceptionally low interest rates, “stimulus†programs of extra spending and tax cuts — probably averted another Depression. [/blockquote]
Even though some economic indicators are positive enough that we don’t fit the technical definition yet, it’s beginning to feel like another Depression to a lot of people who have been out of work for a long long time.