The US economy has been in recovery for the last 15 months but the pace has underwhelmed both in terms of economic growth and employment. Of note, the equity markets rise off of the panic lows of March 2009 is consistent with a recovery however woeful.

The Wall Street Journal argues that the background for this historically weak performance has to do with the policy measures of the Obama Administration and its Democratic Congress.

Not. It is the shark of structural adjustment at work.

Leaving aside the debate about what policy did, the fact is that the structure of the US economy was grossly distorted by the decade long credit boom captured by the tremendous growth in personal consumption and housing as a percentage of GDP (at the peak 77% of GDP!). 

Finance, real estate, construction, shopping malls all grew on a structurally unsustainable basis, and all will adjust down.

This is a bitterly painful process for two reasons.

First, many people accustomed to being successful, building their professional and personal lives -- wealth, families, contacts -- in those areas of the economy and the cities and towns where they are located have zero chance of ever doing this in these sectors of the economy again.

Never ever.

Second, what will come next is not visible. What is the next Microsoft, Apple, Internet, hybrid, wind power companies and technologies? We don't know. Losing your ability to make your life after having made a good one for a decade or so and not knowing how you can remake it is what is eating away at the American dream.

A few articles updating the sorry state of the US economy, as well as an interesting analysis of how people over 35 are fearful of equities, a point of privilege on private speech, research that ranks country not by GDP but by a host of measures, how Michael Ignatieff has scored on the gun registry battle, some articles about China, the debate about 'free schools' in the United Kingdom, and more depressing news for economy class airline passengers -- are you ready to ride saddle?

The case for a painful structural adjustment.

Today’s article is the first of a two-part series in which I attempt to forecast general economic conditions that will affect the oil market over the next 10 years. Despite Galbraith’s sensible warning, what we will experience in the aftermath of the Great Recession is not a complete mystery. Strong evidence suggests that during the next decade, the global economy will struggle to regain a sound footing supporting vigorous growth.  http://www.aspousa.org/index.php/2009/09/the-aftermath-of-the-great-recession-part-i/

The Wall Street Journal's shorter term take. Pointing fingers.

It's official: The Great Recession ended 15 months ago, in June 2009. That was the word Monday from the economists at the National Bureau of Economic Research, the outfit that tracks the U.S. business cycle based on a variety of economic variables.   http://online.wsj.com/article/SB10001424052748703989304575504053230524906.html?mod=WSJ_newsreel_opinion

 

The Economist's take on audio. A little more complicated, and painful. As ever, a very thoughtful Greg Ip but a little too rosy for my taste.

Our economics editor and our US economics editor on what's holding the economy back, the Bush tax cuts and how to reduce America's debt.  http://www.economist.com/blogs/multimedia/2010/09/americas_painfully_slow_recovery

Out of work longer.

http://www.businessinsider.com/job-losses-since-the-end-of-the-recession-2010-9#average-duration-of-unemployment-is-way-up-9

Still not Japan.

The US economy is frequently compared to Japan in the early days of its lost decade, but here's one way it's way different: the US is a much worse place to be a worker.

 

 

http://www.businessinsider.com/chart-of-the-day-us-japan-employment-rate-2010-9

Personal stories of unemployment in the United States. This is political dynamite in the country of heroic individuals and great dreams.

Articles in this series are examining the struggle to recover from the widespread strains of the Great Recession.  http://topics.nytimes.com/top/news/business/series/the_new_poor/index.html

US poverty watch.

The "America" that so many of us have taken for granted for so many decades is literally disintegrating right in front of our eyes.  http://theeconomiccollapseblog.com/archives/15-shocking-poverty-statistics-that-are-skyrocketing-as-the-american-middle-class-continues-to-be-slowly-wiped-out

Post-Traumatic Financial Stress Disorder. No equities please we are over 35. Pdf below.

For the last two years, American investors have experienced the evolution of Post-Traumatic Financial Stress Disorder (PTFSD).    http://www.bullfax.com/?q=node-post-traumatic-financial-stress-disorder

A public employee burns a religious book in off hours. They were fired. Right or wrong? I think it depends. But on the whole it should not result in dismissal.

This is a very hard case that could make very bad law. Burning a Koran is a despicable act of bigotry that could incite violence by zealots who believe it is direct attack on their faith. But it is also an expressive act that should be protected by our First Amendment. http://www.nytimes.com/roomfordebate/2010/09/19/can-speech-be-limited-for-public-workers/a-dangerous-slippery-slope 

There is more to life than G-D-P.

MANY people complain that conventional measures of GDP fail to capture a country’s true standard of living.   http://www.economist.com/node/17079148?story_id=17079148&fsrc=rss

 

It seems like the private member's bill to kill the Long Gun Registry will fail because Jack Layton has recognized that a successful vote would be put at the feet of the NDP if he did not convince enough of his caucus to vote against it.

As we reported some time ago, this issue is not just about law enforcement -- all the evidence, curious word 'evidence', is that police use the registry regularly and to great effect -- but about women as the genius of the registry was the murder of 14 women in Montreal.

Michael Ignatieff and his advisors seem to have played this one perfectly by insisting that he would whip all of his caucus to vote against it. His next exercise in leadership would be that if a few Liberals get mysterously ill for the vote he must expel them out of the caucus. Thanks to Don of Victoria for asking.

This article in the Toronto Sun typically speaks to none of these issues. No evidence here.

So it’s down to the wire and no one knows who’ll win. But we know who likely loses: That would be us, the taxpayer.  http://www.torontosun.com/comment/columnists/michael_dentandt/2010/09/20/15416556.html

Another smart guy making the case that China has to reform its domestic economy for the global economy to work. I will argue tomorrow at my Rotary Club talk that this is highly unlikely.

The renminbi, not for the first or last time, is the subject of a cacophonous debate in Washington and rising tensions between the US and China.   http://www.ft.com/cms/s/0/643048dc-c4e6-11df-9134-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2010921/nbe/Comment/product

When we consider what makes countries excellent there are three elements in this order: a market-based economy, the rule of law, and instruments of social justice that create a sustainable basis for the improvement of the first two.

For example, societies where an increasing percentage of citizens have private police would not in my view be consistent with an excellent future and in fact are failing nor would societies that gave up trying to create best in class average education outcomes.

Witness what is happening in China and the United Kingdom.

The rise of private bodyguards in China.

They work as drivers or nannies, or blend into a businessman's coterie looking like a secretary, a briefcase carrier or a toady. Unlike bodyguards in the United States, they are generally not tall and imposing; in fact, many are women, on the theory that females in the retinue attract less attention.   http://www.washingtonpost.com/wp-dyn/content/article/2010/09/19/AR2010091904175.html?wpisrc=nl_most

The debate about 'free schools' in the United Kingdom.

The academies bill was rushed through parliament in July with a speed and urgency normally reserved for anti-terrorist legislation. In spite of that, the Liberal Democrats in the House of Lords managed to bring about some helpful amendments and they deserve our thanks for that.  http://www.guardian.co.uk/commentisfree/2010/sep/20/libdemconference-freeschools-academies

Background to Free Schools

The Secretary of State for Education, the Rt Hon Michael Gove has unveiled the first step towards the first Free Schools by inviting groups interested in setting up a new school to come forward and start developing their proposals.    http://www.education.gov.uk/freeschools

 

The Tories vision of 'free schools' started by parents, teachers and voluntary groups is deluded because in reality they will be run by private companies. Is this really a good idea?   http://www.guardian.co.uk/education/2010/may/25/free-schools-private-companies

 

Teachers are proposing industrial action and a wave of protests to block an expansion of academies and the creation of new-style “free schools”.  http://www.telegraph.co.uk/education/educationnews/7505255/Teachers-attack-Tory-free-school-plans.html

 

The new government is pressing ahead with plans which could change the face of schools in England. It talks of "breaking open the state monopoly".  http://www.bbc.co.uk/news/10138787

 

Free, free at last.

 

 

Toby Young hopes children from the local council estate will go to the school.

And finally, a smaller seat at the back of the airplane. The saddle seat good for a four hour ride. What about the 3-hour wait on the tarmac? Yikes!

“LIKE riding a horse,” said Dominique Menoud, the director general of Aviointeriors, the Italian aircraft seat manufacturer, after I had slid into the company’s new “stand-up” airplane seat on display last week at the Aircraft Interiors Expo Americas trade show. As television cameras poked around the display seats for angles, Mr. Menoud asked me, “It is very comfortable, no?”   http://www.nytimes.com/2010/09/21/business/21road.html?_r=2&ref=global