When Will The Recovery Begin? Never
by Robert Reich
CommonDreams.org: July 10, 2009
The so-called "green shoots" of recovery are turning brown in the scorching
summer sun. In fact, the whole debate about when and how a recovery will
begin is wrongly framed. On one side are the V-shapers who look back at
prior recessions and conclude that the faster an economy drops, the faster
it gets back on track. And because this economy fell off a cliff late last
fall, they expect it to roar to life early next year. Hence the V shape.
Unfortunately, V-shapers are looking back at the wrong recessions. Focus on
those that started with the bursting of a giant speculative bubble and you
see slow recoveries. The reason is asset values at bottom are so low that
investor confidence returns only gradually.
That's where the more sober U-shapers come in. They predict a more gradual
recovery, as investors slowly tiptoe back into the market.
Personally, I don't buy into either camp. In a recession this deep, recovery
doesn't depend on investors. It depends on consumers who, after all, are 70
percent of the U.S. economy. And this time consumers got really whacked.
Until consumers start spending again, you can forget any recovery, V or U
shaped.
Problem is, consumers won't start spending until they have money in their
pockets and feel reasonably secure. But they don't have the money, and it's
hard to see where it will come from. They can't borrow. Their homes are
worth a fraction of what they were before, so say goodbye to home equity
loans and refinancings. One out of ten home owners is under water -- owing
more on their homes than their homes are worth. Unemployment continues to
rise, and number of hours at work continues to drop. Those who can are
saving. Those who can't are hunkering down, as they must.
Eventually consumers will replace cars and appliances and other stuff that
wears out, but a recovery can't be built on replacements. Don't expect
businesses to invest much more without lots of consumers hankering after
lots of new stuff. And don't rely on exports. The global economy is
contracting.
My prediction, then? Not a V, not a U. But an X. This economy can't get back
on track because the track we were on for years -- featuring flat or
declining median wages, mounting consumer debt, and widening insecurity, not
to mention increasing carbon in the atmosphere -- simply cannot be
sustained.
The X marks a brand new track -- a new economy. What will it look like?
Nobody knows. All we know is the current economy can't "recover" because it
can't go back to where it was before the crash. So instead of asking when
the recovery will start, we should be asking when and how the new economy
will begin. More on this to come.
Robert Reich was the nation's 22nd Secretary of Labor and is a professor at
the University of California at Berkeley. His latest book is
"Supercapitalism."
***
From: The RAIN Newsletter (18-7-9)
http://desertpeace.wordpress.com/2009/07/17/thank-you-alan-dershowitz/
THANK YOU ALAN DERSHOWITZ
Desertpeace July 17, 2009
Norman Finkelstein the scholar has turned into Norman Finkelstein the
activist - and a good one. They threw him out of Israel last year but he
went to Gaza with CodePink and is now organizing something big. Dershowitz
will regret the day he got him fired and freed up all his time and energy.
Some dark clouds do have a silver lining.
Commentary by Chippy Dee, Photos by Bud Korotzer
SEE ALL THE PHOTOS OF THE MEETING HERE
http://desertpeace.wordpress.com/2009/07/17/thank-you-alan-dershowitz/
Earlier this week 200 people crowded into a very warm room to hear
eyewitness accounts and analysis from members of delegations who went to
Gaza as part of the international campaign to break the Israeli blockade.The
event was hosted by the Brecht Forum. The speakers were Sammer Aboelela,
organizer of the N.Y. Community of Muslim Progressives, Medea Benjamin,
co-founder of CodePink, Norman Finkelstein, author, political scientist
specializing in Mideast studies, Felice Gelman, leader of the N.Y.
delegation to Gaza and member of WESPAC and Phil Weiss, journalist and
author of the Mondoweiss Blog.
Some speakers described the terribly difficult living conditions in Gaza and
others spoke of the remarkable spirit of the people there despite the daily
hardships. We were told that there is no cease-fire in Gaza. Israelis are
still shooting at farmers and fishermen who risk death just by going to
work. They are shooting at fishermen who are only 300 yards off shore,
clearly where they are entitled to be. In these acts of piracy they are
kidnapped, taken to prison, and their boats are confiscated. If and when
they are returned they are returned damaged. Tunnels are used to bring
essentials in from Egypt. They are not hidden, they are on main walkways and
are privately owned and operated. When Israel pressures Egypt about the
tunnels the Egyptians pump methane gas into them.
The ongoing persecution from Israel is having an extremely detrimental
psychological affect on the children. Some try to act like tough guys, as
they see Israelis to be. Some look to their fathers for protection but the
fathers, unemployed and powerless against Israeli abuse, can do nothing. We
saw slides of the children's art showing their view of the military attack
against them.
Norman Finkelstein spoke of the current perception most of the world has of
Israel. He said that Israel is seen as a satanic state. Many organizations,
the Red Cross, the United Nations, Human Rights Watch and Amnesty
International documented Israeli human rights abuses. Amnesty International
issued two reports on the subject. In effect, they agreed that Israel was
guilty of crimes against humanity, another way of saying 'war crimes'.
Medea Benjamin described walks through the halls of congress that she and
other CodePink members made trying to talk to representatives and senators
about what Israel is doing. With very few exceptions their words fell on
deaf ears.
Norman Finkelstein and Medea Benjamin proposed a very big, and long walk to
Gaza. In order for it to work there would have to be many participants.
People would gather in Egypt near the Rafah crossing, walk through into
Gaza, walk through part of Gaza to the Erez crossing, cross into Israel
where they would be met by a contingent of Israeli peace activists. The
logistics would have to be worked out. There was great enthusiasm for the
plan and many people in the room volunteered to participate. For those who
could not go there would be a series of marches in the U.S. at the same
time. One person in the audience suggested that the event should start in
Washington with many people visiting their congress members to talk to them
about cutting the billions of dollars given to Israel each year.
Andy Pollack spoke after the panelists did. He reported that the Viva
Palestina-US delegation had reached an agreement with Egypt and that all the
medical aid would be delivered to the people in Gaza very shortly. There
were some conditions; convoy participants could only stay for 24 hours, and
the ambulances could be donated but the trucks could not. The audience
reacted to the news with joy.
There was a question and answer period and one young Palestinian woman spoke
about the 11,700 Palestinians, serving indeterminate sentences, that are now
undergoing daily torture in Israeli prisons.
Other questions and comments dealt with the importance of working together
despite differences of opinion on some issues. One area of work was the
divestment, boycott and sanctions campaign. Several people spoke on
activities in that area with Motorola (see www.boycottisraelnyc.org for
further information) and with Ahava cosmetics which are produced in an
illegal Israeli settlement in the occupied Palestinian West Bank (for more
information on this campaign go to www.stolenbeauty.org)
When the meeting ended there was a general sense that there was a lot of
work ahead but there was also optimism because important changes were
occurring. Minds and perceptions were changing in a positive direction both
inside and outside the Jewish community.
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