Radio commentary, August 21, 2010
[Since today’s show was unusually filled with material—a rerun of the Diane Ravitch interview that first ran last April—I kept the introductory comments short. But I did want to get this on the record, for people who think I’m something of a happy-talker.]
Evidence of an economic slowdown continues to roll in. First-time claims for unemployment insurance, filed by people who’ve just lost their jobs, have been creeping up for the last few weeks after falling for most of the year. It’s quite possible that the weak job gains of the last few months—they were weak, but at least they were gains—could turn back into losses this month or next. That would be very bad news, both as a measure of the state of that abstraction we call the economy and for the human beings involved. Unemployment causes not only impoverishment, but depression (the mental as well as the economic kind), anxiety, sickness, and—no exaggeration—early death. But our leaders are more interested in how we can balance the budget by cutting Social Security—Obama has said he’s open to “modest adjustments” to “strengthen” it, which way of saying “cuts”—than a jobs program.
And the portents for the future are looking worse, too. The weekly leading index from the Economic Cycles Research Institute, designed to forecast changes in the broad economy three to six months out, has been trending downwards since April and is now at a point where a second leg of recession is looking like a real possibility. I’ve been saying for the last few months that we were in a weak recovery that would feel to many people like we were still in recession; we may now be on the verge of something worse.