Home > General Comment, shorter work time > Are we all on the same page yet? (Economic talking points edition)

Are we all on the same page yet? (Economic talking points edition)

September 3, 2010 Leave a comment Go to comments

This will only hurt a little...

There is a subtle urban myth being replicated by the media, of which you should be aware; see if you can spot it in the examples we provide  below:

Reuters: Obama: US economy still needs time to heal
Thu Aug 5, 2010 11:45am EDT

CHICAGO Aug 5 (Reuters) – President Barack Obama said on Thursday that his economic recovery efforts were beginning to pay off but that the U.S. economy still needed more time to heal.

Bloomberg: U.S. Economy: Gain in Payrolls Shows Recovery More Entrenched
April 02, 2010, 12:21 PM EDT

Treasury Secretary Timothy F. Geithner said the U.S. economy is showing signs of entering a period of sustainable growth as companies begin to hire.

Time to Heal’

“We have some more work to do, but I think the economy is definitely getting stronger,” Geithner, 48, said in an interview today with Bloomberg Television in New York. “We’ve made a lot of progress, we’ve got some work to do still and it’s going to take some time to heal the damage.

Todayszaman.com: Recovery will take time; corporate complaints predictable

Not all recessions are created equal. Recessions caused by financial crises take a lot longer to dig out of than their more common cousins. One is like the flu. The other, a car crash. When the flu goes away, you’re good. When a collision spins to a stop, that’s when the long, slow process of healing begins.

Boston Globe: Economy slows; a 2d slump is feared, Fed chairman vows a vigorous response, By Erin Ailworth, Globe Staff, August 28, 2010

Robert Shiller, a professor of economics at Yale and cocreator of the Case-Shiller Home Price Indices, said that the economy generally is able to ride out temporary setbacks and heal itself.

“This time, I’m worried that it won’t, that we’ll have another recession,’’ he said, adding that he sees a strong likelihood of a double-dip recession. “Unemployment seems to be stuck at an extremely high level.’’

Guardian.co.uk: German economy surges ahead at record pace, Julia Kollewe, Friday 13 August 2010 11.16 BST

“After three difficult months of eurozone battering, today’s numbers will help to heal the eurozone’s wounds. For the first time since the second quarter of 2009, the eurozone outpaced the US economy,” said Carsten Brzeski at ING.

It is thought the eurozone has benefited from exports, investments and a backlog of work in catching up of the construction sector after a harsh winter.

National Public Radio: Worries Over Jobs Numbers Ahead Of New Data, by Yuki Noguchi

“Stimulating consumption helped contain the recession, it’s not going to help us in the recovery,” he said. “In fact, it could make things worse.
“What we need to do is shift from consumption to investment in order to start the process of rebalancing the U.S. economy.”

Rosen says investment in new production and technology is the only way to create permanent opportunities for workers. Other economists believe that the economy can, and will, heal itself over time.

Analogy is a powerful tool. But, it has a potentially disturbing attribute: it can be used to frame our entire view of events. Our understanding of the event, despite appearing facilitated by the analogy, is, in fact, reduced by it. The actual situation is distorted and obscured.

Here, we are being asked to consider the economy as a patient who has suffered some sort of massive trauma. We, the distraught relatives of the injured patient, are being told by the medical staff that our loved one will survive and pull through this devastating injury. But, it will take time. Really. We must be patient. We cannot rush these things. Nature must take its course. The healing process has already begun and any further intervention may make things worse.

The Problem: Economies don’t heal; they die. That is the entire point of industrialization — to kill work and effort. So, you are actually being asked to sit quietly and watch work die, despite the fact that no provisions are being made for its passing, and you have no other way to acquire the means of life except to hire yourself out in return for wages.

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