Slow USA Econ Recovery Chapter Term Paper
- Length: 20 pages
- Sources: 20
- Subject: Economics
- Type: Term Paper
- Paper: #17506709
Excerpt from Term Paper :
The article concedes, however, that declining business confidence is an absolute danger that must be dealt with and the government not being an active partner with businesses and in favor of the recovery will just make things worse (Pollin, 2010).
A similar point is made in a different article that states that the role of fiscal policy in pushing an economy towards recovery cannot be over-estimated or over-analyzed because of the vital role fiscal policy plays in said recovery. The article notes that the impact (or lack thereof) of programs like Temporary Assistance to Needy Families (TANF), Medicare, tax credits, Social Security, direct subsidies, unemployment insurance and such are often included in any analysis of fiscal policy but it also noted that many parties that look at this topic glaringly omit are transfer payments and other assistance paid directly to financial institutions (Tcherneva, 2012).
This perhaps became a much less hidden topic when the Troubled Asset Relief Program (TARP) was unlashed in 2008 and its "part two" program referred to as the Financial Stability Plan of 2009. The latter is often referred to as "TARP II" in many circles. The article notes, however, that the real issue in the Great Recession (and as noted by other authors cited in this literature review) is that the job market being in such dire straits was the real issue and that infusing money into credit markets was just a "Band-Aid" and did not address the real issue. The article labels the policies of both George W. Bush and Barack Obama as being inadequate in this regard (Tcherneva, 2012).
That same article also points out that as late as mid-2008, more than six months after the Great Recession had started in late 2007, even the Congressional Budget Office (CBO) was projecting economic growth of 1.9% in 2008 and 2.3% in 2009 with unemployment rates in the five percent ranges. Of course, in hindsight, that is not even close to what happened and 2008 was a disastrous year from an unemployment and GDP growth perspective and the recession didn't end until 2009 (Auerbach, Gale & Harris, 2010).
As far as hidden symptoms that make growth anemic to non-existent, one article points to the situation whereby many employers seeking skilled laborers are unable to find the qualified people that they need and the article states clearly that this is a factor and condition that can threaten or at least slow down economic growth or recovery. The article points to engineering in particular as being a field where the job postings out there are not met with strong applicants that have the tools, education and skills to fill those jobs to a level that would be acceptable to the hiring managers and firms (Lenton, 2009).
Another bit of research suggests that while the economic growth in the 2000's was moderate, a lot of that growth was driven not by organic and sustainable job growth but instead by a housing market and other ancillary markets that were being fueled by unsustainable valuation increase. When the bubble burst in 2007 and 2008, the damage was quite clear and it's stated that it's no wonder that the economy has been stuck in the doldrums even after the recession supposedly ended in 2009. However, it is clear from this report that the person who wrote it is a pro-Obama person because the "activist" overtones mentioned in the earlier article are completely opposite in this article (Krueger, 2012).
A different article notes that the depth and breadth of the economic fall that occurred in 2007 and 2008 will require more than fleeting or menial efforts to recover from and it should not be assumed or conjectured that anything different shall happen. It is noted that this is true not only in the United States but in the Eurozone and China as well. The article also notes that when one of those three members of the triad (China, EU and America) falter, it affects all three quite clearly even if there is a bit of lag time between the cause and effect or at least the ability to measure a change (Steinbock, 2012).
Another report focuses on the anemic job growth that is present in the United States and looks at the practices of off-shoring and trade in general as being things that affect the output and size of the American job market. Like the earlier report about lack of qualified applicants, this article points heavily to people artificially being discourage from going back to school and collecting the skills that will make them in-demand with the employers that are actually hiring even when overall economic conditions are putrid (Baily & Lawrence, 2004).
This condition is amplified by the fact that the service portion of the United States job economy has not created massive amounts of jobs since the 1990's. Also, manufacturing in the United States is never going to be what it was and the article in question was written in 2004. As such, it seems quite prescient and forward-thinking right now. It is quite easy to see that much of the manufacturing done domestically in the United States is for more complex and high-tech endeavors more often than not and the more simple products and processes are often forced south into Mexico and/or Latin/Central America or over to corners of Asia like China and the like (Baily & Lawrence, 2004).
Indeed, when looking at job losses and gains by sector, some very clear trends come to light. For example, manufacturing is far and away the biggest lower and 2000-2003 was especially traumatic to that sector with more than 800,000 jobs going away per year. However, sectors like Construction, educational/health services, government, other services and leisure did really well. Job losses, when compared between 1990-2000 and 2000-2003 are quite mixed in industries such as wholesale and retail trade, transportation and warehousing, and professional/business services. Many of them did fine in 1990-2000 but have suffered since then. Only the educational/health services, leisure/hospitality, other services and government sectors had a net gain for both time periods. All of the others either had both period being bad or they were one or the other depending on the period (Baily & Lawrence, 2004).
An article written in 2011 lays blame for the Great Recession and its sheer size on the supply-side and other anti-Keynesian policies that were emblemized by the George W. Bush administration and other Presidents before him. The article notes that many people tried to point to Keynesian/FDR policies as being the genesis of the Great Recession and then pointed to the same as delaying the recovery as such plans were implemented by the Obama Administration and the broader Democrat-controlled Congress, which they held in total up until the mid-term elections of 2010 (Niemi & Plante, 2011).
The same article points to the supposedly slow death of the middle class that has been typified by middle-class jobs being the most pervasively scuttled jobs in economic hardships and always the last to come back, assuming they ever come back. This is echoed in other articles in this literature review when they state that while knowledge-sector jobs are scouring the landscape for applicants, service-related job growth is pretty poor and that is eyebrow-raising considering the overall size of the service employment sector in the United States (Niemi & Plante, 2011).
Indeed, the United States two core job classes nowadays are the knowledge sector and service jobs and the fortunes of those two job sectors often parallel in many ways but have diverged in many others and the latter has left less-educated people holding the short end of the stick. Even ostensibly skilled workers are being squeezed out of the knowledge sector and are thus relegated to taking jobs that service-level employees would typically take and this causes an even bigger squeeze on people that are truly unqualified for upper-tier jobs (Niemi & Plante, 2011).
This has led many to say whether the economic conditions that were present as recently as 2012 were indicative of a recession or a recovery ("2012 Recovery," 2012). One major reason for this was noted in an article published the same year and that pertained to the sharp rise in oil prices that was occurring around the world and how that threatened the economic recovery in the United States and other corners of the world. Indeed, factors that have little if anything to do with the recession or what caused it can cause an economy to sputter or even start to retract again. ("Once again," 2012).
Even so, even the real estate industry was cautiously optimistic in 2011 as many saw modest but not stellar growth on the horizon. Even if it was often deemed to be a case of the "the worst is over," many people were more and more optimistic as more time passed between the 2007-2009 recession and the present day. However, real estate barons have to…