In Tuesday’s WSJ, Edward Lazear argued that we are now experiencing the “Worst Economic Recovery in History”. Before dissecting this remarkable document, it would behoove the reader to recall that while he was Chair of George W. Bush’s Council of Economic Advisers, he stated unequivocally in May 2008 (also in the pages of the WSJ):
"The data are pretty clear that we are not in a recession."
Here I offer some observations on what's been holding back the recovery.
Two of the most important sectors in U.S. business cycle fluctuations are autos and housing. For example, in the 2007:Q4-2009:Q2 recession, real GDP fell on average at a 2.7% annual rate, with autos and housing accounting for about half of this decline all by themselves.
By Crunching Numbers:For a long time Americans have had a love affair with the automobile. It has been much more than a mode of transportation. For the teenager it was a rite of passage. You studied the driver's manual more thoroughly than any high school text book to pass the written test. You passed and received a learner's permit with a picture taken by someone whose pay must have been based on how well they could highlight the facial feature you were most insecure about.
ContributorNetwork - COMMENTARY | Do you love Social Security? Apparently most Americans do, because it's considered the "third rail" of American politics: touch it and you die. We Americans love Social Security because it provides income for life and cost of living increases (your 401K can't do that), and it's guaranteed by the government and isn't at the mercy of the stock market or the high fees of Wall Street "fat cats."