OPINION:
Americans are still asking themselves, “where’s the recovery?” The latest re- ports suggest the answer is nowhere in sight, as the present “recovery” is looking an awful lot like a recession.
The index of leading indicators, a gauge of the economy’s near-term prospects, dipped 0.1 percent. What that means is in the months ahead, Americans can expect to see things getting worse. The 370,000 Americans who just were introduced to the unemployment lines for the first time last week know this first-hand. Those lucky enough to still have a paycheck find themselves worse off, as average hourly wages have declined in real terms over this past year. Labor-force participation continues to reach new lows, which creates the artificially “low” unemployment rate of 8.1 percent as bureaucrats don’t count everybody without a job for their figures.
Finding jobs is growing harder over time. The average length of unemployment now is 34.5 weeks, up from 29 weeks in 2009. More than 40 percent of jobless are considered long-term unemployed, and some 4 million Americans have been looking for work for over a year. Don’t expect new hiring to come from manufacturing, where, for example, the Federal Reserve Bank of Philadelphia reported a sharp decline in output.
It’s no wonder consumer confidence is at its lowest level in months. The latest Bloomberg Consumer Comfort Index came in at a recession-associated level of minus 43.6 for the period ending May 13. That’s down from minus 40.3 in the previous period. The Conference Board’s Consumer Confidence Index dipped 0.3 points, suggesting that consumers are “less optimistic about the short-term outlook.” Bloomberg’s plunge has just about wiped out all the gains from this year. The Philadelphia Fed’s report listed “uncertainty about health-care costs, the inability to find skilled workers and uncertainty about regulations and policies” among the reasons for pessimism.
It’s hard to justify optimism. America can’t escape the effect of Europe’s debt crisis and recession since the continent is one of our most significant trading partners. At home, the federal government still is getting by without a budget, leaving the uncertainty of another debt-ceiling fight with tax hikes scheduled to kick in next year. Despite the best efforts of a handful of conservative legislators, there’s no interest on the part of the Obama administration or the Senate Democratic leadership in addressing entitlements and runaway spending. Liberals would rather punish wealth creators for trying to flee the punitive tax regime, instead reforming our system so successful people have an incentive to stay here.
If the United States is to emerge from this stagnation, we should emulate Canada, which is wrestling to control its welfare state - not France and Greece, which are pretending more deficit spending is the solution. Congress needs to make tough decisions now and restore fiscal sanity and certainty. Only then will consumers have confidence that the economy’s best days are ahead.
Nita Ghei is a contributing Opinion writer for The Washington Times.
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