You Call This a Recovery?

Posted: May 21, 2013 12:01 AM

The familiar saying used to be, “I can afford it, but I don’t want it.”  Conversely, now it’s “I want it, but I can’t afford it.” 

Over the past few days, I’ve been studying both liberal and conservative columnists who have been analyzing the reasons for the pathetic so-called job recovery.  If one were to only look at the stock market, a claim could be made that the recovery is in full bloom — of course that’s the White House spin.  However, all the aforementioned pundits have been trying to figure out why the reality of job growth doesn’t measure up with the fantasy of the stock market. 

If you listen to the National Association of Home Builders (NAHB), as most in the media do, you would believe there is a lack of qualified workers.  Other industries would echo that tune while also proclaiming that job skills diminish the longer a person is out of work, thus further reducing one’s qualifications.  This fact was recently reinforced by a very good friend of mine, Sam.  He’s a thirty-year carpenter who’s been out of taxable and measurable work for well over a year.  In fact, he even told me he’s having a very tough time determining which end of the hammer to use.  However, according to Sam, the underground economy seems to be alive and well. 

Other excuses include the notion that people simply prefer to work part-time — their financial situation is so comfortable that spending a few hours each day pronouncing “welcome to Walmart” simply results in throwaway money. 

There are of course a myriad amount of other reasons for our country’s slippage in real job growth, but I won’t bore you with the details. 

The fact is, as my old professor Dr. John Kenneth Galbraith used to say (paraphrasing of course), “Everything begins with sales.”  If they want it and can afford it, they’ll buy it.  The more they buy it, the more it has to be produced.  The more it has to be produced, the more workers it takes to make it.  The more workers that are employed to produce it, the more wages are paid for producing it.  The more wages in the community, the more it can be bought again and again.

Unfortunately, the pundits, including the media, weren’t privileged to be taught by Dr. Galbraith.  Therefore, the cycle of business is a bit alien to them.  Just think about trying to teach this uninformed group of professed experts about what happens when the cycle goes in the opposite direction — a shuddering thought. 

“I want it, but I can’t afford it.”

Ladies and gentlemen of the press, that’s all you need to know. 

The lesson is now over, at least for today.