Mr Trump said something quite profound last night and I suspect most people missed it.
He said that the economic recovery, that President Obama and Hillary Clinton laud as their great success, is only a financial recovery. His exact words, “Now, look, we have the worst revival of an economy since the Great Depression. And believe me: We’re in a bubble right now. And the only thing that looks good is the stock market…”
What is a ‘financial recovery’ versus a ‘real economic recovery’? Let’s examine what an expert says.
Harvard economist Clayton Christensen outlined in a talk that he gave about business growth. what has happened with economic recoveries after recessions. You can watch the talk HERE. It’s well worth watching the first 9 minutes. Watch the whole thing if you’re a business-gloid!
Summarizing what Christensen said, is that during a recession jobs are lost and companies will work to fulfill their business obligations with remaining staff. The recession bottoms out for a period of time but eventually a company will need to start hiring staff as the economy recovers and sales increase.
Christensen states that there have been NINE recessions in the US since World War 2. During the first SIX recessions the average time was six months after hitting bottom that hiring started again.
The seventh recession was in 1991-2 and that recovery took 15 months.
The next recession was in 2001-2 and that recovery took 39 months.
The ninth and latest recession was in 2007-8 and that recovery took SIX YEARS.
Christensen says about this latest recession recovery, “These rebounds are financial and not real in character“. Hmmm, sound familiar?
He goes on to say, “So people who have money get a lot of money faster. But the rest of us, there are not a lot of jobs in which we get slotted in anymore”.
“And there is something that has fundamentally gone wrong with our economy“.
The numbers bear out what Mr. Trump and Mr. Christensen point out.
The White House touts that because of their wonderful economic policies that there are only 7.5 million people unemployed. They conveniently forget about the 94 million workers who just dropped out of the work force because they can’t get a job.
I agree with Mr. Christensen that something “has fundamentally gone wrong with our economy“.
Who would you rather have taking charge of our economy, a businessman or a political wonk whose new plan is a massive expansion of the same old failed plan? I guess I’m pretty ‘deplorable‘ for asking that question.
“Meet the new boss, Same as the old boss”, The Who.