The Great Recession, the Economy, and the Unemployment Rate

The Great Recession, the Economy, and the Unemployment Rate

The latest U.S. winter outlook spells trouble for dry California cities. The Associated Press reports that San Francisco’s annual snowfall is down 15.4 percent from the same time a year ago. The trend will likely continue, particularly for cities where more snow falls in the spring than in the winter.

At the University of Michigan, two professors have published a “new” (!) paper on “what’s up with our economy and jobs” (and, by extension, our state). The findings are similar, but the conclusions are different. More on that below.

In a paper called “The Great Recession, the Economy, and the Unemployment Rate,” William Gentry of Michigan’s University of Michigan and Scott Page of the University of Southern California write that the unemployment rate will likely not go down and the economy will likely not recover over the next few years no matter what. They are also convinced that the Great Recession is far from over in America. Gentry’s argument is that the recession may have actually begun earlier than the recession officially announced in late 2008 and that we will probably not fully know when/if it ends.

Michigan’s Governor Rick Snyder, like many other economists, does not think the Great Recession will “end” any time soon. He says that this is “our economy’s longest and deepest recession, and I think that this kind of situation is never going to end.”

However, we do know that the US unemployment rate last month fell below 8.5% for the first time since January 2008. Most economists now believe that the recession (unlike the Great Depression) is over. If and when it ends, it will do so because the unemployment rate falls below 6% in most of the country.

And it’s not over just because a majority of economists believe this, because the “economy” does not work without government and taxes to spend the tax money.

Here are some key take-away points from the economic report:

* The US economy is not growing: It grew 2.4% in Q1 2008 but has grown only 1.5% in Q1 2009.

* The US economy shr

Leave a Comment