Voices
momentum and, more generally,
the economy is having problems
maintaining the growth vigor required to attain escape velocity
and thus overcome the downward
drag of too much debt accumulated over too many years.
After three encouraging monthly
employment reports (December
2011 to February 2012, where average net monthly job creation
exceeded 200,000 in the context
of generally improving economic
data), the economy added fewer
than 100,000 jobs per month in
the next three-month period; worst
of all, net new jobs in May came
in at a disheartening 69,000. Taking into account those not counted
because they have dropped out of
the labor force altogether, the proportion of the adult population
with jobs today is stuck at around
58 percent. This compares to the
mid-60s-percentile numbers that
prevailed in the years prior to the
2008 global financial crisis.
All this speaks to both the extent of the economic and financial
mess inherited by Obama and the
inevitable difficulty of engineering
a “normal recovery.”
Whoever had come into the
White House in January 2009
would have been challenged by an
MOHAMED A.
EL-ERIAN
HUFFINGTON
06.17.12
economy that faces unusual and
significant impediments in gaining the cyclical traction that has
been “typical” in the past – what
we labeled back in May 2009 as
the “new normal.” Indeed, even
the unprecedented amount of fiscal and monetary stimulus that
has already been applied — an extraordinary turbocharge if you like
— has not enabled the economy to
attain escape velocity.
The message is clear. There are
multi-year supply and demand
problems that speak
loudly to why the
economy’s recovery
This is
remains disappointnot the time
ing. No wonder it has
to risk yet
proven so inadequate
another mid– especially in light of
year economic
all the Americans that slowdown
are out of work, those
that could
that are having enoreven risk a
mous difficulties makrecession.”
ing ends meet, those
that have already
slipped into the poverty trap and
the too many that have insufficient
savings for their retirement years.
And all this in an economy that,
under Obama’s predecessors, got
significantly more unequal in its
distribution of income and wealth
and, therefore, its social compact.