Posted by: James Atticus Bowden | January 5, 2011

Over Two Years to Get Here

The economy is where it should have been about 8 to 12 months after the Housing Bubble burst.  The Dow is around 11,600 and gaining.   So the glass is half full.  It is ready to grow.  It has recovered to economic homeostasis – like water sloshed around finds its own level and temperature.

Nothing Obama and the Dems did contributed to any economic recovery.  The market is simply establishing a new status quo.  The market adjusted for the loss of $2 T of phony money in the housing market – hot air from the housing bubble.  But, this status quo is about $5 Trillion dollars less than 2008.  $5 Trillion = 10 Million jobs.   Let the recovery begin.

If the new – let’s round off and call it – $25 Trillion economy grows at 3% in 2011 then $750 Billion dollars in capital will grow.  $750 B = 1.5 Million jobs.  Obama will crow success.   But, the $30 Trillion economy that would have rebounded after the bubble – almost 2 years ago – would produce 1.8 Million jobs.  300k more jobs in Year One of recovery – a year one that would have started 2 years ago.  And a recovery starting from a higher plateau.   The economy would have coped with $2T in lost capital, not the extra $5 T.

Let the recovery begin – if government doesn’t screw it up again.  Like driving up energy costs by restricting oil supply.  Like causing inflation with monetizing the debt – QE II.  Just remember how much smaller the glass is – that is now half full.

The recovery is 2 years late.  The recovery will be 300k jobs short in year One.


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