‘Green shoots’ a lie, Greater Depression still unfolding nicely
Like a lot of other people, I have been alternately galled and amused in recent months to hear all the talk of economic “green shoots” that started back when Ben Bernanke first used the term in February during a 60 Minutes interview (and thereby became the first Fed official ever to do so, even though the economic use of term itself dates to the early 90s). In a culture defined by the universal manipulation of rhetoric and image — what Morris Berman has perceptively identified as “the merging of hype and life” — this type of deliberate rhetorical injection into the world of mass mediated public discourse is nothing new. But the Bernanke-inspired “green shoots” meme came off as a particularly blatant and pathetic attempt to manipulate reality by manipulating public perception.
(And of course it did achieve some traction by achieving ubiquity, exactly as intended:
The current recession has created at least one growth industry: use of the phrase “green shoots.”
Since Federal Reserve Chairman Ben S. Bernanke first uttered the words almost four months ago to describe signs of a thaw in frozen credit markets, instances of the botanical metaphor in the press have climbed sevenfold. A Google search for “green shoots” returns 4.86 million hits.
“These may be the two most overused and annoying words of my investment career,” said John Mauldin, president of Millennium Wave Advisors LLC in Arlington, Texas. “Every possible sign of a recovery is anointed with the phrase.”
“‘Green Shoots’ Take Over the Lexicon, If Not Economy,” Bloomberg, June 30, 2009)
Various sensible observers have recognized and said all along that the purported grounds for economic optimism were greatly exaggerated. Now, over the past week or so, in light of ongoing and worse-than-expected job loss plus various other negative indicators — such as the looming disaster in the commercial real estate market and the utter failure of American consumers to “lead the recovery” by getting out and spending more — attempts at optimism are withering and widespread doubt is being expressed about the efficacy of Obama’s recovery plan.
Amidst all of this, I’m perceiving a significant shift in mainstream media coverage of our economic plight. For the past year the mainstream media have appeared positively panicked as they’ve scrambled to catch up with what everybody else already knew: that things are dire. The collective tone of all the TV, magazine, and Web reports has felt frenetic, hyped, and overblown. But now all of that craziness seems to be clearing, and what we’re left with are fairly, and admirably, sober assessments of where we realistically stand.
This includes, notably, a blog post four days ago at MSN — as mainstream as you can get — that points out a reality many people have known but hardly any mainstream media outlets have touched: that the real unemployment numbers are far higher than the officially reported figure, thanks to various tweaks that have been made over the years in how the number is calculated. “Not to scare you,” the post’s author says, “but the situation is actually worse than it seems,” with the real unemployment number probably falling somewhere between 18 and 21 percent, and with many long-term unemployed people beginning to reach the end of their unemployment benefits period. “Unless the economy starts getting traction here in the third quarter,” the writer says, “we could face a situation where people find that they have no job and no unemployment benefits. For these people, 2009 will feel an awful lot like 1932. As a result, spending cuts will be deep and dramatic.”
Are we having fun yet? Would it be vulgar to say something like, “Green shoots, my ass”? (Too late now.)
A nice summary statement of the situation is provided by popular financial writer Martin D. Weiss, Ph.D., in a July 6 post at his Money and Markets website. It’s titled “The Great Lie of 2009.” I’ll give you three guesses what that great lie is. Please read the following, noting as you do so that it paints a grim enough picture in purely financial and economic terms, without even factoring in the peak fossil fuel situation, which actually caused the economic crisis (pdf). And then accept my good-luck wish for you as this situation gets even more, to put it obliquely, interesting.
Just as the authorities were touting the “end of the financial crisis,” all heck has broken loose again.
We have a new surge in unemployment, and even without counting those who are excluded from the official numbers, 14.7 million are now jobless, the most since records dating back to 1948. Worse, for the first time since the Great Depression, every single job created after the prior recession has been wiped out.
We have industrial production falling at the same pace as it did in the early 1930s. . . and global trade falling at twice the pace of the early 1930s.
We have California — the nation’s most populous state, with the largest GDP and the greatest impact on the entire U.S. economy — collapsing.
We have consumers slashing their spending, small businesses laying off their workers, cities and states forced to gut their budgets.
We see the most radical government countermeasures in a 100 years, the biggest federal deficits in 200 years, plus the swiftest swings — from greed to fear and fear to greed — ever.
Yet, for the past four months, virtually every policymaker in Washington and every pundit on Wall Street has been telling you The Great Lie of 2009: “A Recovery Is Around The Corner.”
On March 15, Fed Chairman Ben Bernanke told CBS News’ “60 Minutes” that he detected “green shoots” in the economy. And every day since, economic soothsayers have been surveying the landscape, sifting through crops of weeds, trying to find those green shoots. But from the very outset, editors Claus Vogt, Mike Larson and I have told you this is not a garden-variety recession. It’s merely the first phase of a far longer, deeper depression.
And now, just within the past few days, the myth of “green shoots” has been shattered, the reality of the still-sinking economy revealed.