This one was just too hilarious to pass by without presenting. It was in fact hilarious enough that it could be presented a la carte without spoiling it by actually commenting on what the CNBC "contributor" had to say...Which means: open season for ZH readers. Take it away.
What the Doomsayers Don't Say to You, posted originally on HuffPo where Ronnie is baaaack.
on the nation's unemployment situation had a little for the bulls and a
little for the bears, when it comes to this nation's economic outlook
for 2011. While the unemployment rate plunged in December to 9.4 percent
from 9.8 percent, only half of the improvement came from Americans
finding new jobs. The other half of the improvement came from
discouraged workers exiting the labor force, which has the perverse
impact of reducing the unemployment rate.
(It's a quirk of the strange calculus that goes into divining the nation's unemployment statistics.)
Only 103,000 new jobs were added to payrolls last month, well below
market expectations and below the 150-200,000 jobs needed to keep up
with population growth and growth in the labor force.
Indeed, Federal Reserve Chairman, Ben Bernanke, in testimony before a
Senate committee, acknowledged that it could be four to five years
before the labor markets return to "normal."
"Normal," as measured in historic terms, implies a 5-6 percent
unemployment rate. There are some who suggest that our labor force never
will return to "normal." But that view is unnecessarily pessimistic and
belies the improvements being seen in the economy, each and every day.
By the way, a quick return to "normal" would imply that the economy
would add about 600,000 jobs a month for over a year, which it rarely,
if ever, has done. Absent such an immediate and stunning improvement in
job creation, there is virtually no way the unemployment rate could get
back to "normal" in less than a few years, under even the most
That does not mean we can't, or won't, see meaningful improvement in
the labor market in the months, and years, to come, that will be felt by
Many on Wall Street and many, many more on Main Street, were
understandably discouraged by the December report and the Fed chief's
comments, as one might expect, given the grudging improvement in the
jobs picture, even as enormous piles of cash build up on bank balance
sheets and in corporate coffers.
But this worry about the economy is beyond misplaced, in my view.
After a serious recession like the one we have just experienced, borne
of an economy gone wild, it is a miracle that we have recovered as much
lost ground as we have, compared to the alternative scenario many of us
were contemplating only two short years ago.
Yet, there remain countless doomsayers who suggest that another, even
more serious crisis, is just around the corner. Citing the possibility
of a renewed credit collapse in Europe, a series of municipal
bankruptcies here in the U.S., or another leg down in the housing
market, they say we are just days, weeks, or months away from that
dreaded "double-dip," or another downturn that will make the first phase
of the "Great Recession" feel like a walk in the park.
My good friends, economist, Nouriel Roubini; author and investor,
Nassim Taleb; hedge fund manager, Doug Kass; and banking analyst,
Meredith Whitney, all repeat a mantra that remains in vogue among the
gloom and doom jet-setters.
They claim that we are being falsely encouraged by recent economic
statistics that create an illusion of recovery that is either being
borrowed from future prosperity, or is the very temporary result of
"recession fatigue," a condition that I never before have encountered.
In short, and for a variety of under-discussed reasons, they are flat-out wrong.
Few of the naysayers have bothered to incorporate into their overly
pessimistic assumptions some truly miraculous developments that have
taken place since Ben Bernanke's "great intervention," which prevented
us from experiencing a catastrophic 1930s-style depression, or a
protracted, Japanese-style stagnation.
Unlike those prior periods, the U.S. economy already has recovered ALL of the lost output since the start of the Great Recession.
- Third-quarter GDP stood at a record 14.7 trillion, eclipsing the peak hit in the third quarter of 2008.
- Retail and food sales, which surged 5.5
percent over the holidays, now stand at1.12 trillion, according to the
Commerce Department -- just under the1.17 trillion peak hit in the 4th
quarter of 2007.
- Consumers have driven down indebtedness, and
added to their savings. The savings rate has jumped to 5.3 percent,
while household debt-service burdens have been cut by228 billion.
- Auto sales are running at a 12.5-million-unit
rate which, while below the 17-million-unit peak at the height of the
economic recovery, is still three million more vehicles being sold than
at the trough of the recession.
- Household net worth, after collapsing by a
staggering17.5 trillion from 2007-2009, has rebounded sharply in the
last several quarters... by nearly6 trillion, not a trivial sum. It
remains well below its historic highs, but has improved significantly
and likely will continue to improve over the next several years.
The statistics mentioned speak for themselves. In addition, market-based
indicators, from stock prices to interest rates and commodity prices
are, in tandem, forecasting improving future growth, not a return to
recession. These indicators, when flashing the same signals
simultaneously, rarely have delivered an errant forecast.
While many remain deeply concerned about the fragility of what might
be the start of a self-sustaining economic recovery, there is real
reason for optimism that, indeed, a true and lasting recovery is
As I return to blogging for The Huffington Post, I despair over a
political environment which has led us down a path that now goes beyond
partisan politics, as of this past weekend, to one of a clear and
I also worry that far too many voices continue to prey on the
financial fears of a society that has seen more than its share of
problems and pain.
And, while I often have been described as a Cassandra, and rarely a
Pollyanna, for the first time in many years, I see reason to rejoice in
an economic recovery that, while uneven, appears to be gaining strength
and durability every day.
If only our political situation would improve as much as our economic
condition, I would hold even greater hope that happy days are, indeed,