WHY GDP IS UP WHILE EMPLOYMENT IS DOWN

From Paul Krugman's excellent blog (August 21, 2009):

"Barara Kiviat asks, is this a recovery or isn’t it? The answer is yes.

I’ve been pointing out for a long time — well before the crisis hit full steam — that recoveries ain’t what they used to be. Basically, the standard definition of a recovery is that it’s when GDP starts to rise; but “jobless recoveries”, in which unemployment keeps worsening long after GDP has turned around, have become the new normal. Bill Clinton was able to run on the economy, stupid, well into an alleged economic recovery; the 2001 recession formally ended in Nov. of that year, but it didn’t feel like a recovery until the second half of 2003.

I really don’t understand why anyone is surprised that it’s happening again."
***

Here is my own take on it, to explain that apparently strange phenomenon:

As the hyper rich gets ever hyper, more and more of the rise in GDP is absorbed by them. So, recovery after recovery, the hyper rich climb up the ladder of owning more and more of everything. This is in part caused by the ever greater "efficiency" of the economy, meaning the decent jobs of yesteryear are gone to developing nations. Every down cycle is a pretext to augment said "efficiency", and sending more jobs away, or diminishing their cost.

Hence the effect that is observed, of recovering GDP ever more accompanied by sluggish recovery in employment and its quality.

It would be good to look at median income instead of GDP to evaluate the depth and nature of economic crises. My bet is that, averaged over all and any twenty year periods, the present crisis of median income would reveal itself to be greater than the one centered around the 1930s...

This will go on, until it is understood by the People who vote that plutocracy is global, although law is only local. Thus global plutocracy can "navigate" (a concept Barack Obama loves), around local law, just as any long wavelength wave can navigate around small isolated obstacles...

Patrice Ayme
http://patriceayme.wordpress.com/