May 1, 2014

DUDE, WHERE’S MY RECOVERY? Megan McArdle: Recovery? What Recovery?

Relatedly, it’s undoubtedly true that the weather depressed economic output. But it didn’t depress economic output enough to explain these lackluster figures. If economic growth were actually healthy, it shouldn’t be possible to see numbers this low.

No, despite the caveats, the fact remains that we seem to be stuck. Six years after the financial crisis, we still haven’t entered anything that could really be called a “recovery.” A recovery would mean some sort of catch-up growth that reabsorbed stranded workers and capital. Instead, we’re barely limping forward, and the most cheerful thing we can say about any of it is that at least we’re no longer falling back.

Even that’s not clear. The numbers are as likely to be revised downward as upward. The truth is, we don’t have a recovery, because we’ve had the systematic imposition of policies — tax increases, redistribution, and especially regulatory uncertainty — that undermine economic growth. But a lot of insiders have gotten rich.