What Happened to Recovery Summer?

Recovery summer? It isn’t just conservatives who are looking for it. The Democratic Underground asked in June, 2011 “what happened to green shoots and recovery summer?”


By late 2010 it was clear that “Recovery Summer” didn’t happen. The Economist, writing a postmortem to the year, believed a combination of bad luck and fiscal timidity was responsible for the fizzle. “The story implies that the Fed, by waiting until August to signal a policy change, cost the economy between 100,000 and 200,000 jobs a month for four months. Add to that the sharp decline in state and local government employment in recent months, which could have been reduced through additional federal financial aid, and it doesn’t seem that big a stretch to say that two government policy failures can be blamed for an employment shortfall of close to a million workers.”

The conventional wisdom was that the economy needed government intervention to get it going again. NPR, also writing in late 2010, reacted like the characters in those horror movies when they discover the magic potion, which they were relying upon to halt the demon, had no effect on the denizen from hell.  Wasn’t the stimulus supposed to stop the slide? Fire that phaser again, Mr. Zulu. And again. So why was there no effect? One clue was the NPR noticed that government spending had little impact on private sector hiring.

Whatever happened to recovery summer?

This was supposed to be the season the economy heated up, thanks to a wave of public works projects, funded by the government’s stimulus program. But summer is coming to an end, and the recovery has not taken root. (The Labor Department on Friday reported a slight rise in the unemployment rate to 9.6 percent in August as more people were looking for work.)

And before long, stimulus dollars will be fading like autumn leaves. …

Private-sector hiring dropped off sharply in the United States after the Greek debt crisis. And by mid-August, the president’s Gallup approval rating had fallen to a record low of 41 percent. It’s bounced back a bit since then, but congressional Democrats still face the prospect of big losses in November.

“There are still 15 million people looking for jobs. There’s still a great deal of uncertainty,” said White House political adviser David Axelrod, when asked about the president’s shaky approval. “You know we have challenges we have to continue to fight through. It’s not going to be a straight line. It’s not going to be easy.”

On Monday, Obama huddled with his economic advisers, looking for new ways the government could promote hiring. But as the president spoke to reporters in the Rose Garden afterward, even a balky White House audio system seemed to be working against him.

“Let me try this one more time,” Obama said, tapping on his microphone.


May the President should try something else this time, such as considering whether his solution has contributed to the problem. It may be heresy to suggest it, but consider this thought experiment.

If the society were like a human body, an observer from Mars would notice that government has been growing on it faster than anything else. Unlike other private companies, which have a season of growth and which eventually die or fade, Government Inc appears to be immortal.  It has no self-destruct code in its DNA.  While private institutions receive signals from surrounding areas when they get too big, and shrink under environmental pushback, something about government makes it unable to hear those pleas. It just grows and grows and grows. The Martian would also observe that government has acquired the uncanny ability to suck up resources from around it, creating networks of supply to support its burgeoning bulk.

In other words, an observer from Mars, unable to read the New York Times or unpersuaded by it, would conclude that society was afflicted by a malignant cancer. He would notice the absence of apoptosis, hidden signatures which deflect the society’s immune system; he would see angiogenesis. The last thing a Martian would expect was a Recovery Summer. Worse, he would worry about metastasis. The stimulus package has made even more surrounding tissue dependent on government inc. That would be a radically different take on Hope and Change.


Dr. Robert Weinberg at MIT recently made an interesting observation about cancer: it can’t spread without convincing the surrounding cells that it’s there to help.

If one looks carefully at the tumor, one sees, actually, often the majority of the cells in the tumor are not cancer cells, but normal cells recruited from adjacent host tissues from the circulation that represent an aggregate—what is called the tumor stroma. It’s formed from a variety of different connective tissue types, and these various other kind of cells are clearly providing critical biological support to the cancer cells.

We now come to realize that cancer cells within a tumor are really in an ongoing dialogue in the stroma cells, from which they receive essential support. Indeed, as far as we know, they’re continuously eliciting the support from the stroma cells in order to thrive. …

The microenvironment not only fosters the growth of the initial tumor. But these cells that have been brought into the tumor by the carcinoma cells, once they’re present and when they coexist for a while with the cancer cells, now they begin to send signals back to the cancer cells that actually modify the same cells that previously recruited them into the tumor.

The interesting thing about the problem is that the truth will soon emerge from empirical results. The economy will either respond to further therapy from the government or it will sink deeper into disease. Who wants to bet on a Summer of Recovery? Powerline argues that government itself is beginning to realize that when the host dies, it dies. In consequence parts of the Obama administration are actually undermining their own plans for social engineering because they know at a level of denial just how dysfunctional their cures are.


Then on Monday of this week the EPA announced a two-month delay in releasing its long-awaited proposed rules for curtailing greenhouse gas emissions under the Clean Air Act. … Then this morning comes the news of a delay in producing new regulations to implement the Dodd-Frank legislation affecting the financial industry, even though the law mandates that it take effect one month from now. From the sound of the news accounts, the regulators are having difficulty figuring out rules that make any sense or that can be implemented without negative untended effects on financial markets. (It is probably the case that the existing regulatory regime not only contributed to the housing meltdown and financial crisis of 2008, but is holding back the recovery today.)

Quite aside from the political pressure being brought against the Obama Administration for the job-killing effects of overregulation, it is likely that the Obamanauts are running up against the basic problem that regulation shares the same epistemological or cognitive defects of socialist central planning. In other words, at some point the regulatory state cannot be made to work for the same reasons socialism cannot be made to work: the planners/regulators simply cannot assimilate enough information and make correct resource allocation decisions.

In the last stages of cancer even the tumors compete for the last nutrients of the dying host. That was how the Soviet Union collapsed. Things got better each year until everything collapsed.

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