This is something of an aside from my economics multi-part essay. I found a graph I’ve been looking for in the context of the discussion about employment as a design goal for an economy.
Now as context, note that the US historically returns to baseline after a recession
So the expectation in Serious Circles is an eventual return to the “normalcy” expectations set in the 20th century. (Note that the recovery to baseline is not universal
in other countries.
As I understand it, normalcy in the job market lags normalcy in GDP growth. The following graph is the one I mentioned in a recent comment. It should clarify that the drop in GDP over the Bush recession was so sharp and severe, that even a “normal” recovery will take a long time. Obama deserves none of the blame for the slow recovery in employment, even in conventional economic terms.
Since the graph was plotted, the US GDP has flattened out a bit as I understand it (and the UK is in an unambiguous double dip.) So things look even worse.
The point here is that, even if the limits to growth scenario hasn’t really arrived yet, nobody should be holding their breath about a return of the missing jobs. The growth rate required to get back to baseline in a few years is extraordinarily high, because the Bush screw-up was so spectacularly deep. That is, we require a sustained period of substantially above average growth to get back to “normal” which would amount to rehiring most of the laid off folks.
Given that any short-run return to growth will run into the crunch of inelastic petroleum demand meeting inelastic petroleum supply, this isn’t in the cards on a time scale short compared to the replacement time of transportation infrastructure.
So, let’s face it. Obama will not get things back to “normal” this term and he or his successor will be very lucky to manage it in the following term. There’s enough “peak oil” phenomenology in the mix to clinch this. I suspect few countries, unless they are oil-rich, will sustain GDP growth in the near future. (Canada’s horrifying defection from climate governance shows that at least one government sees the writing on the wall, albeit cynically and maliciously.)
It’s my belief that this kick may well turn out large enough to be seen by history as the inflection point in the overall growth curve. In the long run this may not be a bad thing, but much depends on whether the societies living through it can see it in perspective.