Back in September, I wrote about an argument I was having with a colleague over GDP growth forecasting for 2013. My colleague said that GDP growth would be 2.6% (with the Fed projecting 2.8%). I said we would hit around 1.8%.
My colleague was an Economist, and I am a Sociologist. I was accused of being “just a Sociologist.”
Well, the Commerce Department just reported that the real GDP growth for the entirety of 2013 was – ahem – 1.9%.
I also said that I did not see GDP growth, equal to that of 4-5% from other recession recoveries without positive changes to the labor market; mainly employment participation rates. Yes, unemployment is at 7%, but only because 9.6 Million people (and counting) are no longer being counted because they’ve been jobless for so long.
9.6 Million people is about the population of the Metro Chicago area. Imagine everyone in Chicago-land not having a job, and then being told: “You don’t count, your joblessness is all in your imagination.”
Of course, the latest excuse from my colleagues in the Economics department is that austerity and taxes are to blame. Sure, that can hold SOME water. But that’s how you get to full employment, and thus create aggregate demand – by spending on jobs while eating some tax cuts.
So while I’m just a Sociologist, accusing my colleagues of just being Economists is something that’s bitter-sweet; because millions upon millions of unemployed people are just suffering for no good reason. 1.9% GDP growth is a pittance of what it should have been.
Oh yeah, and according to the President’s State of the Union address, the Economy is doing just fine. I wonder how the 42% of working age adults that don’t have jobs (some 57 Million people – almost the entire population of Great Britain) feel about our strong 1.9% economy.