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MARCUS: The recovery is over ... or maybe not

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Morton Marcus

“I don’t believe you,” Lina Lassie said as we stood at the grocery checkout.

“It’s true, nonetheless,” I replied, hoisting my six-pack to the conveyor belt. “By several measures, not only is the recession over, but the recovery as well is complete. We are on to the expansionary part of the business cycle.

“At the close of 2010, Indiana’s personal income stood 2.02 percent above its level in the second quarter of ’08, the peak before the recession started. Every state except Nevada has exceeded the level it enjoyed in that quarter. We rank 32nd, behind West Virginia, which is at 7.3 percent above its 2008 second-quarter figure.”

“Do you make an effort to recall percentage points to the second decimal?” she asked.

“No,” I answered truthfully. “Some just stick with me. What fascinated me was that the recession in personal income (that’s wage and salaries, plus the cash value of benefits, self-employment income, unemployment compensation, Social Security, Medicare, Medicaid, plus dividends, interest and rent) … ”

“And what fascinated you was … ?” Lina prodded.

“What fascinated me was that the recession in Indiana and the nation lasted only three quarters. But the Hoosier recovery took six quarters, while the nation as a whole required only five quarters. Also the recession in earnings (what people make from working for themselves or for others) started a quarter before the recession in personal income.”

“You’re joking,” she exclaimed. “You find that fascinating? What kind of a boring life do you lead?”

Polite as ever, I pondered her remark before objecting. “The recession and recovery were not boring. They adversely affected millions of families. If we had read the data from the Bureau of Economic Analysis properly, we might have seen the problems sooner and taken measures to minimize the negative effects.

“In the second quarter of ’07, earnings of Hoosiers working in real estate began to fall. That was a full year before the total personal income for the state began to descend. By the close of 2010, those earnings were still 7.4-percent below their peak.  

“Next, earnings in retail and wholesale trade peaked and started their decline. With fewer goods to move around, transportation earnings started their descent. Because the real estate decline signaled less demand for new and existing homes, a general falloff in construction and manufacturing followed. The retail decline stopped construction of new shopping centers and backed up inventories, which made additional manufacturing unprofitable. And the dominoes fell.

“It took another half-year before dividends, interest and rental income peaked out. Hoosiers fortunate enough to have such assets fared better than those dependent on wages and salaries. After five quarters of decline, wages and salaries rallied in the third quarter of ’09, but at the end of last year were still 2 percent off our all-time peak.

“The worst problems remain in construction (still off 15 percent) and manufacturing (remaining down 6 percent) … ”

“Enough,” Lina snarled as her order was tallied. “I get the point: The data tell the story. But it’s the story and its telling that are interesting, not the dull recitation of the data.”

“If you require a ‘Bourne’ movie to get excited by the data, you, not the data, are at fault. If you cannot see and feel the human element in the numbers, it is your deficiency,” I responded with steely calm as my simple purchase was rung up.

It was, however, too late. Lina had stormed off with her packages and my beer.• 

__________

Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.
 

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  1. I think the poster was being sarcastic and only posting or making fun of what is usually posted on here about anything being built in BR or d'town for that matter.

  2. Great news IRL fans: TURBO the IMS sanctioned movie about slugs running the Indy 500 has caught the Securities and Exchange Commission because Dreamworks had to take a $132MILLION write down...because the movie was such a flop. See, the Indy/IMS magic soiled another pair of drawers. Bwahahahahahaha! How's CARTOWN doing? HAHAHAHA...Indy is for losers.

  3. So disappointed in WIBC. This is the last straw to lose a good local morning program. I used to be able to rely on WIBC to give me good local information, news, weather and traffic on my 45 minute commute.Two incidents when I needed local, accurate information regarding severe weather were the first signs I could not now rely on WIBC. I work weekend 12 hour nights for a downtown hospital. This past winter when we had the worst snowfall in my 50 years of life, I came home on a Sunday morning, went to sleep (because I was to go back in Sunday night for another 12 hour shift), and woke up around 1 p.m. to a house with no electricity. I keep an old battery powered radio around and turned on WIBC to see what was going on with the winter storm and the roads and the power outage. Sigh. Only policital stuff. Not even a break in to update on the winter storm warning. The second weather incident occurred when I was driving home during a severe thunderstorm a few months ago. I had already gotten a call from my husband that a tornado warning was just southwest of where I had been. I turned to WIBC to find out what direction the storm was headed so I could figure out a route home, only to find Rush on the air, and again, no breaking away from this stupidity to give me information. Thank God for my phone, which gave me the warning that I was driving in an area where a tornado was seen. Thanks for nothing WIBC. Good luck to you, Steve! We need more of you and not the politics of hatred that WIBC wants to shove at us. Good thing I have Satellite radio.

  4. I read the retail roundup article and tried Burritos and Beers tonight. I'm glad I did, for the food was great. Fresh authentic Mexican food. Great seasoning on the carne asada. A must try!!! Thanks for sharing.

  5. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

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