Published on
The Guardian/UK

Recovery for Wall Street and Wealthy, Austerity for Workers and Poor

The plain fact is that corporate profits are the only area of the US economy to recover since 2009. Any other claim is a lie

The so-called economic "recovery" since mid-2009 was chiefly hype, a veneer of good news to disguise and minimise the awful underlying economic realities. The few (large corporations and the rich) who bear much of the responsibility for the crisis made sure that the government they finance used massive amounts of public money to support a recovery for them. The mass of the population was excluded from the government-financed recovery for the few. We now have the summary official statistics to expose this grotesque injustice.

In economics, as in other fields, pictures and graphs are sometimes worth more than a thousand words. So it is with a summary graph prepared recently by a group of economists at Northeastern University in Boston. Their short report (pdf) exposes the basic lie in claims by politicians, media spokespersons, business leaders and others that the US economy has been in an economic "recovery" since early 2009.

What did recover in the US, partly or wholly, were only corporate profits (especially those of banks) and the stock markets. The report's chart 14 shows three vertical bars indicating the size of profit and stock recoveries from the second quarter of 2009 through the first quarter of 2011.

Chart 14 on US economic recovery report from Northeastern University
Chart 14, from The 'Jobless and Wageless' Recovery from the Great Recession of 2007-2009 (pdf). Source: Center for Labor Market Studies, Northeastern University, Boston, Massachusetts; May 2011

What did not recover by the first quarter of 2011 – and has not recovered to this day – is shown by the five remaining bars in the chart. Those tiny bars show what happened to payrolls and to employment. From the depths of the crisis in early 2009 until now, there has been absolutely no recovery whatsoever in wages or jobs for US workers.

The crisis of the capitalist system in the US that began in 2007 plunged millions into acute economic pain and suffering. The "recovery" that began in early 2009 benefited only the minority that was most responsible for the crisis: banks, large corporations and the rich who own the bulk of stocks. That so-called recovery never "trickled down" to the US majority: working people dependent on jobs and wages.

The countless claims of "recovery" as if it were a general economic event spread across the entire US economy were, and are, lies. They hide the tragic truth of ongoing economic crisis for the many.

Richard Wolff

Richard Wolff

Richard D. Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, where he taught economics from 1973 to 2008. He is currently a visiting professor in the graduate program in international affairs of the New School University, New York City. Richard also teaches classes regularly at the Brecht Forum in Manhattan. His books include: Capitalism's Crisis Deepens: Essays on the Global Economic Meltdown(2016); Democracy at Work: A Cure for Capitalism (2012); Occupy the Economy: Challenging Capitalism(2012); Contending Economic Theories: Neoclassical, Keynesian, and Marxian (2012); and Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It (2009). A full archive of Richard's work, including videos and podcasts, can be found on his site. Follow him on Twitter: @profwolff

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