Recession

A recent Gallup Poll captured the social zeitgeist of an America attempting to emerge from the 2008 Great Recession. The nationally representative survey showed that feelings of psychological distress such as worry, anger, and depression increased with the duration of joblessness. Less than 40 percent of those who had been searching for a job for at least 11 weeks rated their lives as ‘thriving’, while most unemployed Americans expected that they would have to settle for a job that they did not want.

The evolution of certain aspects of the American social contract has lagged behind that of other developed countries for decades, but the insecurity resulting from our lack of social protections has traditionally been offset by high employment levels, a stable middle class and widespread perceived opportunity for upward mobility. The value of this trade-off has been undermined, though, by unequal wage growth and polarization of the labor market into low and high skill jobs, with a decline of middle income jobs and the retirement and health benefits that accompanied them.

Amidst the doom and gloom surrounding the labor market, there are bright spots that offer some hope for the return of good jobs in the United States. Foremost among them is the resurgence of employment in durable goods manufacturing.

Things are not working. Two years after the National Bureau of Economic Research (NBER) declared the recovery underway, it is clear that things are not working, at least not in the sense that most Americans expect. The U.S. economy is like an aging sports car running on three cylinders, fouled spark plugs and a flat tire.

Or, such is the distillation of the comments made yesterday at the event "Rebuilding the Road to Financial Stability" (co-sponsored by the Congressional Savings and Ownership Caucus and the Center for Financial Security at the University of Wisconsin-Madison) made by Federal Reserve Governor Sarah Bloom Raskin.

-- This is a guest post by Jay Pelosky, Principal, J2Z Advisory, LLC --

GLOBAL BACKDROP

Michele Wucker, president of the World Policy Institute and co-sponsor of the World Economic Roundtable, guest hosted Worldwide Exchange this morning and spoke about her recent paper advocating for a voluntary debt restructuring in Europe.

The Asset Building Program and Economic Growth Program at New America is hosting a unique, two-day, two-city event focused on the future of the Federal Reserve. We are delighted to be co-sponsoring the event with the Roosevelt Institute. The first event took place in New York City and focused on the past, present and future of the Fed as a banking and job creation institution.

"The more well-to-do a nation, the greater the chances that it will sustain democracy," wrote American political sociologist Seymour Martin Lipset in 1959, crystallizing the idea, now a received wisdom, that wealth is the inevitable handmaiden of political freedom.

-- This is a guest post by Jay Pelosky, Principal, J2Z Advisory, LLC --  When one considers Q1 2011 results: broad commodities up 12%, led by oil up 24%, S&P stocks up 6% in its best Q1 since 1998, USD down 4%, one asset class stands out and that is bonds - bonds were roughly flat across both the corporate and government space in Q1, even in the face of sharply rising commodity prices and inflation fears.