The New Normal Sucks

Economists are beginning to wonder if this very slow economic recovery isn't permanently altering the landscape.

Economists are beginning to wonder if this very slow economic recovery isn’t permanently altering the landscape.

NYT (“Slump Alters Jobless Map in U.S., With South Hit Hard“):

The once-booming South, which entered the recession with the lowest unemployment rate in the nation, is now struggling with some of the highest rates, recent data from the Bureau of Labor Statistics show.

Several Southern states — including South Carolina, whose 11.1 percent unemployment rate is the fourth highest in the nation — have higher unemployment rates than they did a year ago. Unemployment in the South is now higher than it is in the Northeast and the Midwest, which include Rust Belt states that were struggling even before the recession.


Now, with the concentration of the highest unemployment rates in the South and the West, some economists wonder if it is an anomaly of the uneven recovery or a harbinger of things to come. ”Because the recovery is so painfully slow, people may begin to think of the trends established during the recovery as normal,” said Howard Wial, a fellow at the Brookings Institution’s Metropolitan Policy Program who recently co-wrote an economic analysis of the nation’s 100 largest metropolitan areas. “Will people think of Florida, California, Nevada and Arizona as more or less permanently depressed? Think of the Great Lakes as being a renaissance region? I don’t know. It’s possible.”


The reordering of the nation’s economic fortunes can be seen in the Brookings analysis, which found that many auto-producing metropolitan areas in the Great Lakes states are seeing modest gains in manufacturing that are helping them recover from their deep slump, while Sun Belt and Western states with sharp drops in home values are still suffering. The areas that have been hurt the least since the recession, the study said, rely on government, education or energy production. Places that were less buoyed by the housing bubble were less harmed when it burst.

I live in the DC metro area, which has been among the least hard hit in the country. But government can’t employ everybody; someone has to pay the taxes that enables it to function. And, while education may or may not be the engine that drives the next economy and gets us out of this mess, it’s actually just a subdivision of government. That leaves “energy,” which has been a boom and bust niche for a hundred years or more.

Even the modest recovery in the American auto industry is government-driven–and arguably an illusion. It wouldn’t have happened without massive taxpayer funded bailouts and restructuring of crippling obligations. But there’s no guarantee that they’ll manage the situation any better this time.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Hey Norm says:

    “…But government can’t employ everybody; someone has to pay the taxes that enables it to function…”

    “…That leaves “energy,” which has been a boom and bust niche for a hundred years or more…”

    Yet Perry’s Texas is driven by public sector employment and energy production and it’s a MIRACLE!!! and a model for the rest of the Nation.
    At any rate – let’s review:
    Government is clearly one place to look to carry us through a tough recovery…so the Teavangelicals are pushing us to slash Government.
    The Auto Industry Bailout clearly helped the Auto Industry weather the storm…but we never should have done that…and none of the Teavangelicals running for President would have done it.
    Energy production (which is massively subsidized by the Government) is boom and bust…but the Teavangelicals are clear that Government absolutely should not subsidize alternative forms of energy that would flatten the curve of that boom/bust cycle…in other words be more sustainable.

    I guess we are just f’ed.

    Oh wait…we could just stop listening to the Teavangelicals ideas because they are intentionally holding back the recovery. Wow…it’s so clear when you take of the ideology goggles.

  2. James Joyner says:

    @Hey Norm: I still think we’d have been better off letting the auto companies break up and reconstitute during the normal bankruptcy process. But, no, now’s not the time to slash the government workforce.

  3. Hey Norm says:

    I’m no big supporter of the GM or Chrysler of the last couple decades…and I say that as a rabid car guy. (I currently own a Dodge Pick-up…my other 3 vehicles are European)
    Having said that…letting them break-up and take down all the associated businesses during the worst contraction since the depression (which was actually nearly twice as bad as estimated at the time) and in the midst of a major banking upheavel…well, with all due respect James…is just a stupid idea.
    If we somehow manage a fairly reasonable recovery in the face of Tea Party Totalitarianism and we find that the Auto Companies have f’up again…I’m with you 100%.

  4. JohnMcC says:

    I forget where I saw this — some much-more-leftwing bloggy place — but if the ‘new normal’ leaves the employment/prosperity/poverty geography as they presently are the result will be a serious challenge to the right-to-work, low-wage, low-tax, low-benefit Southern economic doctrines. It would be a piece with the push-back of unions in Wisconsin and Ohio. As someone said, ‘don’t need to be a weatherman to know which way the wind blows’.

  5. john personna says:

    Economists are beginning to wonder if this very slow economic recovery isn’t permanently altering the landscape.

    Speaking of economists, there was an amusing headline recently:

    REPORT: Economists Shut Out Of Debt-Ceiling Debate

    FWIW, I think that economists have been worrying about the way globalization meets an aging demographic for some time now. Of course, those economists didn’t always get the air-time.

  6. Ben Wolf says:

    Most southern states have government policies designed to devalue labor. Is it really a surprise unemployment is more of a problem?