Saturday, March 1, 2008

Econ 101

It's pretty simple, actually.

So thoroughly is the economy decoupled from ordinary experience that according to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical definition of a recession, which specifies at least two consecutive quarters of negative growth. But most of the public employs the more colloquial definition of a recession, which is hard times. And... most Americans have been living in their own personal recession for years.

In the months ahead, we can expect the hard times to spread... This is what a stimulus package needs to address: the persistent and growing struggles of the middle class and the working class, which is increasingly conterminous with the working poor.

There are reasons for doing so other than compassion. The chronically poor and the battered middle class have become a tripwire in the American economy — generating defaults on debts, depressed consumption and global market turmoil.