Great Graphic: Still Feels Like Recession

This Great Graphic comes from Pew Research Center in a post by Rakesh Kochhar.  It raises an issue that seems to have been lost as policy makers and investors focus on the financial part, the circulation of capital, of the crisis.  It is an issue that we have argued and see at the crux of the matter:  Where will aggregate demand come from while households and governments de-leverage?

One way, we have argued, that this recovery has differed from past recoveries is that the government sector is not creating jobs now.  This chart shows another way this time is different.

There has been no recovery or even slowing of the pace at which median household income is falling since the economy stopped contracting.   Simply put, in terms of the median family household income, the painful contraction continues unabated.   This is as much a political (power) question as it is economic and financial.  

Economists can debate whether expanding the Fed's balance sheet lowers interest rates or excites the stock market, or stokes gold and hard assets.  Yet, here is probably not much of a disagreement about its impact on household income.  Nil.  

It makes me recall why Studs Terkel called his oral history of the Great Depression "Hard Times".  It was only a Great Depression for those who had.  For most people, it was just a continuation and intensification of what they were experiencing before; hard times.