Figures Hide the American Tragedy

-“Nothing to be done.”

-“I’m beginning to come round to that opinion.”

The opening lines of Vladimir and Estragon, the two anti-heroes of Waiting for Godot, illustrate perfectly the American economic situation. The central bank, President Obama and the entire country should have been cheering this week when government experts finally declared the official end of the 2007-2009 recession.

On Monday, the Business Cycle Dating Committee (a name that Beckett and Kafka would be proud of…) decided that the period of economic downturn that began in 2007 officially ended in June of last year. This means that the world’s largest economy is in recovery after more than a year — a fact that a president desperately seeking votes for the midterm elections and a Federal Reserve willing to answer his critics would not be likely to overlook.

But instead of fireworks, cheerleaders and Madonna singing the national anthem live on CNN, Washington responded to an announcement that signaled the end of a dark period with an eerie silence. The reason is simple: There is no recovery in America, or if there is, it can’t be seen. Neither the government nor the Fed can do much to stimulate it. Is that analysis too pessimistic? Like the usual journalist who falls in love with bad news because it makes more headlines? Let’s look at the facts. According to official estimates, the recession we just witnessed was the longest since the Great Depression of the 1930s.

During 18 months of hell, more than seven million people were fired, while the GDP dropped by four percent (four times more than in the recession of the ’90s, for example). Unemployment, the collapse in housing prices and the lack of a decent welfare state have caused the net economic resources of the average American to drop by more than 20 percent. To get an idea of the psychological effects of such a destruction of wealth, take your bank account, divide it by five and subtract that amount from the total. Now think about your future and that of your loved ones: Fear? Paranoia? Despair? These are all feelings that have gripped millions of Americans during the last year and a half.

Obama talks of hope; Ben Bernanke, the Fed chief, promises new stimuli; and banks continue to say that there is money for loans. Nevertheless, the reality is that for ordinary people, the Great Depression of 2007-2009 was a huge and unexpected tragedy. The economic data does not even tell it all. The latest U.S. census showed that four million people fell below the poverty line in 2009, bringing the total to 44 million.

In a country where everyone wants an iPad, restaurants serve huge portions and government spends hundreds of billions in faraway wars, one out of every seven people lives on less than $10,830 dollars a year — the minimum income for being considered poor. For children, the figures are even more serious: One in five lives in conditions of poverty.

In this fat (rich), arrogant and powerful America, every baby has a chip to play in the roulette of life, where there is a 20 percent probability of losing everything. Given this situation, it is no coincidence that the White House and the Fed have not written triumphant press releases to celebrate the end of the recession. As one elderly woman said to Obama during a meeting between the president and the common people, “Quite frankly, I’m exhausted. I’m exhausted from defending you, defending your administration, defending the mantle of change that I voted for. I am very disappointed with the situation.” Disappointment and exhaustion — two conditions that are not suited to the America of the rampant boom years, the America of optimism and immigrants, of Hollywood lights and gelled Wall Street bankers.

The Great Recession has driven this country into the abyss and it will not be easy to get back on top. Even history does not seem to be on the side of a swift recovery. In the past, economic collapses were followed by periods of high growth as a result of a near-natural rebound in activities of firms and consumers. This yo-yo effect — withdrawal followed by greed — did not occur this time, partly because the recession has been longer and more severe. My friend Neal Soss, an economic analysis veteran who now works for Credit Suisse, explains this anomaly with a play on words: “We have avoided the Great Depression, but we have a depressing recovery.”

To explain the situation, psychologists are needed, not economists. Production activities are in atrophy even when there is money because the country is traumatized by the recession. American companies keep about $1.8 trillion in their safes — a record — but are afraid of investing in infrastructure or the acquisition of other companies. Consumers, even wealthy ones, are imitating the ant-like Japanese, saving every penny instead of spending. If the problem is really psychological, the gentlemen of Washington can do little, especially when interest rates are already very low, the government spent $780 billion to stimulate the economy without great success, and the November elections will paralyze legislative work for months.

The U.S. economy probably will avoid the dreaded “double dip” — a relapse into recession — but it will take time before it returns to sail with the wind. Ironically, the same day the U.S. government announced the end of the recession, the Organization for Economic Co-operation and Development predicted that the U.S. unemployment rate will remain high until 2013. Employment is the main beam of recovery: Without jobs, consumers do not consume and companies can not produce much.

If the OECD is right, it will take at least two years before the American economy is freed from the legacy of the recession. Politicians and bankers would do well to remind us that it could have been worse. Without massive government intervention in areas such as the financial and auto industries, Americans would be living in a replica of the Depression. The economic downturn of 2010 is certainly lighter than the crisis in 1930.

However, the stagnation of a country that usually dominates and pulls the rest of the world is not a positive condition, especially for its 44 million poor people. Estragon and Vladimir know all too well: Waiting for someone or something, not knowing if and when it will arrive, hurts the spirit.