Washington Post: Long economic recovery ahead

From the Department of Duh, here’s a pretty cogent piece in the The Washington Post about our current sluggish economy: Recovery could be one of the longest, most difficult in history, economists say.

I’ve been writing and talking about this forever — at least it seems like it. With no need for new housing construction, with the massive GDP declines in 2008, with the huge increase in individual and government debt from 2000 to the recession’s beginning in late 2007, with banks large and small teetering on the verge of collapse, there was never a plausible argument to be made for anything other than a slow, choppy recovery. But exactly how slow? Exactly how choppy?

From The Washington Post piece today, which begins by pointing out the simple reality that politicians have no easy fixes for problems so dire and so complex:

In the rhetoric of the presidential campaign, the long-running economic woes of the United States can be cured with simple, quick remedies. [. . .]

But for a coterie of economists who have studied decades of downturns, the recovery from the most recent U.S. recession is likely to be one of the most difficult and protracted in history simply because of the recession’s unusual nature.

Indeed, if it follows the patterns of other similar crises, the recovery of the U.S. economy could take years, according to influential studies by economists Ken Rogoff and Carmen and Vincent Reinhart.

Their research, which is well known at both the White House and the Federal Reserve, likens the economic situation in the U.S. today to past crises around the world and finds, for example, that in those countries unemployment rates and housing prices did not return to pre-recession levels for a decade or more after the crisis.

As the piece notes, we’re accustomed in the U.S. to recoveries that are faster and sharper than the declines into recession. That’s just not going to happen this time, no matter what policies are implemented.