No Recession

This is what the news looks like when you don't have overly clever Ivy Leaguers spinning the mainstream media. Is there an American media outlet that has dared to suggest that the US is enduring an economic depression? America Slides Deeper Into Depression As Wall Street Revels

The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.

Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.

The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.

Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.

Personally, I've found the phrase Little Depression to be a better descriptor of the last couple years than the ubiquitous "Great Recession." Our current troubles crystallized around a good old fashioned financial panic, the likes of which hadn't been seen on a national scale in generations. Millions of Americans are enduring mass dislocations, not because they lost their jobs, but because they lost their homes. States like California and Michigan are literally in danger of failing, whatever that means (I don't think SF is in danger of a Black Hawk Down situation any time soon), with others teetering closer to the edge.

And, even though we are apparently heading into a weak recovery, there is still a pessimistic cloud in the air, as if we can't quite believe things are back to normal. Not only that, there is an increasing sense of dislocation between the voters and the political class that looks to get worse - for incumbents - before it gets better. No, this is not some ordinary recession where we are simply reducing inventories, relocating factories, and reducing capacity. This is much more disruptive, with the disruptions pointing to an uncertain future.