This is a picture of André René Roussimoff, also known as André The Giant.
Photo: EKavet, Flickr
André The Giant was pretty huge. According to this bio, he was 7’4″ and 500 pounds.
Unfortunately, he was not healthy. He died young at the age of 46 of congestive heart failure. He was in pain for much of his later life. His massive size was the result of a hormonal problem.
In the words of people these days, André The Giant might be described as structurally flawed.
Now this is Shaq.
Shaq is also a giant, with a height of 7″1′, and weighing over 320 pounds.
But for a big man, Shaq could really move, and fans marveled at how fast he could be, even late in his career.
Shaq was a perfectly formed, perfectly in proportion basketball player that just happened to be really, really big, even by basketball standards.
Shaq is also a great metaphor for the recession and the recovery, because in early 2012 it’s becoming obvious: There was nothing too special about this recession: It was just really, really, big. Shape-wise, it’s not Andre The Giant, who was a vision of lumbering awkwardness. Shape-wise it’s Shaq, really big, but overall properly formed.
For example, take this chart from Ed Yardeni, looking at the pattern of initial claims in this recession/recovery compared to other ones.
The red line is the trajectory of initial claims now. See anything weird about it?
Photo: Ed Yardeni
Here’s another one: A look back at industrial production going back to 1970.
This current recovery looks absolutely no different than past ones, except that the drop was just really, really, big. Other than the size of the whole that needs digging out of, this appears to be properly proportioned, predictable, steady recovery.
Here’s another cool chart from Invictus at The Big Picture:
Photo: The Big Picture
It shows the relationship between the unemployment rate (blue line) with the percentage of businesses in the NFIB small business survey who say that ‘poor sales’ is their #1 worry.
There are two takeaways. One is that there’s a close linkage between worries about poor sales and the unemployment rate, and that as the poor sales problem goes away, so will the jobs problem. But the deeper takeaway, again, is that there’s nothing special about this recovery that’s changed the relationship.
In other words, if our problems were structural — due to say a major a talent shortage, or skills mismatch — then you would expect to see some kind of disconnect this time between poor sales because companies that were selling more, would not be able to find the right workers they need. But alas, this isn’t a problem.
People always point to the fact that there’s a huge, unprecedented pool of people who are “long-term unemployed” and that this somehow indicates the emergence of a new unemployable class of people.
But it doesn’t end up being true. As Mike Konczal points out in this post, the long-term unemployed don’t have a disproportionately hard time finding a job relative to the short-term unemployed, at least as compared to pre-recession times. It’s just really bad for everyone.
Here in early 2012, we’re seeing more and more signs of normalcy.
Despite the popular notion that we’re just drowning in vacant homes, housing starts are coming back to life.
Car sales are of course doing well.
People are slowly putting stuff on their credit cards again.
And so on.
Bottom line: It’s more evident than ever that the recession wasn’t about some gigantic change in the US economy that would only be addressed structurally. It was just really, really big. But like Shaq, all properly proportioned.
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