Where is the “jobs engine” of the much anticipated economic recovery?

The charts illustrate several interesting phenomena - no two recessions are alike. Thus, the government policies that need to be taken to bring an end to the current one will need to be different in kind and quantity than the steps taken in the past. This recession, brought about by a financial panic, rather than a typical downturn in the business cycle, is deeper and stronger than the previous, recent recessions. Due to the excess leverage that permeated the economy during the expansion period from 2002 through 2007, there is little room for a consumer-lead recovery from the current recession. This means that the recovery will take longer.

Coupled with the de-leveraging occurring in the financial sector and in the consumer sector, the US economy could very well be on the verge of a secondary, deflationary collapse even more severe than the deflation that continues to grip the economy of Japan. The concern that such a "double-dip" recession could occur is further exacerbated by the policy decisions that are being made in Washington. These policy decisions include raising taxes on earned income and investment income, increasing deficit spending that is untargeted and unproductive, and devaluing the dollar to increase beggar-thy-neighbor trade practices.

So where is the "jobs engine" of the much anticipated economic recovery? Until recently, there was hope that there would be a V-shaped recovery as steep as the decline that began in December 2007. This was a reliance on the normal business cycle creating the jobs that would lead to a full recovery. However, the policy decisions coming from the White House and Congress have created the deflationary and anti-growth head-winds that will make job growth and recovery a long and arduous affair.