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‘False Recovery’ vs. ‘Decline of Failure’: The Great Economic Debate

Justin Maiman
Daily Ticker
‘False Recovery’ vs. ‘Decline of Failure’: The Great Economic Debate

Almost all economists agree that the long winding road to recovery for the U.S. economy is underway. But “don’t be fooled by the false recovery,” says Heidi Moore, U.S. finance and economics editor of the Guardian.

While some things are improving, Moore says the underlying data -- especially regarding unemployment -- is disappointing on many levels. “If you dig in to the numbers, we’re not so well off. And that’s a problem for politics,” she notes.

Speaking for the defense (of the recovery) is Dan Gross, global business editor of The Daily Beast/Newsweek.

“The single most important thing… is what I call the decline of failure,” says Gross. “You look at every metric in ‘08/’09, everybody was failing.”

But if you look at the trends today -- in the banking sector, and the pace of bankruptcies, foreclosures and credit card delinquencies, etc. – we are making real “progress,” Gross insists.

So the current debate boils down to the question: Is the 'Great Recession' in the rearview mirror…or are we still in it?

Moore and Gross, two longtime economy watchers (and financial reporters) lay out their arguments in the accompanying video, with The Daily Ticker’s Aaron Task officiating.

Related: Housing Recovery Is a Sham Says the Guardian’s Heidi Moore

Meanwhile, market heavyweights seem to be on the fence about the force of the economic recovery. Billionaire investor Warren Buffett told CNBC “the economy is moving forward, but at a slow pace.” PIMCO CEO and co-CIO Mohamed El-Erian puts it this way in a Forbes column: “The U.S. economy continues to heal, but economic escape velocity remains elusive."

Related: Fed-Assisted Growth Stuck at 2% "New Normal" Rates Through 2013

Note the way both Buffett and El-Erian hedge their praise with the use of “but.” So the debate rages on, with Monday’s weak ISM report contributing to the skeptics’ side and Friday’s jobs number certain to add fuel to one of these fires.