Last Friday’s government report on the economy, detailing Q3 GDP growth of only 2.0 percent, confirmed that the U.S. remains mired in a low growth, high unemployment paradigm. In a viewpoint I wrote for EE Times in February 2009 I predicted as much noting that the government’s economic stimulus package was more likely to make things worse than better and that strong sustainable economic growth requires a powerful technology innovation, like the internal combustion engine or microprocessor, being in its growth stage. I argued since 2000 there has been little real sustainable growth. I focused that short viewpoint on the impact of technology on the future growth potential of the economy. But with poor economic performance now confirmed it is worth spending some time on how government intervention can actually make things worse by among other things fostering economic zombies.
Earlier this week the National Bureau of Economic Research, the official arbiter of the economy, declared that the so-called Great Recession ended in June 2009. Having started in December 2007 and lasting for 18 months, it represented the longest recession since the end of the Great Depression. The NBER found that a mix of economic indicators it tracks began a period of sustained growth starting last June, driving the economy as measured by gross domestic product (GDP) higher. But whether you consider the recession over depends a lot on your definition of a recession.