David Rosenberg: The U.S. Is Suffering a Japanese-Style Depression

Japanese unemployedPresciently bearish David Rosenberg, the chief economist and strategist at Gluskin Sheff who called the global meltdown back when he was still at Merrill Lynch, isn't budging from his view that the U.S. is in a depression -- and a prolonged, Japanese-style one at that.

Rosenberg reminded clients on Wednesday that here we are 33 months after the Great Recession began, and yet home prices, gross domestic product, credit outstanding, organic personal income and employment are all lower now than they were prior to the onset of the downturn.

"We can understand that this is not exactly cocktail conversation, but this is a Japanese-style (even worse perhaps) modern-day depression," Rosenberg writes. "It's not the 1930s because soup lines have been replaced with unemployment insurance lines -- over 10 million checks and for up to 99 weeks. The poor souls who endured the bitter 1930s had no such relief."


And as for the U.S.'s vaunted labor flexibility and superior demographics saving it from a Japanese sort of lost decade or two, well, Rosenberg is having none of it.

"Government policy and the record number of people upside-down on their mortgage have seriously impaired the flexibility of the labor market," Rosenberg writes. And the U.S. birth rate has declined for two consecutive years and is at its lowest level in a century, he notes.

Of course, it's no surprise to buy-and-hold investors that U.S. equities have already notched a lost decade and then some. Take a look at this 10-year chart of the S&P 500 ($INX):


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gbelter777

u don't say..

September 07 2010 at 8:49 PM Report abuse rate up rate down Reply
gbelter777

u don't say..

September 07 2010 at 8:49 PM Report abuse rate up rate down Reply
acspares

It's not the lobbiest. They are doing what someone pays them to do. IT'S OUR GOVERNMENT REPRESENTATIVES WHO GET BOUGHT OUT.

September 07 2010 at 5:45 PM Report abuse +3 rate up rate down Reply
Corey

John Todd, said about 30 years ago the economy would be built way up and brought way down on purpose. I am starting to believe what he said is true because many of the things our government does is beyond stupid. Look up John Todd, on youtube. Obama, is part of the plan. Through sources people say Obama, was at the Bilderberg group meetings. MKUltra, is a mind control program our government invested in on our own citizens without permission. They know they have to do so many good things so you can forgive all of the bad things they do. Many people don't like Obama, but will be happy to support Glen Beck and the tea party. If you do your research you will find out they work for the same people. So many things Glen Beck won't tell you of the happenings going on in the world.

September 07 2010 at 3:31 PM Report abuse -1 rate up rate down Reply
1 reply to Corey's comment
Jan

Get Real!

September 07 2010 at 4:23 PM Report abuse rate up rate down Reply
frankfv8

If pumping money into the economy creating jobs and bringing more tax money in from the large corporations is the answer to start to over come this recession/depression THEN the New Plan of this Administration to rebuild the inferstructure of this country could be the very answer we need . tax the OIL companies enough is enough with giving them all these tax benfits allowing them to supress alternative energy proven methods for clean energy, they are to big they need to be cut back to a small size they hold this and so many more countries in the palm of their hand. Follow China 's lead they are years ahead of us. I have an led street light that works on a 9volt batter from China it is amazing . we need to put forth the plan that the White house if offering now for jobs , new inferstructure and tax revenue and it will create more jobs in the new field of energy

September 07 2010 at 12:33 PM Report abuse -8 rate up rate down Reply
1 reply to frankfv8's comment
Jan

Nonsense, Were you sleeping when this administration put for their 800 billion stimulus plan THAT INCLUDED INFACTSRUTURE REBUILDING AND SHOVEL READY PROJECTS!Where the hell are the jobs from that? I just made a road trip from FL to NY and I did see some of those famous stimulus bill at work signs, only problem was I DID NOT see anybody working! What needs to be done is more money put back in our own pockets. Lets see a real stimulus bill, one that GIVES BACK a million to each and every tax paying adult! Tell me you couldn't use a cool mil?

September 07 2010 at 3:27 PM Report abuse +4 rate up rate down Reply
madchemep2

One of the best ways to fix what's wrong with the economy and this country is to bring the lobbying industry to a halt. Pass an ethics bill with teeth in it and some sort of term limits. If only these changes were adopted the results would be stunning. The politicians have to learn that they work for the electorate and not the other way around. Obama,Pelosie and Reid you're on notice. Change is coming in Nov.

September 07 2010 at 11:42 AM Report abuse +14 rate up rate down Reply
1 reply to madchemep2's comment
joyce

Didn't Obama promise to end lobbists in his administration?

September 07 2010 at 3:23 PM Report abuse +9 rate up rate down Reply
willwin2000

Our government has done little towards solving this problem. Keep in mind that our government can really only do 2 things - PUMP MONEY INTO THE ECONOMY & TAX MORE. Unfortunately, they do not have balancing skills when it comes both actions, nor do they realize that restrictions and a lack of significant legislatioon for small businesses hurt everyone. HOW will history view this period as compared to the Great Depression? Worse, since we have all of the abilities to change the economy, but because government is stuck with time ******* political wars between the Repubs and Dems and because our governement is so deep into not telling the truth about the economy.

September 07 2010 at 10:45 AM Report abuse +8 rate up rate down Reply
toutfishin

PS the media i snot helping, look at the huricane they just hit us with in the north east. WE got nothing and they hit us over the head with it day in and day out for over a week. Can't they report on anything positive! Like how to start your own business or how to get a loan in this economy. All they report is the bad and not the good that people do!!! Not the positve things about america.

September 07 2010 at 10:11 AM Report abuse +9 rate up rate down Reply
1 reply to toutfishin's comment
gpat1132

the media is afraid to ask real questions of our goverment they don;t want to lose the interviews its all about ratings not reporting

September 08 2010 at 2:10 PM Report abuse rate up rate down Reply
toutfishin

we lost what 300 billion with one air strick on the twin towers and how many billion on the plane that hit in washington. Not to metion all the lives lost that day! These animals would kill us all if they could so we need to fight them on their own soil befor ethe fight comes here, mor ethat it is now. The problem is were not producing the war equipment that we need to fight or the economy would be much better. We keep sending more dollors out of the country. Our oil adiction is killing our economy and our security. Did we learn nothing from the 1979 odd even gas lines that went for miles. Guess not! Neither did our car makers!!

September 07 2010 at 10:06 AM Report abuse +7 rate up rate down Reply
jcalobserver

You see here is the problem. You people in the media just keep hammering at the same topic. People know they are out of work, that their houses are being foreclosed on, that their life savings have been lost to Wall street theives. Say something positive about what we need to get our selves out of this mess for once.Just once -lead and not follow.

September 07 2010 at 9:38 AM Report abuse +11 rate up rate down Reply