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Economists discussing the sluggish state of the economy at a media breakfast held by the New York State Society of Certified Public Accountants this week, offered up a variety of explanations for the lasting economic malaise, ranging from the housing crisis fallout to structural unemployment.

It's the Economy, Stupid

The Great Recession hasn't led to the "V-shaped" recovery -- marked by a deep recession then a sharp recovery -- that's characterized prior recessions, said Joseph Tracy, executive vice president and special adviser to the president for the Federal Reserve Bank of New York, during his presentation.

More than two years after the recession was declared officially over, "We still haven't experienced this sharp, economic growth." Much of that can be pinned on what Tracy called a major shock to the economy. "The rise and fall in housing prices wiped out $6.5 trillion in housing growth," he said.

The bust has left a lingering mess in its wake, sending households' net worth down to 1980s levels, generating $700 billion in negative equity as 25% of homeowners owe more to lenders than their homes are worth, and triggering a rash of foreclosures, Tracy said.

The after effects of the housing downturn -- compounded by job losses -- will remain a headwind the nation will continue to reckon with for about five to seven years, Tracy said.

Not All Doom and Gloom

The economists also noted key indices like higher industrial production and a rise in personal consumption, which suggest that a meaningful improvement in the country's financial fitness could unfold.

Leading indicators also suggest "an economic growth pattern has been restored," said Steven Cunningham, director of research and education for the American Institute of Economic Research, conceding the idea might sound Pollyanna to some.

The Chicago Feds National Activity Index, a monthly index designed to gauge overall economic activity and related inflationary pressure, was down merely 0.43 in August, Cunningham said.

An index of "0" means "the economy has come back to a trend growth rate, another cause for optimism.

"Business is trying to come back, production is increasing," Cunningham said.

Growth in industrial production of consumer goods, such as home electronics, for example, is another positive sign, he said.

The Unemployment Conundrum

Despite some upbeat statistics, the stubbornly high 9.1% unemployment rate can make talk of the nation's economic recovery seem hollow.

Cunningham cited structural unemployment, the disconnect between labor market needs and the skill set of the workforce, as one part of the problem.

The country is short on job candidates qualified to fill traditionally white collar positions, like engineering, which are on an upswing, while jobs that require less education, such as construction, are waning, he argued.

Throughout the economic downturn, higher education levels have corresponded with lower unemployment rates.

For one, the unemployment rate of Americans with a bachelors degree is 5.4%, nearly half that of people with only a high school diploma, he said, citing figures from the Bureau of Labor Statistics.

"It makes sense. We're in an information economy, not a mass production economy."

Joblessness is yet another symptom of the housing crisis, Tracy said.

Prior to the downturn, Americans were tapping into the equity in their homes. That capital has been cut off, which has "handicapped would-be entrepreneurialism to self-fund businesses," and has stifled the formation of new businesses.

Fixing the housing crisis was an after thought in the Obama administration's recessionary policy intervention plan to stimulate economic and labor market growth, "which was a mistake," Tracy said.

Still, to a large extent, the government's hands are tied, said Stanley Goldstein, CPA, founder of the New York Hedge Fund Roundtable and Goldstein Golub Kessler & Company.

"The government can't do as much as we or they think, irrespective of who's in the White House," Goldstein said. '"It takes a 3.5% [economic] growth rate to really create jobs."

For one, "Big companies don't create jobs, they cut jobs. Smaller companies create jobs, but it's very hard to stimulate that now," as small businesses have been hesitant to hire in this economic climate, he said. "The natural drivers of the economy are not moving right now."

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