A22 Economy & Business S
o it’s officially over. Technically, the recession that began in December
2007 ended in June 2009, according to the National Bureau of Economic Research (NBER). It was the longest of any downturn sinceWorldWar II.
We need another yardstick to
measure how bad off we are, because the one we have now isn’t good enough. The recession may be declared over, but the hole we’ve dug is too deep to be measured only by the macroeconomic factors considered by the bureau. Hard times are far fromover
for themillions of people still out of work, and those who have found jobs but atmuch lower wages, and those who can only find part-time employment. The slump is not over for
those who thought they could retire in the next few years. Now they find that their investments have dropped somuch that they have to work longer or live on less in retirement. It’s definitely not over for the
millions of people now living below the poverty line. The poverty rate in 2009 was the highest since 1994. There were 43.6million people in poverty
last year, up from39.8million in 2008, the Census Bureau reported recently. Last year, one in seven Americans lived in poverty. For a family of four, the poverty level was an annual household income of $22,050. It’s not over for themillions
still without health insurance. The number of people lacking coverage rose from46.3million in 2008 to 50.7million in 2009. It’s not over. “Even though economistsmay
say that the recession officially ended last year, obviously for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, it’s still very real for them,” President Obama said during a town hallmeeting inWashington this week. The NBER defines a recession
EZ RE
KLMNO For many of us, the recession lives on
have stopped looking for work, Leigh said, pointing out that unemployment among African Americans has been notably high for years. The new prosperity gauge
MICHELLE SINGLETARY The Color of Money
as a period of falling economic activity involving a number of indicators. Themeasured activity includes real income (wages of an individual or group adjusted for the effect of inflation on purchasing power), employment, industrial production, wholesale retail sales and real gross domestic product, which is an inflation- adjustedmeasure that reflects the value of all goods and services produced by an economy. “The challenge . . . is that the
hole was so deep that a lot of people out there are still hurting,” Obama said. “And so the question then becomes what can we now put in place tomake sure that the trend lines continue in a positive direction, as opposed to going back in the negative direction.”
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The question should also be:
Are we accurately portraying the health of the economy and how individuals and families feel about their personal finances? I put that very question to
Wilhelmina A. Leigh, an economist and senior research associate for the Joint Center for Political and Economic Studies. Like somany others, when
Leigh heard the news that the recession ended last year, she scoffed. “I think perhaps what is
needed is to be very cynical about the whole notion of when a recession starts and when it ends,” Leigh said. It would be useful to look not
just at themacroeconomic indicators but also at how people are being affected personally, Leigh added. An accuratemeasure of economic prosperity should factor in the poverty levels. It should consider not just the official unemployment figures but also themany people not counted in Labor Department data. The official unemployment figures don’t include the underemployed and those who
should include those who aren’t earning a living wage. Someone who works a 40-hour-a-week job and earns a living wage would be able to afford housing, food, health care, child care, transportation and other necessities of life in a given area, Leigh said. Sadly that’s not the economic reality for a lot of people. “We have some chronic
economic challenges in our country,” Leigh said. We need amore sensitive
point of reference to capture the fact that far toomany people have been strugglingmightily, some even before the official start of the recession in 2007. If we aren’t realistic about the true financial health of our country, we won’t find a long-term economic fix. We can’tmove ahead as a
nation if somany are left behind.
singletarym@washpost.com
Readers can write toMichelle Singletary at TheWashington Post, 1150 15th St. NW,Washington, D.C. 20071. Comments and questions are welcome, but because of the volume ofmail, personal responses are not always possible. Please note that comments or questionsmight be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.
THURSDAY, SEPTEMBER 23, 2010
Pentagon, Lockheed sign F-35 contract
BY ANDREA SHALAL-ESA The Pentagon said Wednesday
that it has reached a “fixed-price” agreementwith LockheedMartin for a fourth batch of F-35 fighter jets,wrappingupmonthsofnego- tiations about the U.S. military’s biggestweapons program. Pentagon spokesman Bryan
Whitman said the deal includes 30 jets for the United States and one for Britain and an option for one for theNetherlands. He said the contract provides a
“fair and reasonable” basis for the fourth lot of production jets and “sets the appropriate foundation for future production lots” of the $382 billion multinational Joint Strike Fighter program. Lockheed, based in Bethesda,
said the new contract was valued atmore than $5 billion, including sustainment costs for the new ra- dar-evading fighter jets and tool- ing needed for their production. Pentagon acquisition chief
AshtonCarterandLockheedchief executive Robert Stevens signed the agreement Tuesday. Whitmangavenodetailsonthe
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At atime when issues of corporate governance, financial reporting and business ethics are making headlines daily, it is important to
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price per airplane negotiated in the contract, but he said it was belowindependent cost estimates released earlier this year. He said the deal, initially expected inMay, took longer to negotiate given a shift to a “fixed-price, incentive fee” contract structure two years earlier than planned. Previous F-35 production con-
tracts were on more traditional “cost-plus” contract terms, which make the government liable for cost overruns. Defense Secretary Robert M.
Gates retooled the programearli- er this year, adding 13 months to the development program, with- holding $614 million in award fees fromLockheed and firing the Marine generalwho ran it. “TheDepartment continues to
closely monitor and aggressively manage this important program,” Whitman said. The F-35 Joint Strike Fighter
will eventually account for about 25 percent of Lockheed’s revenue. Lockheed confirmed the agree-
ment ina separate statement, say- ing it brought the total number of F-35 production aircraft under contract to 63, including aircraft for the U.S. military and three other countries. “We remain con- fident that this agreement keeps us ontrack to reachour long-term price projections for the F-35 at full-rate production,” said spokes- man Joe LaMarca. The delay in reaching a deal
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priations defense subcommittee slashed funding for 10 of 42 F-35 fighters the Pentagon requested inits fiscal2011budget, sayingthe move would give the program more time tostabilizeproduction. —Reuters
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