“From a technical perspective, the recession is very likely over at this point.” So said Federal Reserve Chairman Ben Bernanke on September 15th, 2009 (MarketWatch). What he failed to mention is that, from a real-life perspective, the Depression is well underway. Bernanke’s “technical” bright spots–home prices and sales are up, job losses have slowed, retail sales are up, the stock market is rallying, and similar “indicators”–are a sad collection of half-truths, fraudulent statistics, and the effects of government support, none of which justify his claim that the recession is over. Indeed, there is ample evidence that he overlooks of an economy that has fallen into the Second Great Depression. Technically. Literally. Abysmally. Really.

Sure, the housing market is up fractionally over last year, but that’s largely the result of a government subsidy, distressed sellers unloading homes at a loss, and millions of foreclosed properties being withheld from the market in a “shadow inventory.” Many of this year’s buyers will find they’ve paid too much when those foreclosures, along with a fresh new batch, hit the market next year. Prices that are already down 40-50% in some markets will drop further. The home equity that Americans were counting on to supplement their pensions and Social Security is gone. And as for their pensions and 401(k) funds, they’re still way down, despite the recent market rally. There’s even talk in congress of reducing future Social Security benefits. The proverbial three-legged stool of retirement funding (pension, Social Security, savings) is turning to sawdust. Americans stopped saving years ago (the rate is 0.7 percent in the U.S., compared to 12.8 percent in France), counting on rising home equity to make up the difference. Now, the first wave of 70 million baby boomers nears retirement with little or no financial resources they can count on and a job market that offers them few prospects.

There are six unemployed Americans for every job opening, but Ben Bernanke and others who claim the recession is over are finding hope in improved employment statistics. In reality, the only thing that’s “improved” is the deviousness of politicians and statisticians in masking the greatest unemployment crisis since the Great Depression. It’s bad enough that decreases in the rate of layoffs are touted (e.g., CBS News, August 7, 2009: “Employers Shed Just 247,000 Jobs, Dramatically Lower Than Expected; Strong Sign Recession Is Ending”), but the need for 100,000 or more NEW jobs every month to keep up with school graduates and population growth is completely overlooked. So even in a good month, when “just 247,000″ lose their jobs, in reality nearly Four Hundred Thousand have fallen into that vast pool of unemployed. It’s hard to tell how big that pool is, because millions of unemployed and underemployed are not even counted, by design. The headline in the aforementioned CBS News article was “Jobless Rate Falls to 9.4% as Layoffs Slow.” The actual jobless percentage is about twice that. “Discouraged workers,” who’ve been unable to find jobs and have given up looking, are not counted as “unemployed.” They no longer exist, “from a technical perspective.” Nor do the self-employed, even if they have no customers and therefore are actually unemployed.

Further, the percentage of “employed” does not take into account full time equivalency (i.e., FTE; the rule of thumb for full time employment is 2,080 paid hours a year). So full time workers whose hours have been cut, and full time workers who’ve been laid off and have taken part time jobs, and part time workers who’d like to work full time but have never been able to do so, are all counted the same as fully “employed” workers. In business, 50 half-time workers (1,040 hours a year) equals 25 FTE’s, but to government statisticians they equal 50 employed workers. The bottom line is that in the real America over 26 million are unemployed or significantly underemployed. That’s 20 percent of the workforce, and it’s growing every day. In the depths of the Great Depression, 25 percent were unemployed. We haven’t reached the depths of this, the Second Great Depression, but before long we will surpass that 25 percent milestone.

Keep in mind that many of those employed are struggling to earn enough for food, shelter, and other necessities. In a recent CareerBuilder survey “61 percent of workers report they always or usually live paycheck to paycheck just to make ends meet, up from 49 percent last year and 43 percent in 2007.” Hourly wages have been falling behind inflation (which government statisticians also underreport by design) for years. Now hours are being reduced; laid off workers are lucky to find part time jobs at drastically reduced hourly rates; savings are exhausted; home equity ATMs are closed; and credit cards are maxed out. Just one big unexpected expense can spell disaster (e.g., medical expenses are the leading cause of bankruptcies). Is it any wonder that the Consumer Confidence Index has fallen to 53.1 (1985=100).

Yet Bernanke chooses to look on the bright side. Retail sales are up, fractionally. The fact that this is mainly the result of the government subsidizing new car purchases (i.e., “cash for clunkers”) and cannot possibly be sustained does not cause him to temper his optimism, because he has that measured, refined, “technical perspective.” Down here at ground level in the real world, we see workers being laid off and stores and factories closing their doors, lines around the block for minimum wage jobs, bankers doing okay but food banks running out of food, taxes being raised to offset decreased revenues, tents popping up in parks and cardboard housing sprouting like weeds beneath highway overpasses. Even those with jobs have cut way back on trips to the mall and the cinema and restaurants and beauty shops. Fully 70 percent of the economy is based on consumer spending, and consumers are spending less and less and less. At our high levels of unemployment, it is ludicrous to speak of a “jobless recovery.” Saner heads wonder if this will be a Christmas without presents, or whether a season of department stores full of clothing, makeup, toys, furniture, and other goods–but empty of customers–will finally stem the maniacal stock market surge.

What’s the rationale for investing in the stock market right now? It’s got to get better, because “It’s Already Worse Than the Depression”? That’s the title of an article in the Motley Fool that reports, “According to Ibbotson Associates, of the 74 rolling 10-year periods since 1926 (i.e., 1926-1935, 1927-1936, and so on), U.S. large-cap stocks posted negative returns in just three of them. The first two were 1929-1938 (negative 0.89% compound annual return) and 1930-1939 (negative 0.05% compound annual return), and involved the Depression. The third loser decade was the most recent — and the worst. From 1999-2008, U.S. large-cap stocks “returned” a compound annual average of negative 1.38%. Who would have thought back in 1999, when we were more worried about Y2K than our 401(k), that in the subsequent decade big-name American stocks would do worse than they did in the 1930s? Not many.”

It doesn’t have to get better just because it’s been so bad. As was the case in the temporary rebound of the market in the Great Depression, stock-churning broker-fraudsters and out-and-out stock manipulators have goosed the market for a few months now, but they can’t obscure reality for much longer. If only it were just a matter of overvalued stocks, things might get sorted out through another stock market crash. But this time around, we’ve also got overvalued private and commercial real estate. Those markets will have to crash, too. I fear that even those sacrifices will not be enough to appease the economic gods this time around, however, because of the “legacy assets.” You remember, those near-worthless and actually worthless mortgage backed securities and credit default swaps and all the other toxic derivatives, the stuff that got us into this economic mess in the first place? There’s hundreds of trillions of dollars of that junk on the books of banks and other financial institutions, pension funds, corporations, governments, private investors. Crooks and victims alike have been holding their collective breaths, hoping that somehow that paper would be magically converted into something of real value, hoping that they would not have to declare what has been obvious but unmentionable for over a year now. They are bankrupt. And nobody, not all the billionaires and intercontinental-mega-corporations and governments in the world, has the vaults of money or precious metals or even the printing presses running 24 hours a day necessary to pay off all the debts and make good on all the promises and fulfill all the entitlements represented by those paper assets.

When those bills come due, well, it’ll be a big mess. Businesses and banks will be shuttered. States and municipalities will go bankrupt. Countries will default. Currencies will be devalued. People will be in the streets. The streets will be mean. We may yet yearn for the good old days of the Second Great Depression, when we could at least get something to eat in exchange for our food stamps.

Of course, even if the economic gods took pity on us and sent a bailout from heaven to rescue our sorry asses and restore the economy to what it was, say, in 2005, I’d still be worried. This is, after all, truthalyzer.com. It’s not just the greed, rampant speculation, and outright fraud of the 2005 economy that would concern me. It’s something more fundamental about our economic and political system, the notion that a free society should have no constraints to growth and consumption, that the “pursuit of happiness” is a path strewn with more, more, more of everything. More people, more houses, more highways and cars, more stores selling evermore stuff, stuff that was once our natural resources but has become our toxic waste.

In reality, that is not the path to happiness, it is the path to destruction. Anybody who’s taken biology and grown anything in a petri dish knows this simple truth: organisms will mindlessly grow and consume and overshoot all available resources. Then they will crash and die. The Earth is our petri dish. We do not need a deus ex machina to save us from the spoils of our economic folly only to die off a few years later after having exhausted every last resource on our little planet. We need some humans in positions of power to act as though they were smarter than yeast, to take advantage of the current economic stagnation and create a steady-state economy. A civilization at peace with nature, not at war with it. An ecology in which humans, other lifeforms, and natural resources are in balance.

Yeah, like that’s going to happen. Enjoy the Depression while you can.

UPDATE, October 3, 2009: The Labor Department has admitted to a slight error. It appears that 824,000 more jobs were lost in the last twelve months than they previously reported. They say their statistical modeling was a little off, so rather than 4.8 million unemployed, there were 5.6 million who lost their jobs during that period. As explained above, BLS statistics are designed to exclude about half those who are actually unemployed, so the corrected figures must be doubled to reflect real life: 5.6 million x 2 = 11.2 million added to the unemployed pool, just in the last twelve months.

UPDATE, October 15, 2009: CNN reports on forclosures, “The number of filings hit a record high in the third quarter . . . . ‘They were the worst three months of all time,’ said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes. During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession . . . . That means one in every 136 U.S. homes were in foreclosure.”

UPDATE, January 30, 2010: The U.S. is experiencing a “statistical recovery and a human recession,” said Obama economic adviser Larry Summers, speaking on a panel at the annual meeting of the World Economic Forum in Davos. Translation: Wall Street financial wizards are pumping taxpayer money into the stock market to rake in record profits and bonuses, while millions of Americans are losing their jobs and homes and depending on food stamps and charity for survival.