It was over

So said the NBER today. The recession was over in June of 2009.

That was when my family was getting ready to move across the country, from the West Coast to the East. It didn't feel that way, although the market was on a rebound and GDP started to go positive.

For us, it took more than a year since then to finally have a sense that our lives are getting back on track, after we bought our house in August.

We've just moved in. Our new neighbors are getting to know us and vice versa. We're receiving welcoming notes and cookies. Our kids are already making friends with the kids in the neighborhood. There are doctors, engineers, businessmen, pilots, professors... mostly professionals. Interestingly, almost half of my neighbors are fairly new to the neighborhood. There have been a lot of turnovers. The new families will be fostering a sense of new community, I think.

But the lingering affects of the recession are visible. Home prices are still dropping... and just as we moved in to our new house, a house across the street was put on the market for sale. Its owner just had a surprise job change. Another home owner told me that he is closing down his business.

I'm still glad our moves are finally over.   

Education and Unemployment Rate

Laura Tyson, my former dean at Haas School of Business, wrote an op-ed piece on NYT in which she argues for a second stimulus spending. Her arguments are inline with some of the discussions I've read from Paul Krugman and Joseph Stiglitz. These practicing Keynesian economists are all for government intervention. So that's not surprising.

What's kind of surprising is she would say things like worrying about deficits and the size of the government is focusing on the wrong things. Wrong things? She probably meant wrong focus.

The statistics she cited about education and unemployment rate is very interesting:

Consider how the unemployment rate varies by education level: it’s more than 14 percent for those without a high school degree, under 10 percent for those with one, only about 5 percent for those with a college degree and even lower for those with advanced degrees.

Education in the U.S. does help cushion workers against the general and severe downturn. This is consistent with the outsourcing movements over the last decades: low-paying jobs that require little or no education moved mostly to countries like India and China. What U.S. should do is indeed to make college education more prevailent among its population of over 300 millions. But that cannot be accomplished in a few months or a few years.

In contrast, college degrees in China may not mean high level of employment. I have not seen any good statistic, but casual observation suggests that family background and connection play a much more important role in landing a stable job, preferrably in government or state-own companies,  in China.

Brain is still valued a lot more in the U.S.