although he cautioned that pain — especially for the nearly 15 million unemployed Americans — will persist.Bernanke says recession ‘very likely over’ - Economy in Turmoil- msnbc.com. Um, yeah. Let's see. The banks have been propped up. NO real financial regulation has been passed (or even really discussed). So now loans are being securitized again, that is, repackaged and sold to investors. The tertiary banking industry, things like loans for paychecks or high interest medical credit, are showing signs of life. And therefore the Great Recession is over. Something is seriously wrong when the people in charge of the economy seem to understand even less about economics than I do. And I am completely and utterly ignorant of all things economic and yet... Three years ago, right before the credit meltdown began, some investment bankers from Wachovia called me to discuss whether or not they should invest in cosmetic surgery and non-surgical products (things like Botox and breast implants). I told them I knew nothing about investment (although I do know quite a bit about cosmetic surgery since I'm finishing up a book on it), BUT since the entire industry was financed on credit (at very high interest rates) and that the people getting it could not really afford it (85% was financed on credit AND mostly by people who earned less than 59K a year), that the industry could not sustain itself, that a credit collapse was inevitable, that I personally would not invest in anything in the US given that most consumption was based on credit and credit has its limits. Gee, how come I knew that? Because it's so much simpler than economics or Federal Reserve mumbo jumbo or Wall Street propaganda. The US underwent a radical redistribution of wealth since 1980 with the vast majority of Americans ending up worse off in 2000 and the people at the top much much wealthier. Part of this redistribution of wealth was due to the deregulation of banking whereby inordinate amounts of credit were given to people who could least afford it: students, workers, even the poor. The opening up of credit had two consequences. First, it disguised the fact that most Americans were getting poorer because, well, gee, look, I just financed these nice new boobs. This stopped Americans from understanding that wealth was being redistributed upwards because the government began writing laws that screwed workers and benefited corporations and the wealthiest. We couldn't pay attention or organize because we were too enamored of our shiny new stuff, most of which was bought with plastic money. Second, it made Americans poorer. That's right: debt leads to impoverishment. Anyone who has followed the IMF's policies knows that debt does not create wealth. At a personal level it's the same thing: spend 125% of what you make (which is what most Americans were doing) and end up screwed. Americans took on this debt not because we're stupid, but because we suffer from what economists call "optimism bias." We always think things will be better in the future. If I finance this college degree, I'll be better off (but 1/2 of all student loan takers NEVER finish college). But America's promise of a better future stopped sometime around 1980 for most Americans. Our "bets" that taking on $60,000 in debt for a college degree (the average amount of student loans) or even more for a house because "prices will only go up" didn't pay off. So now, without any real regulation of debt, without any discussion of changing how we pay for college or homes or any other of our plans for a better future, and even more importantly, without any restructuring of what Americans produce (right now, we primarily rely on consumption of stuff we can't afford to keep the economy going), the Recession is over. I can only assume that Bernanke believes that this is true. But that means that the people in charge of the economy know even less about it than I do.