Welcome to the Recovery?

Today, Treasury Secretary Timothy Geithner has an opinion piece in The New York Times entitled, awkwardly, “Welcome to the Recovery.” The article comes as economists project that unemployment might head back up into the 10 percent range, and on the day the Bureau of Economic Analysis released a monthly report clearly showing the recovery not just decelerating, but stalling out. American families are hurting, and Geithner goes to great pains to show he knows that in the piece.

Nevertheless, he points to very real and very significant signs of a turnaround:

• Exports are booming because American companies are very competitive and lead the world in many high-tech industries.
• Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months.
• Businesses have repaired their balance sheets and are now in a strong financial position to reinvest and grow.
• American families are saving more, paying down their debt and borrowing more responsibly. This has been a necessary adjustment because the borrow-and-spend path we were on wasn’t sustainable.
• The auto industry is coming back, and the Big Three — Chrysler, Ford and General Motors — are now leaner, generating profits despite lower annual sales.
• Major banks, forced by the stress tests to raise capital and open their books, are stronger and more competitive. Now, as businesses expand again, our banks are better positioned to finance growth.
• The government’s investment in banks has already earned more than $20 billion in profits for taxpayers, and the TARP program will be out of business earlier than expected — and costing nearly a quarter of a trillion dollars less than projected last year.

What will really turn things around? Jobs. At some point, private employers, now hoarding cash with their profits, will return to picking up employees. That means Americans will be able to spend more, and the cycle will become virtuous again.