There is something affected, something not believable, something agitpropish, about all the cheers for the glorious economic recovery we are experiencing. Some of its biggest boosters don’t even quite believe it.

I’m thinking of the reporter on National Public Radio a few days ago who, at the end of a segment, offered a passing warning that the bust did not come to an “organic” end, but rather was artificially stopped by government intervention.

That’s an intriguing admission, suggesting that not even this reporter really believed it. I certainly don’t believe it. In fact, I seriously doubt that even the champions of this great fakeroo believe it.

What he hinted at is the crucial difference between a recovery that comes from within the structure of the market economy and one that is imposed from without. The former is sustainable, a basis for growth in the future. The latter is not sustainable. It lasts only so long as the stimulus lasts.

The most conspicuous problem remains unemployment, which is nearing double digits even in the official data while unofficial data even from Fed economists hint that the reality is closer to 16%. Among the youth, the rate is 25% and growing.

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Month after month, the press announces the “good news” that unemployment is not as high as expected, and yet if you look at the trend line, we have not seen an uninterrupted climb in job losses of this scale in our lifetimes.

To be sure, this is only a symptom. When an economy goes from boom to bust, a bout of job losses is inevitable. It can even suggest a good trend, as people leave jobs in failing sectors to enter jobs in the healthy sectors. Policy should not attempt to stop this trend.

What is of concern here is the timing. The problem keeps getting worse, which suggests that in fact the bust has not played itself out entirely. And this is backed by other trends.

Let’s first talk about housing statistics that are off the cliff. Consider housing starts. Over a year, the crash from the height of 1.8 million per month to 390 thousand per month. The latest rebound looks like a blip on the radar screen. July numbers on foreclosures are the worst we’ve seen, and the third time in five months that we’ve seen a new record. Already 2.9 million homes have been foreclosed on, and there are probably at least that many still on the chopping block. Banks are reluctant to do the deed because foreclosures devastate their books, so they delay as long as possible.

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There is the sleeping giant of commercial real estate, which rose as much as residential housing, tripling loaned dollars in the course of a mere 10 years. And yet there has not been a crash here. Looking at the numbers, one gets the sense of a high-flying jet about to run out of gas.

And when you broaden the perspective past housing, to the whole of domestic investment, it looks like an Olympic high dive with no end in sight. In fact, ten years of investment has been effectively reverted. We stand today where we stood in 1999. Investment is a very important piece of data for assessing our future, because it is always forward looking. In this case, there doesn’t look to be progress in the future at all. Even from the point at which this figure turns, we have another few years before real economic growth returns.

Why do matters in the financial sector look better? It is wholly a consequence of trillions in artificial stimulus, a market re-jiggered and falsified through money creation and partial nationalization and bailouts. These do not last.

A few months ago, many people were worrying about the inflationary future that is suggested by the astonishing increase in phony bank reserves over the last year. Today, however, the tune has changed. Bernanke is now being heralded as the great genius of our times.

What this suggests is that no efforts are going to be undertaken to suck the phoniness out of the system. The new reserves are going to stay in the system, and every effort will be taken to convert the reserves into real money supply increases. And if this actually happens, you had better hold on for a wild inflationary ride.

Do we even need to mention the federal budget problems? Revenues continue to collapse as government spending soars, creating a gigantic hole in the budget at a time when pressure for more spending is accelerated by the recession. There is no talk of budget cuts. We are entering into uncharted territory.

A year ago this month, the whole country was in agreement that we had been living an illusion for the previous ten years and that the prosperity we thought we were enjoying was not sustainable. There was no dissent on this point. Even Obama admitted it. Today, the illusion is even more egregious than it was, and yet people are once again embracing it as if it will not end.

The policy response to the downturn has been one of the most short-sighted and economically irrational in the entire history of mankind. Why did they do it? It’s all about the politics of the short term. The entire economic structure has been phonied up in order to make a success of the Obama cult. This is the driving motivation, alongside the obvious desire on the part of financial and banking bigshots for a bailout.

Please clip and save this column and reread it 18 months from now. In the meantime, don’t be among those who believe that the government has discovered the secret to prosperity in the offices of the Bureau of Engraving and Printing.

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