Last week we received the July unemployment numbers and, of course, the latest payroll data. As always, every pundit and his brother opined on and dissected the most minute movement in the data.
However, what I don't hear said enough in these analyses is the truth: The economy is not cutting it, period.
Every piece of data, from the unemployment and workforce participation rates to the average hourly wage to the U-6 number that shows underemployment, remains a substantial concern.
Depending on whether you're counting from 2007 or 2008, we've had five or six years to recover from the financial crisis. It's now 2013, and the economy is neither where it should be or where it needs to be. Moreover, the growth rates are certainly not going to sustain our position as the world economic leader.
We can't solve the problem if we are not honest about it. With GDP growth still at less than 2 percent last quarter, the economy is limping along at best. The best thing that the economy has going for it right now is that the rest of the world is in various states of disarray, too, so we can temporarily wear the crown of "the best of the worst." That's not a crown that we should wear proudly, and it's not a title we can keep forever.
So why is there an unwillingness to be honest about where we are economically? Well, one answer is that the market has been on fire. But the market is not the economy—and today it has been decoupled from it so much that it's not even a gauge of the economy. That's because the very same Fed intervention that has brought the market from critical care all the way back to life is creating a perverse disincentive that is affecting our true economic recovery.
(Read more: How bad math about Big Macs gives me indigestion)