This blog has been reminding people that, despite the irrational exuberance of the stock markets, buoyed by corporations taking axes to their labor costs and faith in the Fed and ECB, underlying growth remains terribly weak.

How weak was seen this week, when figures for fourth quarter GDP growth came in. Here is the tally:

US: NEGATIVE GROWTH 0.1%
Eurozone: NEGATIVE GROWTH 0.6% (Germany -.6%, France -.3%, Italy -.9%, EU 27: -.5%)
Japan: NEGATIVE GROWTH 0.1%
UK: NEGATIVE GROWTH 0.3%

Oh, and the growth engines of the emerging markets that are supposed to pull us out of this?

BRAZIL: 0.6% Growth Q3
CHINA: 7.4% Growth Q3 (year over-year, still missing the official target)
INDIA: 5.0% (FY to March 2013, lowest in 10 years)
RUSSIA: 0.6% Growth Q3

So all the major rich world economies — US, Japan, Euro — are revisiting negative growth, while the major emerging economies (Russia excepted), though still growing, have fallen to decadal low growth rates.

This SHOULD NOT BE HAPPENING more than three years after the end of the Great Recession. Of course, Reinhart and Rogoff will simply say that is the normal deleveraging process, which can last up to a decade. But there should be some return to modest growth — it is austerity policies which, as in the 1930s, are sustaining a truly GREAT recession. Indeed, it seems likely to me that history will deem this a great DEPRESSION; not for the US, where output has already exceeded pre-2007 levels, but for Europe where unemployment levels in southern Europe and lost output in Northern Europe are approaching or exceeding 1930s levels.

Welcome to the great growth trap — it seems the world’s main public policy priority for this decade should be to find strategies to accelerate a return to growth. Instead, too many leaders are simply focused on short-term debt issues. That will not get us out.