Thursday, March 12, 2009

Is it a D-word yet?

Signs abound that the economy is slumping deeper and faster than anyone expected. At about 6,500 last week, the Dow will reach what I -- a nonexpert, noneconomist journalist -- think is the infamous "bottom" before the summer. That's too soon, as the economic stimulus effects won't begin to be felt at least until the fall.

Could it go lower than "Dr. Doom" predicted? Don't panic, but the D-word may soon aptly describe prevailing economic conditions.

In fact, I understand that Japan's much-feared "lost decade" was less severe, at an average 5.5 unemployment, than our current much higher jobless rate. The Japanese tanked and stayed tanked for a decade, but at much higher levels of well-being than the United States is at right now.

And they kept up their cradle-to-grave universal national health system, which we don't have.

It's no reason to cheer, but even in the depths of the Great Depression -- and we're not even remotely going there -- 77 percent of the workforce was employed. At worst we'll hit maybe 90 percent. That's bad if you're one of the unemployed, but ... you'll still have 9 in 10 chances of keeping your job -- and even better chances right now.

You're going to live through the fourth economic depression the United States has ever experienced. It's OK, we can all make it if we stick together.

2 comments:

Hendaque said...

"We can all make it if we stick together."

Hey! More uncharacteristic optimism from Ceciliaux!

Or is it just his way of promoting the avoidance of the self-fulfilling prophecy.
As Professor Roubini says, "Part of the trouble is that fears of a downturn are self-fulfilling. Anticipating a slump in demand, companies are cutting capital investment, production and jobs.

Anne said...

I'm glad someone is optimistic.

When I listen to Cspan coverage from Obama or his officers, I'm hopeful for the nation/economy/world. When I listen to the Republican leadership, I think how obtuse they are, rattling off pat answers and objection to Obama's efforts.

So much is contingent upon his success that I have to be optimistic, too. It's hoping against hope.

Anne