Recession over? Who's asking? Who's telling?
Is the recession over? The question keeps getting asked. And there's no shortage of economists weighing with all sorts of answers.
One economist, the son of the late John Kenneth Galbraith, made a statement that caught my attention. Asked about whether we might have a "double dip" recession (meaning, we're out of recession now, but will slip back in soon), leading to a "lost decade" (meaning no/slow growth in the economy for the next ten years), he said:
"There's no way we're going to tolerate a Lost Decade in this country. It's a fantasy, because the House of Representatives has elections every two years. The country is not going to tolerate 10 percent unemployment indefinitely. People (in power in Washington) need to be aware of that. If they don't take the opportunities now . . . someone else will."
Do you see what he's saying here? He's saying that the government won't allow a lost decade.
I hadn't realized that the government decided whether the economy was going to do well or not. Maybe that's good news. After all, if the government can make that sort of determination - that we'll not have a "lost decade" - then all's right with the world. Why would they EVER decide for no/slow growth, if indeed it's in their power to determine this?
Now I don't know if Galbraith actually meant this, but don't his words seem to indicate what I've just said? What's worse, many people really think this way. They think the government can "save" the economy - even that the government's policies will make sure the economy gets back on track and starts humming again. It's all in their hands.
Of course, if that's true, it begs the question of why they "allowed" this recession in the first place.
Oh, and there's this too: we may be, right now, at the tail end of a "lost decade" already! On September 13, 1999 the Dow closed at 11,030. Last Friday it closed at 9, 605 - a 13% decline. The FTSE (London's exchange) declined a bit less. The Japanese stock market, on the other hand, declined about 40% over the last decade (down from 17,711 to just over 10,000 now).
(Thanks to Chris Weber for these stats.)
Now, if you add in real estate you've covered a lot of what people own., besides cash and maybe some bonds. Sounds like a lost decade to me.
We can even take this one more step. My experience tells me that the past 10 years have simply not been a time of increasing living standards. People I know, people I work with pretty much have either kept what they have (if they're lucky), or they've lost ground over the last 10 years. A few unfortunate folks have lost quite a bit.
How about you? What's your experience been? Has this been a good decade for you?
One economist, the son of the late John Kenneth Galbraith, made a statement that caught my attention. Asked about whether we might have a "double dip" recession (meaning, we're out of recession now, but will slip back in soon), leading to a "lost decade" (meaning no/slow growth in the economy for the next ten years), he said:
"There's no way we're going to tolerate a Lost Decade in this country. It's a fantasy, because the House of Representatives has elections every two years. The country is not going to tolerate 10 percent unemployment indefinitely. People (in power in Washington) need to be aware of that. If they don't take the opportunities now . . . someone else will."
Do you see what he's saying here? He's saying that the government won't allow a lost decade.
I hadn't realized that the government decided whether the economy was going to do well or not. Maybe that's good news. After all, if the government can make that sort of determination - that we'll not have a "lost decade" - then all's right with the world. Why would they EVER decide for no/slow growth, if indeed it's in their power to determine this?
Now I don't know if Galbraith actually meant this, but don't his words seem to indicate what I've just said? What's worse, many people really think this way. They think the government can "save" the economy - even that the government's policies will make sure the economy gets back on track and starts humming again. It's all in their hands.
Of course, if that's true, it begs the question of why they "allowed" this recession in the first place.
Oh, and there's this too: we may be, right now, at the tail end of a "lost decade" already! On September 13, 1999 the Dow closed at 11,030. Last Friday it closed at 9, 605 - a 13% decline. The FTSE (London's exchange) declined a bit less. The Japanese stock market, on the other hand, declined about 40% over the last decade (down from 17,711 to just over 10,000 now).
(Thanks to Chris Weber for these stats.)
Now, if you add in real estate you've covered a lot of what people own., besides cash and maybe some bonds. Sounds like a lost decade to me.
We can even take this one more step. My experience tells me that the past 10 years have simply not been a time of increasing living standards. People I know, people I work with pretty much have either kept what they have (if they're lucky), or they've lost ground over the last 10 years. A few unfortunate folks have lost quite a bit.
How about you? What's your experience been? Has this been a good decade for you?
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