Saturday, July 18, 2009

Looking Into the Future

It is hardly surprising that, these days, a lot of people want to know what's coming. So many people feel like they were broad—sided by the bad economy, whether they were business owners who saw a sharp decline in business or rank–and–file employees who lost their jobs through no fault of their own.

Many observers have tried their hand at gazing into the crystal ball. You are urged to cast a wary eye in each one's direction.

The Obama administration — apparently — thought it had covered the bases with its stimulus package back in February, but Joe Biden recently admitted that the administration "misread" the economy and Barack Obama defensively insisted that the administration received incomplete information.

Excuses don't feed the bulldog.

Gallup reports that, after a temporary narrowing in the spring and early summer, surveys show that the number of people who believe the economy is getting worse is rising — and the number who believe it is getting better is dropping.

Pessimism can get out of hand quickly, as President Clinton learned in 1994, President Reagan learned in 1982 and President Carter learned in 1978.

At BusinessWeek, Chris Farrell says, "The good news is that the downward momentum of the Great Recession is subsiding."

But, in the next paragraph, he observes, "[T]he consensus forecast is for the economy to emerge slowly out of the downturn. The recovery won't feel much like one."

The headline on Farrell's article asserts that "[h]ealth care and education will keep adding jobs," and, in general, he expresses confidence that "job creation is something the U.S. eventually does well."

"Problem is, it could take years to work down a 10%–plus unemployment rate to more acceptable levels, say, in the 5% range," he writes. "Wages are likely to be anemic, too, considering how tough the competition will be among laid–off workers for jobs."

In other words, brace yourself. We haven't turned the corner yet. We're probably going to have to wait years. And some folks don't have years to spare while the people in charge try to get a handle on things.

Oh, and if you were thinking that we might be able to accelerate things with another stimulus package, I recommend that you channel your energy in a more productive direction.

The administration won't have only the Republicans' opposition to worry about this time. After committing nearly $800 billion to the stimulus back in February, there is less of an appetite for adding to the debt load on Capitol Hill. The Democrats might be able to get the support they need for another stimulus package in the House, but getting 60 votes in the Senate is going to be much tougher.

Better use your "political capital" while you can, Mr. President.

1 comment:

otin said...

Sorry that I have not been around, I have not used my chat in so long! I have been so busy trying to keep up with comments and my job that I just don't have time for a lot of things, I only have about 3 hours a day to be online! Oh, on the Walter Cronkite death, I will always remember the moon landing coverage, it still gives me chills!