This Recession, It's Just Beginning

Washington Post ^ | June 27th, 2008 | Steven Pearlstein

[wbill]

Poll 3 economists about the state of the economy, and you'll get 5 opinions.

Oil prices are not self-sustaining. This is going to pop, soon.

The days of $0.99/gallon gas are over, though. BUT - the days of $4.00/gallon gas will be over fairly soon, too.

[SERKIT]

Does this turkey know the definition of a recession?

[AndyJackson]

Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

This is going to go down hard because the Fed has been putting off an evil day of reckoning for a good decade. We have been living off the fat of the land (well internationally generated debt, actually), and have developed so many structural imbalances it will take a long time to work out. The inefficiencies are stupendous resulting from a legal and regulatory nightmare behemoth, a financial system that makes money, not off of investing in the engines of production, but off of pyramiding debt instruments, an automobile industry that is geared up to produce junk, SUVs rather than head to head competition on quality and design, and a lot of babyboomers running the whole place who have never done a productive thing in their lives.

This is not going to sort itself out tomorrow.

[djsherin]

What a novel set of ideas. Could it be that this was really what the Founder’s intended and not the big government philosophy we have today? I mean when they wrote that, that thing... the uh, Constituency... uh, no... oh the Constitution, do you think they really MEANT it to be taken seriously???

Long live limited government.

[Jeff Chandler]

I refuse to participate in an economic downturn.

Dittos to that.

The economy grew by 1% last quarter. That's not anything to brag about, but it's surely no a recession. Show me a couple quarters of negative growth, and then we'll talk recession.

[Allegra]

I like your attitude. :)

I don't really see any serious signs of downturn in Houston, either. In fact, I was downtown last night and it is positively booming.

I'll be leaving the U.S. in just over a week to watch this from afar, but I don't think it's going to come to the fruition that the doom-and-gloomers would like to see.

[litehaus]

"Show me a couple quarters of negative growth, and then we'll talk recession."

BUT ! All the talking heads say we are IN One....But then again they 'make' the language....They 'effort' to 'transition' to 'conversate' with folks....

[I see my hands]

"Does this turkey know the definition of a recession"

Yes he does. He also knows misuse of the word can hurt America.

[Coffee200am]

[RightWhale]

What would be the effect of curency devaluation? Would that make any difference to anybody?

[Tallguy]

...China and India are less likely to handle the increase in cost than we are.

I thing I have to disagree. Those economies that you mention are manufacturing economies where energy prices are just another input. Remember Japan in the mid-70's to mid-80's? They did quite well during the last period of high-inflation & energy price spikes. Their advantage over our economy in manufacturing is relative. IOW's they will have an advantage over us regardless the price of oil.

I think China & India will pay the price to maintain their level of economic growth. Now, they may paper-over other structural problems in the process like Japan did. Collapse after a long 10-year run.

[LibLieSlayer]

We are in BOOM times compared to the catah pain era.

LLS

[arthurus]

Currency devaluation is ongoing for these past 6 years, at least. That is merely another word for inflation. “Devaluation” is the government announcing the inflation but devaluation is a less scary word.

[Misterioso]

Only a pollyanna calls what is more obvious each day a source for hysteria. Saying it can’t be so won’t change anything.

[DoughtyOne]

This tendency to throw the nation under the bus, just to get a Democrat elected is a strange thing to behold. It’s why I am repulsed to the degree I am, when my own party does it.

[CodeToad]

Maybe the financial numbers look bad but people are still spending like crazy; the malls are full, the streets congested, and people still eat out for lunch.

[RegulatorCountry]

Interesting illustration ... dress for success, even in a bomb shelter during a nuclear attack?

[what's up]

what is more obvious each day

They've been saying recession is obvious for a year now. But...

Last quarter's GDP was JUST UPGRADED to 1%....NOT a negative.

I believe that recession ain't happening no matter how much oil hysteria the MSM throws our way.

[DHerion]

Considering that those two economies are big exporters and the cost of shipping has skyrocketed in the last two years you find manufacturers leaving those countries and coming back to the U.S., Europe, Canada, etc. Second Japan was many times more efficient in their use of energy in manufacturing than China and India.

[Misterioso]

Well, of course, you are entitled to your beliefs. Far be it from me to challenge your faith.