A Gloomy New Year's Forecast

Weekly Standard ^ | 01/02/2012 | Irwin Seltzer

[SeekAndFind]

Now that you have read the results of the various economic forecasting models that have served so many so badly in recent years—they are predicting the U.S. economy will grow in 2012 at an annual rate of between 1.5 percent and 2 percent—let me offer an alternative way of looking at things. It is called ‘pick your if.’

If you believe that the recent decision of the European Central Bank to make unlimited cash available to eurozone banks for the next three years, and that the meeting next week of German chancellor Angela Merkel and French president Nicholas Sarkozy will solve the problems created by excessive debt of some eurozone countries, you will heave a sigh of relief. You will then not have to worry whether the inevitable Greek default will be the first step towards a Lehman Brothers moment, with liquidity drying up, bank credit shrinking, and a deep recession settling over Europe, hurting American banks and exporters.

If you believe that the recent jagged but downward trend in claims for unemployment insurance foretells a drop in the unemployment rate that will be reported on Friday, and if you give weight to recent cheery numbers such as the uptick in regional indices of economic activity, you will stop worrying about the possibility of a renewed collapse in the jobs market.

If you read the recent upsurge in consumer confidence and spending to be suggesting that the demand side of the economy is ready to contribute to a more rapid recovery, you will murmur a word of thanks to the sainted John Maynard Keynes, and face 2012 with equanimity.

If you think that the combination of increased home sales and housing starts, and record low interest rates means that the housing market has bottomed out,

[LibLieSlayer]

IF one just looks at the lies we have been fed... one knows without a doubt that we are in a depression... we have been in a depression and the world will have to stop its progressive march to destruction before we see any real recovery.

LLS

[CGalen]

I heard Sarah Palin agree with Ron Paul once when Sarah said that our problems stemmed from borrowing too much, and that borrowing more will not fix it.

[EVO X]

Hoping for sunny days ahead, but have my foul weather gear ready to go. If Europe wasn't in such crappy shape, I'd be a bit more positive. There are 2 camps out there. The first says things are picking up and the economy should improve this year. The second says a recession is pretty much a done deal.