ECRI: Brace Yourself For More Frequent Recessions Over The Next Ten Years

The Business Insider ^ | 7-4-2010 | Vincent Fernando, CFA

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ECRI: Brace Yourself For More Frequent Recessions Over The Next Ten Years

Vincent Fernando, CFA
Jul. 4, 2010, 6:50 PM

This discussion with ECRI’s Lakshman Achuthan on All Things Considered is an excellent listen. He explains the Economic Cycle Research Institute's view that A) the slowdown ahead is already a done deal and can't be stopped by any government policy we enact and that B) we face the unfortunate prospect of more frequent recessions over the next ten years. Finally, C) he explains the threat of U.S. unemployment getting worse within the next ten years before it has fully recovered first. Which means 10%+ unemployment could easily be hit again, even if it first eases back a bit.

In terms of ECRI's view, it seems that while warnings of an impending double dip recession (in GDP growth terms, ie. GDP declining) are probably too extreme, the real threat right now is that markets, over the next ten years, will be constantly terrified about the risk of a potential recession happening a few years forward. This could prevent them from ever really breaking out to the upside, Mr. Achuthan explains. It's a short, concise interview, well worth the time to listen:

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Politicians' Latest Austerity Fad - The Most Severe Contraction Of Economic Support In Decades

[matt1234]

I’m bracing myself for one continuous recession/depression. It’s simpler that way.

[MGMSwordsman]

The USA as we currently know it will not be around in 10 years. Maybe not even 5.

[ErnBatavia]

I’m afraid there’s a lot of accuracy here...with the private sector being systematically shut down, industry-by-industry, there are fewer producers out there to feed Utopia.

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The Employment Depression ("Employment May Never Recover")

[WHBates]

Well I certainly think that if our current brain trust can’t figure it out then it just can’t be figured out. I mean really if Obama and the Democrats can’t fix it with spending and taxing it just can’t be fixed. Oh, and we’re all doomed BTW.

[johnthebaptistmoore]

This is part of the reason why just voting for a majority of non-leftists in ‘10 and beyond isn’t enough! “Leftist damage” is already in place as legislation, and it’s very possible that this leftist legislation really can’t be undone by any future non-leftist legislators! There’s a lot of leftist legislation in place from FDR’s days as POTUS on through Obama’s duration as POTUS that’s very bad, with no signs of any of it ever successfully being undone.

[ClearCase_guy]

I was talking to a Lib yesterday who installs energy-efficient windows. He's convinced that the economy is solid, and more people need to do what he's doing -- be an independent contract in a green industry, and take advantage of the tax incentives.

I tried to sell him on the idea that somewhere, somehow, somebody has to actually make something.

He disagreed.

[PGalt]

...“Leftist damage” is already in place as legislation, and it’s very possible that this leftist legislation really can’t be undone by any future non-leftist legislators! There’s a lot of leftist legislation in place from FDR’s days as POTUS on through Obama’s duration as POTUS that’s very bad, with no signs of any of it ever successfully being undone.

Very good observation, johnthebaptistmoore.

[Stultis]

I was talking to a Lib yesterday who installs energy-efficient windows. He's convinced that the economy is solid, and more people need to do what he's doing -- be an independent contract in a green industry, and take advantage of the tax incentives.

So, this guy has committed himself to an industry, the viability of which is utterly dependent on huge and constantly increasing government subsidies, at a time when government has run out of money, and he thinks he's sitting pretty? And what's more, he thinks more people jumping into the "green jobs" bubble will actually improve his own situation?

You can't really hope to argue with anyone that stupid.