“The sky is falling, the sky is falling!” – attributed to Chicken Little.
The sky is not falling. The world is not coming to an end and the Apocalypse is not upon us. We are in the Great Recession, one that began in 2007 and the worst since the Depression, but we’ve been there before and we will probably be there again, at some point.
(Your not so humble columnist’s advice – drink coffee, now.)
The economy (GDP) grew at a rate of 3.7% for the first quarter of 2010, 2.4% for the second, for an aggregate of 3%.
Imports in the second quarter are up 28.8% from the first (we’re buying) and exports are up 17%.
GDP growth numbers for 2007 – 1.9%, 2008 – zip, 2009 – <2.6%.>
Investments in equipment and software – up 20.4% in the first quarter of 2010, 22% in the second.
Despite brutal unemployment numbers, the economy has clearly turned the corner under President Obama. Clearly, also, the previous administration drove the car off the cliff. For those not versed in the numbers, a 3% growth in the GDP is considered the minimum for a healthy economy.
Does the downturn in growth in the second quarter of 2010 mean that we are headed for a “Double Dip” recession? Nope. It could happen if consumer buying and confidence continues to remain stagnant or even drop. And why is consumer confidence so shaky? One word:
In the middle of a mid-term election year, it behooves Republicans to downplay the signs of recovery, in an effort to regain control of the Congress and various state offices.
Fortunately, there are signs that their message is not being accepted readily by Americans. Democratic numbers are slightly up, Tea Party disapproval numbers are up, as well, and Congressional approval totals still are at rock bottom.
Consumer spending drives two-thirds of the American economy. If Americans draw back from spending due to fear, Democrats will have no choice but to belly up to the bar and order another drink. Given the current political climate, that would be political suicide, but it would be the right thing to do.
While we teeter on the brink, now is not the time to be timid or to play politics. TARP and Stimulus saved us from Depression – now we need to be vigilant in ensuring that the economy continues it’s fragile recovery.
William Stephenson Clark