Recession Almost Over: I Did It!
Yesterday I was going to write about how heat waves really inspire belief in global warming and efforts to curtail same by recycling and energy efficiency but I was really busy yesterday and it also occurred to me that I really didn’t have anything new to say. I just would have been retreading old ground so just recycle more and turn off your damn lights when you don’t need them.
So today I come across this article over at Yahoo!
http://ca.news.finance.yahoo.com/s/21072009/2/biz-finance-bank-canada-tantalizingly-close-declaring-recession-brightens-outlook.html
It turns out the recession is almost over. In words of Stephen Colbert, “I did it”!
A little extra consumer spending on electronics and automotive, economic bellwethers, and some travel and here we are, economy fixed.
You’re welcome.
Now what have we learned? Don’t spend what you don’t have. Don’t risk hard earned money on things that sound too good to be true. Save when and where you can. And when your money isn’t doing anything for you, spend a little.
I was at Superstore yesterday and noticed what could only be called a price collapse on some mainstays like apple juice and bananas. This was much more significant than a price drop. I wasn’t quite sure what to make of it at the time. The price of bananas was so low they were having trouble keeping the produce section stocked to meet demand. Was this deflation? Or was it the dreaded stagflation that haunts economists’ nightmares? Well it looks like it was the harbinger of stabilization.
Fuel prices have been on the decline of late, a trend I read about beforehand but frankly didn’t believe. Gas was edging toward $1.20/liter not so long ago only to slide yesterday down to nearly $1.01/liter and that after a hike in the gas tax. It’s just the market correcting itself I suppose.
Economies can almost always be described as periods of stability and instability – or boom-bust if you prefer. Government agencies and automatic adjusters like unemployment insurance help cut down on the bust and the severity of the rollercoaster ride.
Unemployment insurance is great. It’s the set-it-and-forget-it of economic controls. You put it in place and it automatically does exactly what the economy needs. When things are booming the tax keeps things from booming too big too fast and puts on the brakes a bit to inflation while rebuilding its coffers. Then when things go bust it’s automatic mandatory government spending that generates economic activity that otherwise might not be present. It’s brilliant. I don’t know how intentional it was, it probably had its origins in compassion or practical need but I doubt few economists don’t see it’s brilliance if they were to be completely honest with themselves. But I digress, enough of the unemployment insurance love-in.
Obviously this recession won’t end over night and even if the fed says it’s over, which it hasn’t yet, that doesn’t make it so. However, when it comes to things like the stock market, the currency market, and the commodities market belief is often far more important than reality. Why do you think consumer confidence is such a key indicator? The point is, good news stories like this one can only serve to fuel and accelerate a recovery so tell your friends: the recession is almost over.
