Recession: All Over But The Shooting

Last week, July 24, the Canadian papers ran the headline, “The Recession is over in Canada”. This week’s Newsweek has as its full cover the line, “The Recession is OVER”. Below it runs an itty bitty tag line, “Good luck surviving the recovery”.
The unemployment rate will continue to climb. The upper echelons of American society—whose consumption has always fueled recovery in the past—will apparently not be fueling this one. News reports suggest that people whose net worth is twenty million and higher have lost enough money to actually be nervous. They will not be leading us into the new Walhalla, as they have so often in past recoveries.
Newsweek tells us that, of the $787 billion in stimulus money, approximately $230 billion has been allocated so far—as the ranks of the unemployed and furloughed keep climbing and more and more of the people still working face wage cuts.
Economists tell us that $787 billion is a drop in the bucket. Warren Buffett is quoted as saying the current stimulus package is like “half a dose of Viagra”. BusinessWeek tells us that we no longer have the industrial capability to manufacture crucial parts for a Twenty-first Century economy—we must now buy them from abroad.
Data seems to suggest that rather than creating any new jobs, the stimulus has merely managed to save some. In other words, thanks to stimulus money, companies that might have laid off 50 workers have now only had to lay off ten. That does help—but it doesn’t beat the recession.
Obama suggests that his stimulus package might ultimately create five million jobs. We’ve already lost way over six million—and the total is still climbing. Michigan, the hardest hit state, is at 15% unemployment.
I, for one, don’t see how a down-sized General Motors or a Chrysler in thrall to Fiat is likely to put all of us back to work. What we seem to have left is tourism, forestry and agriculture. None of these three are big time enough to make up the losses either.
The local consolidated school district just sent notices to all of us that it no longer has the money to drive school buses down the recently carved streets of the many new developments that sprang up in the past few years. The kids can walk to the corner of the nearest old street.
The township is going through the records with a fine toothed comb. A development near me that has been around since before my house was built—back in 1981—was apparently never registered as an official street. There will be no more grading or snow plowing for the poor souls who live on it. As I have written in previous blogs, for the first time in the memory of any living human, American society simply doesn’t have the money to do everything it wants to do.
A couple of minor things I’ve noticed. I just spent two weeks in Quebec, Ontario and upstate New York. In the past seven decades I’ve taken a lot of trips around this continent—Yellowstone, the West Coast, up and down the entire East Coast, et cetera.
This was the first trip I ever took in which I did not see a single Michigan license plate no matter where I went. Not even in Canada, twenty miles from the bridge from Sarnia to Port Huron. We did not see even one Michigan plate.
I talked to several motel/hotel owners/keepers this past two weeks. Travel is down. (That was nice for us—smaller crowds in places like Lake George and Quebec City.) Fewer and fewer freebies are available at the front desk—razors, tooth paste, etc. Bring your own.
I took my usual walk around this neighborhood tonight. It seems to me that there are an increasing number of SMALL cars—mostly Japanese and Korean—here, in an area that was so recently a bastion for GM, Ford and Chrysler mini-vans and SUVs.
GM has got to win those people back if we have any hope of seeing the money we taxpayers loaned them. I may not, unfortunately, be alone in my attitude that I do not buy hamburgers at Kentucky Fried Chicken, and I probably won’t buy a small car from companies that only yesterday sneered at the very thought of building such a puny car. Small cars come from Toyota, Honda and places like Korea. Up until recently, GM was content to leave it that way.
We need, opines Newsweek, a “new kind of recovery”. Amen to that.
Are we capable? Do we have the economic and political will. (We haven’t had the will to fasten some serious regulation back on the banks—nor have we had the courage to talk seriously about effective health care reform.) Do we even still have the wherewithal?
Newsweek published a thought provoking—and even scary—paragraph toward the end of its article on recession and recovery. “To a large degree, the U.S. economy must now cope with an era of lower expectations. …”
After going into considerable detail about what road building, green technology and universal broad band WON’T do for us—at least not any time soon, Newsweek adds, “The recession may be over, but there’s likely to be plenty of tough slogging ahead.”
Interesting terminology. One can almost get an image of Bill Maudlin’s “Willie and Joe”, crouched down in a foxhole somewhere in Europe, muttering, “Tell me about it.”
It’s all over, fella’s. Except for a few pesky chaps who keep on shooting at us.