Tuesday, January 5, 2010
Executive Summary
- This is not a normal recession, and it will not follow predictable patterns.
- Tax data does not support the assertion that consumer spending has essentially remained unchanged.
- Housing market recovery is being delayed by government programs.
- Households and small businesses are shedding debt, and big businesses are only adding a little, leaving government responsible for most of the new debt.
- We need to become serious about our real needs and stop frittering away time and capital.
I am going to be peering ahead with my views for 2010 and beyond in a multi-part series, beginning with the big picture before moving into individual ideas and suggestions.
Let’s start by pondering a bullish set of views gleaned from the news:
Wall Street closes 2009 with “an expectancy of better times in the air.” While not predicting immediate return to prosperity, general mood was the most optimistic since midyear slump dashed hopes of early business revival. General belief that “factors of long-range bullish import” are steadily increasing, while vast bulk of necessary deflation has been accomplished.
While the past year was painful, the pain won’t necessarily end with the year. However, there’s good reason to believe the country is in a better position than it was a year ago. The past year has rid the country of illusions, including the theory shortly after the crash that the US had invented the “harmless panic.” It has produced a new realism, where business projects must be sound to proceed.
The year has also provided an “incalculable amount of ultimate benefit” in eliminating the many “weak spots” that an economic boom always produces. Institutions that “withstood the extraordinary strains of 2009” should be well positioned for the tests of 2010; common sense and experience suggests these will be less severe. Consumption has outpaced production for months; “effective demand for expanded mill and factory production cannot logically lag far behind.”
Truth be told, these quotes were gleaned from newspapers published on December 31, 1930. The only things I changed were the dates, to make my point that these quotes could have been written last week.
Nothing ever really changes, and hope springs eternal. To read the above quotes in their original form, just replace every “2009” with “1930” and every “2010” with “1931.”
I got those quotes from a wonderful website that posts the news from the 1930’s, called, appropriately
by guardia 
