Friday, January 23, 2009

We're all gonna die! (part IV)

Consumer and business sentiment is really lousy right now.  Here are a few quotes from a Time magazine story on the recession:

"...why are Americans so gloomy, fearful and even panicked about the current economic slump?

..The slump is the longest, if not the deepest, since the Great Depression. Traumatized by layoffs that have cost more than 1.2 million jobs during the slump, U.S. consumers have fallen into their deepest funk in years. "Never in my adult life have I heard more deep- seated feelings of concern," says Howard Allen, retired chairman of Southern California Edison. "Many, many business leaders share this lack of confidence and recognize that we are in real economic trouble." Says University of Michigan economist Paul McCracken: "This is more than just a recession in the conventional sense. What has happened has put the fear of God into people."

...U.S. consumers seem suddenly disillusioned with the American Dream of rising prosperity even as capitalism and democracy have consigned the Soviet Union to history's trash heap. "I'm worried if my kids can earn a decent living and buy a house," says Tony Lentini, vice president of public affairs for Mitchell Energy in Houston. "I wonder if this will be the first generation that didn't do better than their parents. There's a genuine feeling that the country has gotten way off track, and neither political party has any answers. Americans don't see any solutions."

...The deeper tremors emanate from the kind of change that occurs only once every few decades. America is going through a historic transition from the heedless borrow-and-spend society of the 1980s to one that stresses savings and investment."

 Oh, by the way, this was from a story in Time about the recession in 1991.  You remember that one, don't you?  It was also the recession right before the longest post-war expansion in American history.

We always get over-optimistic when things are going well, and we always get over-pessimistic when things are going poorly.  The American way of life is not about to end.  We are not in the second Great Depression. We are in the midst of a bad economic downturn.  It will end.

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