If you’re old enough to remember the TV show “Hee Haw”, you’ve been through a couple pretty big recessions in your life. There was a recurring skit on the show where four hillbillies surrounded by moonshine jugs would recount tales of woe, accompanied by a song:
“Gloom, despair, and agony on me; deep, dark depression, excessive misery! If it weren’t for bad luck, I’d have no luck at all; gloom, despair, and agony on me!!
I thought of that old tune yesterday while glancing through the morning news items. Everywhere I looked I got another dose of gloom about the economy, with predictions that we’re headed for the feared “double-dip” – a recession where the economy takes a nose-dive, comes back up a bit, and then takes another big nose-dive.
The National Bureau of Economic Research officially decides whether the economy is expanding or contracting, and the NBER, despite urging from a number of politicians and public officials will not say the recession is over. Nor will the NBER predict a double-dip, but that doesn’t stop the pundits from doing it.
Near as I can tell, the tea leaves some of the financial pundits are reading concern housing, employment, the bond market, and a few other intangibles.
Housing is still way, way down. You don’t need to know that last week’s official housing numbers were horrible, with a steep drop in new home sales. If you have anybody in your family or in your neighborhood who works in the building trades, you know housing isn’t “back” yet.
Unemployment is still very high, and “under-employment” is rampant. Everyone interprets the weekly unemployment reports differently, it seems, but Monday Vice President Biden said there’s no possibility to restore 8 million jobs lost since the beginning of the recession, a remark easily interpreted as gloom and doom.
Another sign of the world economic climate came last weekend at the G-20 meeting, where most of the policymakers disagreed with President Obama about more stimulus spending, and said now is the time to cut spending and pay down debt, rather than launch more new programs and create more debt.
The bond market’s not exactly roses: the yield on the 20-year Treasury hit its lowest levels since 1962 last week.
All these things lead some of the economic tea-leaf-readers to predict that dire times are ahead.
I’m no economist, and while my native tendencies run more toward pessimism than optimism, I’d prefer to believe that the worst is behind us, but the road to recovery will be long and twisting, and it’s going to take a while to get to whatever the “new normal” is.