It's finally official: "we're in a recession." Whew, somebody said it.
And then...what the heck?
"And we've been in it for a year?"
That last part was not a surprise if you live in Michigan where the economy never left the 2001 recession. But if you live elsewhere and believe the TV news, you may have been blindsided to hear that the darned thing began in late 2007.
Anybody feeling some outrage? Even if you worked to keep your own house in order since 2001, some high rollers decided to put the entire system in jeopardy with an ethics holiday. These are the guys who hid toxic assets in seemingly good investments, like so many boogers in library books. Or was it more like burying leaky barrels of nuclear waste under a national park?
According to consumer confidence figures, the U.S. economy was in recession in March, although experts hadn't officially proclaimed it. Consumer confidence is a leading indicator, so if you had been paying attention, you probably had a hunch the darned thing started late in 2007.
Now prescient consumers (even those who still have jobs) are not spending on anything except essentials. In our consumer driven economy this perpetuates the constriction. But consumers are left little choice as credit remains frozen.
The most prudent among us will function on a cash basis like depression era fuddy duddies -- radically spending less than they earn. When things improve, these folks will still function on a cash a basis.
Don't blame them for a slow recovery next year. Thank them for having the sense to remain solvent. Hurl your outrage at legislators and regulators in Washington and in state governments who refused to regulate the criminal fraud that created the housing bubble and the derivatives bubble. Please, have some outrage. You'll find it much more satisfying than fear.
