It's official. We've been in a recession since December... of last year. 12 months already. CNN reports that most US recessions last 8-10 months, and global recessions average 16-18 months. Obviously we're in a global recession, which means somewhere around another 8-12 months, if history is any indication. The tangible impact of a recession are clear; layoffs, unemployment rises, downturn in spending, failed businesses, etc.
Now I'm no economic expert, don't play one on TV and I didn't stay at a Holiday Inn Express last night, but I have to ask, what additional deep damage has our federal government done by heralding the coming catastrophic financial, banking and credit crisis. By getting on TV and announcing we're facing a dire financial situation, Henry Paulson and George Bush perform the equivalent of yelling fire in a crowed theater while not owning a shred of fire fighting equipment.
Just as tangible as the impact of job losses are, economies are just as much about how we perceive them - we often describe this as "confidence in the market". If we believe the markets are going to be in the tank, they will be. It's a self fulfilling prophesy. The reverse is true when we're bullish about the economy - somehow we make our predictions come true. I believe Bush and Paulson have done us all a huge, huge disservice, making things even worse by all their aimless handwaving of warnings and non-specific dark cloud predictions.
The best things Bush and Paulson can do for the economy is to:
- stop talking
- stop appearing on TV
- focus on transitioning to the Obama administration