I've been through the desert on a horse with no name,
It felt good to be out of the rain.
In the desert you can remember your name,
'Cause there ain't no one for to give you no pain. (America)
I have previously stated that economists are having a difficult time explaining the current economic situation due to the unusual conditions that exist. In is interesting to note that economists and the government have underestimated the current downturn at almost every point in the process. If you go back and read some of the 2008 quotes of FED Chairman Ben Bernanke and former Treasury Secretary Henry Paulsen about the economic conditions at the time, you find the analyses faulty and the forecasts laughable.
This is not your father’s recession. Unfortunately the government has viewed this as a typical recession and has responded accordingly. Remember that the first economic stimulus program from the Bush administration. Talk about p***ing on a forest fire. Then the Obama administration follows that up with a stimulus package that is less about creating jobs as it is about solidifying and rewarding voting constituencies (never let a crisis go to waste). I really believe they expected the economy to recover regardless of how poor the stimulus package really was. Similarly, Cash for Clunkers and the housing tax credit programs were “gadget” plays to prop up these industries until the economy improved. It’s hope and change all right --- you keep stalling and you hope that things will change.
This downturn is more than just a recession. If it wasn’t, The Great Recession of 2008-2009 would have been followed by the Great Recovery of 2010 and we would all be partying to the music of Kool & the Gang right now. It is not a depression, because the economy did not drop far enough for that designation. Some economists have noted that this is not a depression because the unemployment rate during the Great Depression was 25%. I say be careful here. If you take the unemployment rate, add the underemployment (part-time wanting full time) rate, plus the people not counted because they have given up looking, you are up to over 20%. Obviously this is not as devastating as the 1930’s, but that was The “Great” Depression, not just any depression.
Our current situation has characteristics of both a recession and a depression (See excellent article “You Say Recession, I Say Depression”). So what do we call this thing? If you have lost your job or taken a pay cut during the last two years, you want to call this the **#**x!!!! Recession, but that doesn’t translate well in civilized discussion. So here are my suggestions:
The Great Repression
Psychologists define repression as excluding painful or disturbing memories from the conscious mind. You put uncomfortable thoughts in inaccessible areas of the mind. And what uncomfortable thoughts do we need to repress?
- That one major political party blindly led us into this mess and now the other major political party is pathetically attempting to blindly lead us out. Different clowns – same circus. Who do we vote for now?
- That CEOs of some major financial institutions were removed from their posts, but not before received receiving seven-figure bonus checks as a reward for their fine efforts. They now make difficult decisions about whether to order the quiche or the croissant before tennis at the club.
- That the government’s response to the banking crisis was a 2,300 page financial reform bill that somehow never got around to fixing many of the things that went wrong. The banks are bigger than ever – Too tremendously big to fail! The reform bill concentrated more on your credit card bills and bank fees. Darn, it was my credit card bill that caused this mess.
- That the current administration has enacted healthcare legislation that will increase business costs and possibly personal costs at a time when we can’t afford it. Introducing this burden and uncertainty into this weak, unstable, economic environment is sheer lunacy. Even if the new healthcare system works wonderfully (a very big “if”) down the road, it is not worth the damage that it is doing right now. Ditto for Cap and Trade.
The Great Redression
To redress is to set upright, restore, to make up for, to repay. As I have stated before, we are now paying for a credit, housing, and cheap import, binge that started around 1995. It is payback time and you know what they say about paybacks. I think this term is perfect.
After two days in the desert sun
My skin began to turn red
After three days in the desert fun
I was looking at a river bed
And the story it told of a river that flowed
Made me sad to think it was dead
You see I've been through the desert on a horse with no name
It felt good to be out of the rain
In the desert you can remember your name
'Cause there ain't no one for to give you no pain
Horse With No Name Video
Benny Hill Video that explains the title