She’s Nobody’s Fool

Almost every important economic indicator was either negative or less positive in April. In addition, Q1 GDP came in at a disappointing 1.8%. This resulted in numerous articles declaring the recovery over with disastrous consequences ahead. So what is going on? How much trouble are we in?

Due to the damaged financial system, the housing market collapse, the restructuring of the employment markets and all the problems created during the Great Recession, this recovery is expected to be slower, weaker, and uneven. When the economy stabilized, it started going through “normal” cycles, but at a lower growth rate. The economy now is still cycling, but is moving upward at a slow pace. A strong recovery is able to cast off obstacles the same way Arnold Schwarzenegger is able to cast off women …, sorry I mean cast off attackers in the movies. A weak economy gets diverted by any bumps in the road.

And 2011 has been full of obstacles. The first was (and still is) unusually bad weather. There was very cold weather in the South, ice storms and flooding in the Midwest and huge snowstorms in the East. This weather caused major business disruptions in a wide swath of the nation. This nasty weather has continued into the spring. Tornados and rainstorms are battering the country and hurricane season is just starting. A robust economy absorbs this hit. A strong recovery puts on a jacket and barrels through. But a weak recovery catches a cold.

The next obstacle is the unrest in the Middle East. One of the consequences of our mass mediated news coverage is that we tend to forget the recent past very quickly. Beginning in February, everyone was very worried as protests and revolts started in several nations. We were already fighting two wars, briefly involved in a third and hoping World War Three wasn’t beginning. (On a side note, it is interesting that the “fake” end of the world received extensive media coverage while a potential “real” end of the world, the initial uprising in Saudi Arabia, received relatively minor coverage). Once again, a strong recovery gets past this, but a weak economy gets the shakes.

Of course the Middle East situation caused crude oil prices to spike. Most of this was speculation. You know this because most crude production was briefly affected in Libya (the rebels plan to restart production in their fields soon). Once Moammar and the rebels figured out how to milk the cow and keep fighting each other at the same time, things stabilized. The speculators are keeping the price high because there is still considerable unrest in the region. You can’t really blame them for trying. If the Saudis get overthrown, crude would shoot to over $200/barrel and retail prices would go to $10 a gallon, or the end of the world as we know it.

Higher gas prices are a tough obstacle for any economy and a big problem for this one. High gas prices act just like a tax on disposable income and really hurt lower-income people.

So what is this economy like? It’s sensitive, it’s cautious, it’s mysterious. It can be strong, it can be weak, and without warning it can be anything in between. That’s correct, this economy is a woman! This observation should be viewed as purely descriptive and is not derogatory or sexist in any way.

(Cue Billy Joel)

She can kill with a smile
She can wound with her eyes
She can ruin your faith with her casual lies
And she only reveals what she wants you to see
She hides like a child,
But she's always a woman to me

She can lead you to love
She can take you or leave you
She can ask for the truth
But she'll never believe you
And she'll take what you give her, as long as it's free
Yeah, she steals like a thief
But she's always a woman to me

You see this economy has been hurt very deeply by all the turmoil of the last few years. She has been lied to. She has been deceived. Her trust has been broken. She has been betrayed. She feels like we have been insensitive to her needs, she feels violated.

She is not really moved by some short-term, artificial, stimulus. She wants a real, long-term commitment. This relationship can be restored, but it will take time. She wants to take it slow and cautiously. She wants it to be deep, meaningful and long-lasting.

And she'll promise you more
Than the Garden of Eden
Then she'll carelessly cut you
And laugh while you're bleedin'
But she'll bring out the best
And the worst you can be
Blame it all on yourself
Cause she's always a woman to me

She is frequently kind
And she's suddenly cruel
She can do as she pleases
She's nobody's fool
And she can't be convicted
She's earned her degree
And the most she will do
Is throw shadows at you
But she's always a woman to me

We want to tell her that we really didn’t mean anything by it. That we wish that it never happened. That we need to get beyond this and just get back to the way things were before. And we promise that it will never, ever, happen again. We’re sorry baby, we are so very, very, sorry.

So what do we need to get this recovery (or to heal this relationship) to get going again? First, we need for the Middle East to stabilize. We are leaning on Khadafy like Chicago thugs (wonder where that idea came from?) and I actually think that it’s going to work. Second, we need the weather to get back to normal. Third, as the Middle East calms down, so will the speculators demand for crude oil futures. And finally, some Barry White music couldn’t hurt.

She's Always A Woman - Billy Joel

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