Recession Ending?- Maybe- Maybe Not

In January when Ben Bernanke and Obama were talking about the worst recession since the Depression I made a few observations based on a historical review of economic downturns. I admitted my lack of professional economic qualifications and further admitted that my predictions were based on mostly anecdotal evidence. I have lived and worked through 6 or 7 economic downturns since I finished college and used that experience in writing my thoughts.

I wish I had taken notes during each of those experiences but my recollection is that certain basic events accompanied each of those recessions. Problems with housing construction, was involved in the start of each recession and a turnaround in home sales and construction was an indication of better days coming. This was the case in each of the slowdown periods in my working career.

The recent announcements that there are improvements in new home figures is certainly encouraging but I’m not yet ecstatic over the possibility that good times are around the corner. The government involvement with massive contributions to the nation’s debt structure cannot be a good thing and my anecdotal evidence does not have such government excess as part of my personal experience.

There are certain facts that need to be studied and understood. The first one is that any recovery that might be taking place is not the result of the government stimulus activity. There has only been 8% of the stimulus allocations spent to this point. That 8% has been spent on politically beneficial activities that are not particularly economy stimulating. The jobless roles have been the greatest area of gains since the Obama economic stimulus plans have been unveiled.. We are at about 10% unemployed and growing each month. This is not an encouraging event.

At the start of this year I predicted that the summer would show signs of improvement in the economy. I further said that government and financial spokespersons would be heralding the light at the end of the tunnel that was getting brighter. This is happening and as a non-professional in economics my predictions were more accurate than many of those now heralding that light at tunnels end.

It seems to be somewhat beyond the realm of my expertise to find sense of the activities of this administration moving ahead. I think that there is little evidence of experience in Obama’s minions for developing a reasonable strategy for dealing with our current situation. We need to search for the lessons of history for guidance. The Obama crew has little concern for history other than that which they are intent on creating.

The lessons from the actions of the Roosevelt administrations in the 30’s indicate that current Statist moves of Obama and his troops may very likely prolong the slowdown rather than to help end it. In the 30’s the expanded government spending did not end the depression and the minor improvement in jobs during the early 30’s was lost in 1937 which was a recession in the depression. Think about the New Deal, which produced a Recession in a Depression before getting excited about the Bernanke announcement of the end being in sight.

With the expenditures, industry takeovers and Statist policy of Obama and his workers the end of that tunnel might well be, a new America, far different than the one that provided me and many generations of Americans with such great opportunity.

I entered my business career living in a country that was first in the world with unlimited possibilities for rewards to individuals that had ambition and worked hard. It looks like Obama is preparing me to be living in a third world country where hard work and ambition is not needed or wanted by the governing philosophy. It is a sad time, with 2010 as perhaps our final opportunity to start taking back the America that provided rewards for individual effort.

We need to start by replacing Nancy in 2010 and work from there towards finding sensible possibilities for 2012 to rebuild America as the land that provides opportunity with rewards for hard work and individual effort.