A question has been on the minds of American citizens for quite some time now. Since the beginning of the end back in September of 2008, Americans have had one burning query in the forefront of their collective consciousness: when will it all end? Some pundits are saying that the long wait is over and that we as a country can return to “business as usual.” Others say that this is only the beginning. The reality though, seems to reside somewhere in between.
In some ways, it’s easy to point to a few indicators and say that “the recession” is over. According to one article in Newsweek, as of July 25, 2009, the stock market had “rallied 44 percent since March,” and that “the economy is growing at a 2.5 percent annual rate in the current quarter.” Recession over right? Well, no not exactly.
The general consensus of many Wall Street gurus seems to be that while the recession has yet to end, at the very least it’s slowed down. David Wessel, the economics editor of the Wall Street Journal states that “The stock market is now as high as it's been any time this year. But neither the economy or the financial system is anywhere near what we might consider normal.”
He goes on to say that while the economy is growing “painfully slowly,” spending habits of consumers have drastically changed, with people choosing to burn money much more carefully. In a capitalist society founded on the consumer spending as much as possible, it becomes difficult for the economy to grow quickly when no one is spending money. This then raises another difficult question—is the definition of “business of normal” ever going to be the same?
The harsh reality is that if and when the American economy completely stabilizes, “business as normal” is going to take on a whole new meaning. Wall Street will be more harshly regulated by the federal government than ever before. On Wall Street itself there will be fewer firms that, according to Wessel, “will be required to hold more capital, borrow less money, and make less money than they did before.” The very structure our economy is based on will have to radically be shifted in order for the ship to be completely righted. Such a process will certainly not be an overnight fix, rather a slow process that many say will take anywhere from five to ten years, if not more.
Pundits can point to the improving stock market and annual growing rates of our economy and try to wash their hands of this unholy mess that’s struck the global economy in the last year. To do so though, would be wildly irresponsible. The unemployment rate in this country still stands at 9.5% while domestic jobs are moving overseas to cheaper labor. The national debt stands at a whopping $11.77 trillion and is growing as we speak.
Newsweek states that the only way for us to even begin to climb out of this hole is for “the economy to start growing at a pace that creates jobs, boosts incomes, and raises corporate profits—all without triggering inflation," something much easier said than done. In short, the recession is improving, but it's certainly not over. Now we have to pick up the pieces and deal with the long term affects of the collapse of the housing market along with debt, and unemployment; needless to say this is a tall order. Be ready to hunker down, because while the hurricane may have ended, we’re still trapped in the storm.
