Economics by the Dashboard Light
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Last Friday night, for the first time since mid-2008, my drive to work at around 11 p.m. was interrupted by a car carrier blocking the right hand lane of northbound Route 1 outside that Nissan dealership in Drexel Hill, PA.
The last two years have been economically difficult. I'm lucky to be in a fairly safe job, but I've been distressed to see multiple job losses in my flist. Unemployment is still around 9.5 percent, and last week US stock markets took to bed with a case of the vapors when non-farm payrolls rose less than expected and the Fed mused that we might need another round of quantitative easing. There are other reasons for worry: banks and private companies are sitting on hoards of cash, the banks afraid to lend, and the companies afraid to expand or add workforce. Individuals are still buying bonds (almost surely a terrible time to do that, with coupon rates at historic lows) and terrified to re-enter the stock market.
Taking the other side of the argument is the nighttime Nissan car carrier.
The National Bureau of Economic Research has not yet declared the current recession, starting in December 2007, to be over. The NBER is late about such things, and its findings are historical, not predictive.
I'm betting the car carrier knows something. I declare the recession to have bottomed, and the nation, and the world, to be on the economic upswing. I don't know how strong this recovery will be, or how long it will last. We had multiple recoveries in the 1970s which went nowhere, undercut by inflation, high taxes, oil price shocks, and global political instability. It could happen again. But at least for the moment, the economic plane has gained airspeed again.