I am endlessly asked about the current economic
situation. So, despite the fact that I may well be on the record for
being wrong, (it has happened several times before) I still make
judgments, declarations and try to learn from being on the public
record as wrong. Being publicly wrong hones the mind when one is willing to
admit 'I'm wrong'. Most people keep their minds deliberately dull by
never facing their own error or even worse, their own mortality.
I believe we reached the bottom of this recession sometime in mid-February. The recession will not be as severe as the 1980-82 recession.
What does that mean? First it says nothing about unemployment which will continue to grow for the rest of the year and may not start shrinking until 2010. Largely because we are doing nothing to get people to move to where the jobs are and we have a large backlog of productivity gains that mean fewer workers are needed in the high growth fields.
Second, the total economic output, GDP will start growing after the summer, third quarter.
Third, we will start seeing evidence of growth in many high tech parts of the country this month.
Lastly, my projection says nothing about the financial issues, which may evaporate very quickly as the pervasive underlying power of the U.S. economy becomes more evident.
All this despite the stimulus and despite the bank bailout.