“Don’t count your recoveries before they’re hatched.”
So says Paul Krugman, who agrees with our assessment of the economy. As we noted a few weeks ago, its not getting better, its only getting worse more slowly.
And the same damn fools who missed the oncoming freight train in the first place are now busy declaring its all clear. They were wrong before and they are wrong now.
Krugman:
Even when it’s over, it won’t be over. The 2001 recession officially lasted only eight months, ending in November of that year. But unemployment kept rising for another year and a half. The same thing happened after the 1990-91 recession. And there’s every reason to believe that it will happen this time too. Don’t be surprised if unemployment keeps rising right through 2010.
Why? “V-shaped” recoveries, in which employment comes roaring back, take place only when there’s a lot of pent-up demand. In 1982, for example, housing was crushed by high interest rates, so when the Fed eased up, home sales surged. That’s not what’s going on this time: today, the economy is depressed, loosely speaking, because we ran up too much debt and built too many shopping malls, and nobody is in the mood for a new burst of spending.
Employment will eventually recover — it always does. But it probably won’t happen fast.
Ever notice how poorly Human Beings conceptualize time? The idea that events occur slowly, take patience, prudence, and above all the slow elapsing of the calendar seems to be beyond many people’s ability to comprehend. It makes me understand why some folks want to believe *all of this* is only 5,000 years old — they can wrap their heads around that number.
V-shaped recovery? Ha! Long lived the “L” . . . .
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Previously:
Getting Worse More Slowly (April 8, 2009)
http://www.ritholtz.com/blog/2009/04/misunderstanding-positive-data/
Bear Market Rally ? (April 12, 2009)
http://www.ritholtz.com/blog/2009/04/bear-market-rally-4/
Source:
Green Shoots and Glimmers
Paul Krugman
NYT, April 17, 2009
http://www.nytimes.com/2009/04/17/opinion/17krugman.html
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