U.S. Economy: A car wreck in slow motion

By Wesley Fryer On July 5, 2009 · · Add Comment

I really enjoyed the opportunity to catch up with fellow USAFA-alum and debate team mentor Tim Kane this weekend, who contributes to the Growthology economics blog for the Kauffman Foundation. In his latest post, “Jobs Update: Unhappy Times are Here Again,” Tim synthesizes recent unemployment statistics for the U.S. by noting:

What this means is that (1) it is now the worst postwar NBER recession in terms of increasing unemployment rate but (2) not quite the worst in terms of the rate defined by the time series trough, barely. If initial jobless claims continue to come in over 400,000 per week, I would not be surprised at all by another half-point jump in July to a rate over 10 percent.

In our conversations yesterday about the economy, Tim described what we are living through economically as a car wreck in progress, in slow motion.

I think this is a good metaphor. We read headlines with pundits saying the worst is over, things are about to rebound, despite employment numbers things are getting better, but I’m doubtful we’re out of the woods. The factors which led our economy to our present recession were not created overnight, and a “resolution” to this crisis is not going to come fast either. Personal debt is clearly a huge factor, and individuals are not going to dig themselves out of the consumer debt pits which have helped fuel consumer sales in the past decade anytime soon. In his metaphor of an economic car crash in slow motion, Tim noted that cars are still colliding, the wreck is still happening, and we’re living in the midst of it like an observer watching in slow motion. This makes me think of a matrix-style slow motion collision scene.

Our economic hard times are not over, and it seems doubtful we’ve even turned the corner on the recession. After just finishing reading “The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl” this week, I’m certainly thankful to not be living in the Oklahoma panhandle in the 1930s. Our economic plight today is a far cry from those dark days. I don’t think we’ve turned the corner toward real recovery, however.

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