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Recession Over? You Gotta Be Kidding!

11/24/2009 05:12 am 05:12:01 | Updated May 25, 2011

We can all learn from our predecessors, no matter how smart we think we are. Ditto Barack Obama, who enthusiastically declared in a recent national TV address that "the bleeding has stopped."

Too bad, though, he didn't meet any can ladies (a new business breed) when he came to the Big Apple recently to address the United Nations. He might have enlarged his economic perspective.

The president is hardly alone in claiming that things are now stable, although some significant economic facts of life and numerous skeptics suggest such cheerful tidings should be taken with a heavy grain of salt.

The skepticism of the President's economic assertion conjured up a memorable observation from one of Obama's predecessors, Abraham Lincoln, that I've touched on in my past writings. Lincoln's observation: "Tis better to be thought a fool than to speak and remove all doubt."

I was reminded of Lincoln's comment as a result of an incident that occurred the other day, one that comes on the heels of one of my recent HuffPost pieces. In it, I commented on one of the unfortunate consequences of the economic turmoil in New York City -- namely the demeaning practice of growing numbers of unemployed workers to raise money by rummaging through various garbage disposal areas in search of used soda cans that they could sell to local supermarkets at five cents a can. They're known as can men.

Lo and behold, the hunt for such cans is now turning into a family affair. In recent days, for example, I spotted several women in their 40s and 50s crossing busy Manhattan streets, rolling shopping carts loaded with used soda cans and heading to the supermarkets. They're called can ladies.

Managers at Food Emporium and Gristede's, two of the city's largest food chains, both tell me the number of can ladies coming into their stores is sharply on the rise. Some, in fact, using cell phones to alert each other to garbage locations where cans be found, work in teams.

This money-raising effort would seem to raise genuine questions about Obama's declaration that the bleeding has stopped. So, too, would other noteworthy developments. Chief among them:

  • Unemployment, now at 9.7% (15.1 million jobless workers), is widely expected to continue to rise through the first half of 2010. Likewise we all know aging baby boomers who have lost their jobs, many of whom will likely never work again.
  • The argument that housing has hit bottom is becoming increasingly suspect, what with the unsold inventory on the market (about four million homes) projected in some quarters to climb to at least 11 million.
  • Expectations of mounting losses at the nation's banks, which remain reluctant to lend. The International Monetary Fund pegs additional losses here of about2.7 trillion.
  • Severe financial damage to consumers, who have seen the financial chaos wipe out 13 trillion of home and stock values. Accordingly, they're spending less and saving more.

Meanwhile, some skeptics, taking sharp issue with the happy talk from the White House and Ben Bernanke, ridicule the notion that the recession is history. One is Nobel-winning economist Joseph Stiglitz, the former skipper of the World Bank and a professor at Columbia University.

Stiglitz recently reiterated his view that "we'll be lucky to get out of the recession by 2012." As the good professor sees it, you need GDP growth of 3% to create new jobs and that could be two to three years away.

The bottom line: If you really believe the recession is over, dream on.


Write Dan Dorfman at Dandordan@aol.com