We’ve been hearing some positive economic news lately. New-home sales jumped 11 percent in June. The Dow managed to top 9,000, and Goldman Sachs reported $3.44 billion in second quarter earnings earlier this month. Larry Summers, top economic advisor for President Obama, said the economy is “back from the abyss” in a July 17 Forbes article.According to a July 20 Bloomberg report, the index of U.S. leading economic indicators rose in June “reinforcing signs the economy may be emerging from the worst recession in five decades.” James O’Sullivan, a senior economist from UBS Securities LLC in Stamford, Conn., predicted in the article that the recession will end in the third quarter. “We’re moving in the right direction,” he said. And the results of a recent National Association for Business Economics shows the economy recovering, albeit slowly, during the last half of this year, according to a July 20 article from MarketWatch.
But just as I start to take a nice long sigh of relief, I start to hear the strong, scary and convincing words of warning from folks who are not so optimistic about the economic recovery.
Paul Krugman, for one, the Nobel Prize-winning economist and columnist for the New York Times, queried in his July 12 column whether America was becoming a “boiled frog,” lingering in increasingly hot water, unaware of the fact that it will soon be boiled alive. “Now that the free fall is over, all sense of urgency seems to have vanished,” he said. Krugman predicts a painful jobless recovery, with unemployment rates staying high through the end of 2010, and with many unemployed losing their savings and homes.
Many in the glass industry also are unsure about the economy’s recovery. In a July 7 e-glass poll, only 20 percent of respondents said the economy had bottomed out.
So, where does that leave us? Will Wall Street recover in the near future, while Main Street continues to trudge through a recession into 2010? Could things on both streets just keep getting worse? Or are we all actually rising from the economic abyss? What’s your take?
--By Katy Devlin, commercial glass & metals editor
2 comments:
A recovery on Wall Street does not a make a recovery for the economy. The new wave of foreclosures that is about to start due to high unemployment will soon be with us. The cushion most of us set aside for rainy days will not last long and the jobs that are needed to stop the bleeding will not arrive in time.
This is a great post Dmitry. I just had one of the ‘Doh!’ moments and ran back to correct my own site before publishing my comment. You see my own comment form did not match what I’m about to advise. I get less comments than you, so never noticed any problem. I’ve changed it now anyway so here goes.
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