Are Happy Times Here Again?

Seth Ackerman sia at nyc.rr.com
Fri Mar 8 13:49:05 PST 2002


Doug Henwood wrote:


> Max Sawicky wrote:
>
> >Quite possible. The latest unemployment numbers, in and of themselves,
> >suggest the recession is over. -- mbs
>
> You could argue that it ended late last year even - lots of things
> reached their extremes then, and have been trending higher since.

Look, I understand that the monthly data is trending higher. I understand that 4th quarter GDP was significantly positive. I also understand the desire to avoid catastrophism. But do you really mean that an "expansion has begun" in the conventional sense? From 1945-1991, the average "expansion" lasted 50 months. Do you really think it's feasible that there will now be over four years of unbroken expansion? If GDP growth averages 3.1 percent (not exactly blazing) through 2006, the current account deficit will reach 6.5% of GDP! The private sector financial deficit will reach 8% percent of GDP! These numbers just don't happen in the normal course of economic events.

Seth



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