The news that the current recession the United States is in actually started in 2007 was bitter-sweet. On the sweet side, it alleviated some people's fears that this debacle was barely starting, and that this would be a storm that would linger well into next year. It gave some investors hope, and so they, with that hope as currency, bought stocks thinking they were getting a bargain now, and sunnier skies later. The bitter side, however, overrides any of the sweet aftertaste.
The recession is already 12 months-long and with no sign it will end soon. If it continues into, at the very least, the first and second quarter of 2009, as many predict it will, it will have been the longest recession ever. The longest recession after our current one is the pair of ebbs the economy weathered in the late 70's, early 80's., which were 16 months-long. Come April, we will be making history.
The government reported a 6.7% jobless rate today, after over 500,000 jobs were shred in the month of November, increasing the Sept-Oct-Nov job deficit to over 1.9 million, and taking our underemployment rate (where people who want to work full-time can only find part-time work) from October 8% to November's 12.5%. We are gonna party like its 1929.
With great crisis come great opportunities. Obama's team are wringing their hands, thinking of ways to use the $500 billion (or more) stimulus package they plan to send Congress as soon as they warm up their White House desks. One of the most praised proposals is to use nearly half of it on infrastructure, such as highway renovation, electric grid refinement, and water system upgrades, among others. This would effectively create 2 milion federally financed jobs.
Obama is also focusing on using some of that money on propping up a currently private-sector industry: green energy. Either ethanol, biodisel, wind, solar, or new-kle-ur, an investment in sustainable energy will again kill (or revive, in this case) two birds with one stone: create federally financed jobs, and promote long-term economic stability. There's a reason why Obama is being compared to FDR in magazine covers, pundit's columns, and in the minds of beleaguered Americans uncertain about their futures. Obama may be from the land of Lincoln, but he is standing on Franklin's turf.
Most economists will minize the importance of a president's proposals in time of economic crisis. Directly, they do little to influence the health of the economy. Most will admit, however, that what a president does, or doesn't do, can help it recover or send it to the emergency room later on. Clinton knew not to meddle with a good thing; Bush was not so wise. Obama will now have to face a situation that pits him against a momentous decline with few tools to fix it.
If Obama wants to make his mark, next to Lincoln, FDR, and Reagan, he has an opportunity. He has been given a crisis, and with that crisis he can become great rather than good enough.
lhp
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