Will the economy improve in 2009?
by Wayne Garcia
USA Today cheerfully thinks it will. Three days before Christmas, it wrote, "It may come as a surprise, given all the bad news of late, but the U.S. economy is expected to emerge from the recession sometime around mid-2009."
That's the rosy scenario. More and more, however, dire predictions are surfacing.
John Cassidy wrote in Portfolio online on Nov. 11: "Having buried their heads firmly in the sand for much of the past year, most professional economic forecasters are now predicting a moderate recession that will last until the middle of 2009 -- a consensus that could well prove as overly optimistic as the previous one, in which the U.S. was expected to avoid recession altogether. Even allowing for another significant stimulus package sometime in the spring, consumer spending, business investment and exports all seem set to fall throughout most of next year, which would rule out any meaningful recovery."
Sheila Bair, the chairwoman of the FDIC, wrote in Fortune: "We need to return to the culture of thrift that my mother and her generation learned the hard way through years of hardship and deprivation."
("Years of hardship and deprivation?" We were freaking out last week when we thought we might lose Comedy Central and MTV from our cable lineups because of a contract dispute.)
Meredith Whitney, an Oppenheimer analyst who predicted the banking problems, also wrote in Fortune: "I think the overall economy will be worse than people expect. The biggest issue will be consumer spending. If 2008 was characterized by the market impacting the economy, then 2009 will be about the economy impacting the market. It's already started."
How does the public feel about it? According to a Rasmussen poll released on New Year's Eve. Only 10 percent believe the economy is getting better; 68 percent say it is getting worse.
Happy new year.
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