A Recovery Just Right

What will it take to have a healthy recovery in the US from the recent Great Recession? We can use this illustration, provided by the Wall Street Journal, to guide our thinking.

Red bars are fast rising statistics. Blue bars represent quickly falling indicators. And green, indicates factors of modest change.


As with the story of the three bears, we would like to see things in the US economy turn out just right. Let's see what that will take.


In order to obtain a just right result, we need continued growth in the US Gross Domestic Product (GDP). It has been doing well in the last couple of quarters.

We are statistically out of a recession, although it has yet to be officially declared. And pay no attention to the populist & political commentaries about jobs. That's a problem, but it is primarily GDP growth that defines recession & recovery, and NOT jobs growth or lack thereof.

Dare we hope for a rapidly rising GDP? According to the International Monetary Fund (IMF), the future looks pretty bright for world economic growth. The IMF forecasts of a resumption of 4-5% positive growth in the world economy starting in 2011 and continuing through 2014.


Fed Chairman Ben Bernanke would then move to increase interest rates, as he says he is prepared to do--but not until he sees a solid signal that unemployment is declining. Until then, with inflation being very low, he feels he can afford to keep interest rates very low for a while.

This will lead to stabilization in the US dollar--gold bugs will get killed with their speculative holdings--and we'll see onward growth in the stock market.

That's just about right--and we'll feel really good when we see that stubborn 10% unemployment rate come down, perhaps reaching the 5% level which we enjoyed just three years ago when the US economy was coming along pretty fine.

I'm Afraid of Heights

Earlier this week, the tallest man-made structure ever erected, the Burj Khalifa, formerly known as Burj Dubai, was opened in Dubai, United Arab Emirates, hovering at 2,717 feet, or just a wee bit taller than the ziggurat of Babel, of Old Testament lore, which some say rose to 60 feet above its Babylonian bed.


If you have but $1.5 billion, you might construct one yourself! The completion of the tower coincided with a worldwide economic slump and overbuilding, causing it to be described as the latest ... in [a] string of monuments to architectural vacancy.

Time will tell, however, I can guarantee I'll never be found up in a building that tall. It's probably safe, but I wouldn't feel secure.

Yellow Rose of Texas

A friend told me I forgot one flag in my reader tribute article last week. When I saw what he meant, I burst out laughing. Yes, Phil, while I did recognize many visitors from foreign nations from within the Americas, such as Brazil, I did forget Texas!!


I know it's the place of your pride & joy. I know my friend, Cliff, from Austin, regularly reads my articles.

Everyone should know I support the University of Texas, as they pursue the NCAA national football championship title, when they meet up with Alabama this coming Thursday.

Now nothing against the Crimson Tide, but I'm from the Big 12, and the Nebraska Cornhuskers' #1 fan. No, we couldn't defeat Texas in the Big 12 championship game last month, but save for the very last second, the Huskers had that game won!

Now if Texas but scores at least four points against Alabama, the Big Red will capture the #1 standing as best college defense (based on total points allowed), overtaking Alabama--and we look forward to the Huskers being back in the spotlight for a national championship bid next season.

We have five titles: 1970 & 1971, when I attended both at the Orange Bowl in Miami, being a sousaphone player in the Nebraska Cornhusker Marching Band. Titles were also captured in 1994, 1995 and 1997.

Our 1971 title came after defeating Bear Bryant's Alabama Crimson Tide, 38-6. Our conference, then the Big 8, was so dominant in college football that season, that the AP rankings ended with Nebraska #1, arch-rival Oklahoma Sooners #2 and the Colorado Buffaloes #3.

In a humble bit of trivia, your little tuba player's picture was captured within the pages of this Sports Illustrated issue.


Recently, blogger Mark Perry, professor of economics & finance at the University of Michigan, who hosts the outstanding Carpe Diem web site, compared the economic output of all 50 states to various countries around the globe.

Based on 2006 US Gross Domestic Product (GDP) output of $14 trillion, he illustrated via map just how sizable & blessed we are. (Click if you wish to enlarge.)


Notice, Phil, that Texas matches up well with the nation of Brazil. So I believe I must apologize for my slight of your great state!

Perhaps I can make it up to you, by featuring the beauties of Texas in your state song, The Yellow Rose of Texas.

A Salute to My Readers--Part II

When I started blogging, I thought I might publish 2-4 articles per month. Well, it didn't turn out that way! I have more than enough material to share with you twice a week.

Most of my attention is devoted to matters of economic interest, primarily macro-economic (eg, big scale) topics in the United States. I often write to provide perspective--and sometimes with a retrospective point of view, because the news is coming at us so quickly these days.

I have always attempted to write with clarity. I have received feedback from several readers (eg, thanks, Cliff!) for your supportive comments about my writing style. This enables you to learn a lot about economics, even though as I earned & learned from one of my degrees in college, economics was sometimes (often? Ha) dull, boring and maybe confusing to many.

I also seek to write from different points of view, sometimes not trying to "take sides" in a debate on a topic, economic or otherwise, in order to give you some diversity of thought so you might be better positioned to make up your own mind.

On occasion, you will find my articles nested into a series with one building on the next to help you explore the subject in depth, without being overwhelmed by the information all at once.

A few times during the year I will break away from the economic scene to share some other idea, perhaps in the motivational or behavioral sciences realm.

In a sense, my blog can serve as a very valuable encyclopedia of thought...a sort of reference which you can search using the search engine in the upper left hand portion of the web page, or by browsing through my collective index, in date order, along the lower right hand sidebar.

Now lets continue my tribute to readers over the past year, with a focus on the flags from the Americas, and from some Caribbean island nations.

Thanks for visiting from Argentina.


Next, listen to inspirational march anthem from Brazil.



I was happy to receive blog visitors from Costa Rica.


And from and the Dominican Republic, too.


And we cannot leave out thanking visitors from Jamaica.


To the south of me, I appreciate visitors from Mexico. And, Lorena Ochoa is one of my favorite golfers!



To my immediate north (I live in Wisconsin) are all the lovely provinces of Canada. You gotta love the Maple Leaf, eh?


Finally, thanks for the majority of my readers, who hail for the great United States. Thanks to you...and to everyone around the world...for your faithful following.