Watch the TV, pick up the paper or flip on the radio for news these days and you're hearing how the economy has turned the corner and that we're now out of recession.
Maybe...but I'm reserving judgement for the time being.
A recession is defined as two consecutive quarters of negative growth, and while we're hearing that tepid growth returned to the economy in June, (0.1% being reported in the Globe and Mail) you'll pardon me for sticking with cheap beer instead of more expensive libations.
Why am I cynical about all the so called 'green shoots' being reported in the media and by government officials? Simple, because our economic prosperity hinges on the willingness of consumers to take on debt.
Car companies, appliance manufacturers...any business with products to sell, they desperately need consumers feeling optimistic. And media outlets hungry for advertising dollars have been hitting us with lots of feel good stories about the worst of the downturn being over. Canwest site canada.com had this story out today: What ever happened to the Great Recession?
We're reading how the banks and government officials are all signalling that a return to growth is imminent or already underway. Banks need people willing to borrow money, and with the U.S. heading into midterm elections, to say nothing of Canada's current political climate...elected officials on both sides of the border are eager to tell us what a great job they've been doing.
But then we have news out that the OECD is predicting that our unemployment rate in this country will be checking in around 10% next year. We haven't seen double digit unemployment in Canada for a long time, but still that means 90% of us are working. Making sure the 9 out of 10 still lucky enough to be in the work force are optimistic about future prospects has become the cause celebre of government, banks and big business. The consumer is king, and so we're being told that the garments representing our economy are brilliant and shiny...it sure beats telling us we're naked.
Even if someone has been forced into a lower paying position, and/or found it necessary to work two or three jobs to make ends meet...its important people feel that the good times will soon be rolling again. Otherwise consumers might forgo that home purchase, leveraging almost the entire purchase price thanks to record low interest rates. Elected representatives may find themselves hunting for a job if voters believe things aren't as rosy as we're being led to believe.
The Kool-Ade stand is open for business, but I'm going to wait another six months to see how well it settles.
Maybe...but I'm reserving judgement for the time being.
A recession is defined as two consecutive quarters of negative growth, and while we're hearing that tepid growth returned to the economy in June, (0.1% being reported in the Globe and Mail) you'll pardon me for sticking with cheap beer instead of more expensive libations.
Why am I cynical about all the so called 'green shoots' being reported in the media and by government officials? Simple, because our economic prosperity hinges on the willingness of consumers to take on debt.
Car companies, appliance manufacturers...any business with products to sell, they desperately need consumers feeling optimistic. And media outlets hungry for advertising dollars have been hitting us with lots of feel good stories about the worst of the downturn being over. Canwest site canada.com had this story out today: What ever happened to the Great Recession?
We're reading how the banks and government officials are all signalling that a return to growth is imminent or already underway. Banks need people willing to borrow money, and with the U.S. heading into midterm elections, to say nothing of Canada's current political climate...elected officials on both sides of the border are eager to tell us what a great job they've been doing.
But then we have news out that the OECD is predicting that our unemployment rate in this country will be checking in around 10% next year. We haven't seen double digit unemployment in Canada for a long time, but still that means 90% of us are working. Making sure the 9 out of 10 still lucky enough to be in the work force are optimistic about future prospects has become the cause celebre of government, banks and big business. The consumer is king, and so we're being told that the garments representing our economy are brilliant and shiny...it sure beats telling us we're naked.
Even if someone has been forced into a lower paying position, and/or found it necessary to work two or three jobs to make ends meet...its important people feel that the good times will soon be rolling again. Otherwise consumers might forgo that home purchase, leveraging almost the entire purchase price thanks to record low interest rates. Elected representatives may find themselves hunting for a job if voters believe things aren't as rosy as we're being led to believe.
The Kool-Ade stand is open for business, but I'm going to wait another six months to see how well it settles.
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3 comments:
The recession will end once people realize how much everything has gotten cheaper. People will start buying more and more products and other people will see people buying more and more products and this will lead to huge spending and thus recovering the economy. BUT! This may seem as a good thing but in the long run we're doomed again because the same crisis as this one is bound to happen again and again and again. It's sad that we really can't prevent it...
Take care, Ella
Bonjour,
Dear "Furniture rental" the way our economy works is not sustainable. Even if we buy more products those products are not putting money back in the Canadian economy because they are made somewhere else...
I just advised a friend who was on the fence about how soon to sell their condo to sell like "last week"! No Canadian lenders didn't get as involved in sub-prime, but it's the other types of mortgages like those option ARMs and whatnot. We have a huge wave of resets coming in the next two years that WILL be a major collapse and we will be worse off cause it's too cold for tent cities here!!!
Out of a recession? None of friends have any savings... in fact they all have massive debt. For some reason though the mentality here is if you don't have things on your credit card, then the car lease, home mortgage, unpaid student loans, pensionless job (not that that will be worth anything down the road), and the fact the mommy and daddy have been subsidizing tons of stuff, doesn't seem to count.
Yes, we're broke!
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