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Wednesday, April 21, 2010

The Recession Is Over!! Don't believe it for a minute

The cover of this week's Business Week announces the Recession is Over. And that is the foolish fantasy of economists who don't really understand how Business Cycles work. You can understand Business Cycles by reading The Great Recession Conspiracy at, at and as a Kindle book.

The Business Cycle is driven by psychology, not finance, so a little bump in manufacturing output to re-stock shelves does not signal the end of the recession. Here are the facts that actual Americans are facing.

*Fifteen million Americans are completely unemployed.
*Six million have been unemployed for over six months.
*Seven million are working forced shorter hours.
*Unknown millions are saving, not spending, because they don't know how long they will have jobs.
*And virtually all Americans are extremely worried and angry.

Here are some of the measures of that unhappiness.

In 1958, 73% of all Americans said that they trusted the Federal government to do the right thing most of the time. Today, only 22% say the same thing.

39% of all Americans think they have less opportunity than their parents.

50% of all Americans think that the next generation will have a lower standard of living than they do today.

The typical American families income today is actually less than it was in 2000.

The richest 10% of all Americans earn 50% of all income in the U.S. and the other 90% know it.

Teachers, firemen, librarians, policemen and others are losing their jobs.

Small businesses are going bankrupt in record numbers because of a lack of business.

Consumer expenditures account for 70% of the U.S. economy, government about 20% and business the remaining 10%.

The recession will be over when the unemployed go back to work, when those working short hours go back to full time, and when the remainder stop worrying about losing their jobs, and when they re-gain their trust in the government.

When Americans change their minds and start spending again, then the recession will be over. And not one minute sooner.

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