Time (via Carpe Diem): Recession: Why We're So Gloomy
Well,
why are Americans so gloomy, fearful and even panicked about the
current economic slump? U.S. consumers seem suddenly disillusioned with
the American Dream of rising prosperity. Hard times are forcing some
people to turn their back on the American Dream.
"Whining"
hardly captures the extent of the gloom Americans feel as the current
downturn. The slump is the longest, if not the deepest, since the Great
Depression. Traumatized by layoffs that have cost million of jobs during
the slump, U.S. consumers have fallen into their deepest funk in
years.
While
some economists have described the current slump as a near depression,
that phrase overstates the case if it is taken as a comparison with the
period 1929-33, when the U.S. economy contracted by nearly a third. The D
word becomes more valid, especially with a small d, when it is used to
compare the growth rate of the 1930s, which averaged 0.5% a year, with
the expected sluggishness of the next decade, which some economists
predict will see an average growth rate of 2%.
"I'm
worried if my kids can earn a decent living and buy a house," says Tony
Lentini, vice president of Mitchell Energy in Houston. "I wonder if
this will be the first generation that didn't do better than their
parents. There's a genuine feeling that the country has gotten way off
track, and neither political party has any answers. Americans don't see
any solutions."
The
deeper tremors emanate from the kind of change that occurs only once
every few decades. America is going through a historic transition from a
heedless borrow-and-spend society to one that stresses savings and
investment. When this recession is over, America will not simply go back
to business as usual.
The
underlying change in the way American consumers and business leaders
think about saving and spending will make the recovery one of the
slowest in history and the next decade one of lowered expectations. Many
economists agree that the U.S. will face at least several years of very
modest growth as consumers and companies work off the vast debt they
assumed in the last decade. ...
By the way, the date of this article? January 13, 1992! ;-)
