Earlier this week one of the guys I worked with came into the office and asked me what I thought of the economy. My response was that it is pretty ugly. He asked me if I had seen anything like this. I thought about it for a little bit and then responded that the crash in 1987 was pretty ugly and so was the dot com bubble bursting, but that this felt pretty significant. The previous ones felt like they were investor slaughters and that on a day to day basis there wasn't a big feeling of other issues directly impacting me. That may have had something to do with my age and perspective.
This time around has been more concerning because a number of factors seem to be adding up to longer lasting and structural impacts. To me it started with the post 9/11 war stance which seemed not entirely unreasonable pre-Iraq in my opinion. Moving away from an orientation of balanced budgets to a ramping up the war machine is always a cause for concern. While one can argue the merits of our middle east strategy, more problematic to me is the unbelievable cost. The Libertarian in me finds that hard to swallow.
When you layer on the housing and mortgage collapse, with the devaluation of the US dollar and the spike in oil prices, the pain is obvious. This kind of pain hits normal people as the decrease in personal wealth ala perceived housing value and the personal overhead on day to day expenses around food and putting gas in the car.
While the previous crashes or crises seemed like a paper problem for lots of people, myself included in the dot com instance, this one feels like we just spread the flu from normal people to Wall Street and make no mistake, Wall Street is burning.
I don't pretend to be an economist or any wiser than anyone else on these issues but the conclusion of the discussion I mentioned at the top was that yes this is pretty bad and pretty broad based. The good news is that we are resilient and I have the utmost confidence that we as a country can weather any storm and provided we have some leadership to sort through critical decisions during this critical times we will find ourselves back on an upward trend in the not too distant future. Let's hope so.