Robert Samuelson, in the latest issue of Newsweek, argues that recessions really aren’t that big of a deal. Mr. Samuelson alays our fears with the following gem:
“people talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word “depression.” Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that’s still a lot.”
Oh really? What if GDP contracted 10% to $12.5 trillion… would that be OK because $12.5 trillion is “a lot?” Mind if we take 10% of your paycheck? Housing prices, from which Americans derive most of their net worth, are down double digits, energy and food costs are through the roof, the stock market has hemoraghed trillions of dollars of value, and one of the largest investment banks just failed (practically).