Is the Recession Ending? Only if You Think So!
Strength of Will Matters more than Money in Bringing Economy Back
Considering a treatment of the recession, and its effect on millions throughout the world, it is necessary to avoid jumping at the first sign of anything resembling good news. In the third week of July, the governor of the Bank of Canada, Mark Carney, took the bold step of declaring the current crisis all but over after three consecutive quarters of economic backsliding.
Economic Growth for Canada in Q3
Carney told a news conference on July 23 he believed there would be growth in Canada in the July-September period, reversing what caused more than 350,000 Canadians to lose their jobs and wiped out more than $40 billion in wealth, forcing governments to shell out billions to stem the fallout.
"It is early days, and it is a long road,” Carney said. “But things are unfolding as we broadly expected them to -- [and] a little faster in terms of the recovery of confidence in financial conditions." Carney attributed the turnaround to a sound banking system, relative to the sick man the United States had turned into, a resource sector that is the envy of the world, and the fact that government infrastructure programs launched this year are likely to kick in next.
Stocks Jumped 250 in one Day
It’s a remarkable comeback from an abyss seen last winter as so dark and dire; even those in the banking sector had no notion last March that things would improve as rapidly as they did. Stock markets, particularly the S&P TSX Composite Index, trumpeted the news with a better-than-250-point leap in one day’s trading on July 24.
Many Skeptical Recession Over
Still in all, these are just figures, just abstracts, accompanied by the opinions of a very select few. The emotional baggage attached to the word “recession” for the hundreds of thousands the crisis has affected, directly or otherwise, will linger for months, maybe years, to come. The good tidings befalling the stock markets notwithstanding, for many, word the recession is ending translates like the last act of Shakespeare’s Macbeth – a tale told by an idiot, full of sound and fury, signifying nothing.
Indeed, Carney demonstrated his feet were still on the ground during the same news conference, when he acknowledged that economic activity would not pick up to the same point it had done before the recession until “the middle of 2010”. He also professed awareness that unemployment was on the upswing and would remain so for months to come.
So, if anyone feels like business, government officials, bankers and intellectuals are conveying the idea that recovery is already fait accompli, rest assured that is NOT the case.
Sometimes Adversity is no Match for the Will
But a lot of the ammunition meant to battle the recession is within each Canadian, between the ears, within their hearts. Sometimes all it takes is a change of mood to turn adversity around and away.
A Parable of The Old Man and the Recession
And in case a reminder is needed, there is the story of the old man who sold hot dogs. He lived by the side of the road, slightly sight- and hearing-impaired, so he seldom read newspapers, heard what was on the radio or saw what was on TV. But, he sold good hot dogs, and so, did a thriving business.
One day, his son came home from university and felt the need to expand on what he knew. “Father,” he said, “don’t you know we’re in the middle of a recession. All the papers say so. The domestic situation is bad; the European situation is worse.”
“Well,” thought the old hot dog seller, “my son’s been around. He reads the papers, he hears the news. He must be right.”
Pretty soon, the story goes, the old man cuts back on his orders for wieners, buns and condiments, and pretty soon after that, the business slows down to a crawl. Before long, the old man is doing no business at all, and closes down his hot dog stand within a matter of months.
“You’re right, son,” the old man concludes, “we’re in the middle of a terrible recession.”
Thoughts Hold Key to Beating Recession
As a man thinketh, so is he, says the Book of Proverbs. Battling the recession to its logical, clear conclusion, not the conclusion the politicians want their electors to believe has arrived, will involve sweat, toil, maybe the odd tear. But in order for the battle to be won, folks at all levels must believe it can be won.
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