Big R or Little r?

There is a lot of talk lately about whether or not we are going into a recession. The answer is yes. The economists say it is normal and, perhaps, a little overdue. The question is - How bad will it be?

One key indicator I look at is the jobs forecast. I met with several of the largest employers in the Washington metropolitan area recently and nearly every one of them claimed they will hire as many new workers as they did last year. Last year was one of the best years for economic growth since the late 1990's. We were not in a recession. Oil prices fluctuated, the Iraq war continued, but it wasn't until the late Fall when the mortgage crisis began to have impact.

Today, any honest person would say the recession is, or soon will be, upon us. Based upon the actions of the Federal Reserve Bank, the strength of the local economy, and the technical job market, I believe the recession will be a small one and short-lived.

Although many foretell of major changes based upon the upcoming presidential election, history says that those changes won't be swift in coming. Our president, whoever he or she will be, will not be king/queen. He or she will still have to work with Congress to make any changes to the course of this country. Again, history shows that those changes do not come swiftly, or fast enough, depending upon your point of view.

2008 will be a year in which many of us will be more frugal, either by chance or by choice. I believe that the economic engine that supports this great country of ours will be picking up steam again before mid-year 2009.

Fortunately, I am not a betting man.

Gary Cluff

February, 2008