Reuters reports that the US economy will slip into a shallow recession next year. They must not have been to NW Ohio where we have been in a downturn for months. Every retailer and owner I talk to around here says that they haven't seen things this bad in many years. Also, I saw on the news tonight that Tiffin in losing that manufacturing plant. How bad can things get? January and February could be brutal. I'm more than a little worried. If this keeps up, we won't have to worry about the quality of our schools because we won't be able to afford schools.
SAN FRANCISCO (Reuters) - A recession looms for the U.S. economy in the first half of 2008 due to faltering consumer spending and nonresidential construction, which have so far helped offset the housing slump, a report released on Wednesday said.
"Some of the fundamentals that helped prop up the economy in 2007 are beginning to look shaky."
http://www.reuters.com/article/ousiv/idUSN0543037520071205?sp=true
Of course a prediction of a recession doesn't mean recession. In general, predictions are saying that growth is slowing, but no one knows for sure if we'll actually slip into recession in the next year. People have been saying we'll enter recession mode "next year" for the last 3 or 4 years, but it hasn't happened yet. Regardless of when it happens, it is to be expected anyway. We haven't had a recession since 2001, and the economic cycle gods usually let their presence be known every 6-8 years. I don't mean to downplay a recession, but recessions in the last 30 years haven't been that oppressive. They're short-lived now, so we rebound pretty quickly. For example, the 2001 recession lasted two quarters, which is the minimum criteria for a recession and many people have questioned the legitimacy of whether we actually saw negative growth in those two quarters.
As far as a Toledo "recession," I'm not sure. It's definitely possible, but using retailers as a gauge of economic activity in Toledo isn't that reliable. We've seen tremendous growth in retail square footage in the last 4 years or so in the Toledo metro market which is taking some of the retail revenue from previous retailers and giving it to new retailers. Most of those previously existing retailers are in Toledo. I would be willing to bet that Toledo has seen a drop in retail revenues the last 4 years, however Maumee (Fallen Timbers) and Perrysburg (Levis Commons and surrounding develop) have seen tremendous growth.
Daimler is laying off all of 3rd shift, so it's going to get worse. I don't know if they still have the job bank - don't think so.
Oh, what's this, a prediction of recession long after it has become a reality for Toledo? Gee, how long have I been saying that? Toledo entered a deep recession in 2001 and it never emerged.
HeyHey and his ilk need to admit that growth due to the availability of bank loans does NOT mean prosperity has arrived. Debt is not wealth. Just look at the remnant structures from the Pharmacy Wars™ that were fought in Toledo from 1998 onward. Was THAT expansion definably prosperity? No.
Toledo is going to end up with an ocean of empty retail space. All that craaaap was not supposed to be built in the first place. The risk/reward equation clearly said such construction was a losing proposition.
But ... the banks were lending fiercely, and Toledoans were spending just as fiercely (due in no small part to the same banks offering credit cards, and HELOCs). But debt is not wealth, hence eventually the underlying economic weakness in Toledo demands that we de-value this activity as the debt costs overwhelm many of us.
What the hell is the matter with us? Why can't we live within not only our means, but within our FUTURE means? Prices on homes are falling in part due to our bringing price appreciation from the future into the present. Japan tried that little move, and suffered 15 years of price falls and stagnation as a result. Why don't we learn from history?
Why do we believe we'll have income tomorrow when our employers are laying us off today?
Good post GZ. But it doesn't just apply to Toledo. People everywhere in this whole country have been using their homes as ATM's and now the bubble has well and truly burst.
http://www.cbsnews.com/stories/2007/03/26/opinion/main2608369.shtml
Last year, the National Journal asked a group of Republican senators and House members: "Do you think it's been proven beyond a reasonable doubt that the Earth is warming because of man-made problems?" Of the respondents, 23 percent said yes, 77 percent said no. In the year since that poll, of course, global warming has seized a massive amount of public attention. The U.N.'s Intergovernmental Panel on Climate Change released a study, with input from 2,000 scientists worldwide, finding that the certainty on man-made global warming had risen to 90 percent.
So, the magazine asked the question again last month. The results? Only 13 percent of Republicans agreed that global warming has been proved. As the evidence for global warming gets stronger, Republicans are actually getting more skeptical. Al Gore's recent congressional testimony on the subject, and the chilly reception he received from GOP members, suggest the discouraging conclusion that skepticism on global warming is hardening into party dogma. Like the notion that tax cuts are always good or that President Bush is a brave war leader, it's something you almost have to believe if you're an elected Republican.
How did it get this way? The easy answer is that Republicans are just tools of the energy industry. It's certainly true that many of them are. Leading global warming skeptic Representative Joe L. Barton (R-Texas), for instance, was the subject of a fascinating story in the Wall Street Journal a couple of years ago. The bottom line is that his relationship to the energy industry is as puppet relates to hand.
But the financial relationship doesn't quite explain the entirety of GOP skepticism on global warming. For one thing, the energy industry has dramatically softened its opposition to global warming over the last year, even as Republicans have stiffened theirs.
The truth is more complicated — and more depressing: A small number of hard-core ideologues (some, but not all, industry shills) have led the thinking for the whole conservative movement.
Your typical conservative has little interest in the issue. Of course, neither does the average nonconservative. But we nonconservatives tend to defer to mainstream scientific wisdom. Conservatives defer to a tiny handful of renegade scientists who reject the overwhelming professional consensus.
National Review magazine, with its popular Web site, is a perfect example. It has a blog dedicated to casting doubt on global warming, or solutions to global warming, or anybody who advocates a solution. Its title is "Planet Gore." The psychology at work here is pretty clear: Your average conservative may not know anything about climate science, but conservatives do know they hate Al Gore. So, hold up Gore as a hate figure and conservatives will let that dictate their thinking on the issue.
Meanwhile, Republicans who do believe in global warming get shunted aside. Nicole Gaudiano of Gannett News Service recently reported that Representative Wayne Gilchrest asked to be on the Select Committee on Energy Independence and Global Warming. House Republican leader John Boehner of Ohio refused to allow it unless Gilchrest would say that humans have not contributed to global warming. The Maryland Republican refused and was denied a seat.
Representatives Roscoe Bartlett, R-Md. and Vernon Ehlers, R-Mich., both research scientists, also were denied seats on the committee. Normally, relevant expertise would be considered an advantage. In this case, it was a disqualification; if the GOP allowed Republican researchers who accept the scientific consensus to sit on a global warming panel, it would kill the party's strategy of making global warming seem to be the pet obsession of Democrats and Hollywood lefties.
The phenomenon here is that a tiny number of influential conservative figures set the party line; dissenters are marginalized, and the rank and file go along with it. No doubt something like this happens on the Democratic side pretty often too. It's just rare to find the phenomenon occurring in such a blatant way.
You can tell that some conservatives who want to fight global warming understand how the psychology works and are trying to turn it in their favor. Their response is to emphasize nuclear power as an integral element of the solution. Senator John McCain, who supports action on global warming, did this in a recent National Review interview. The technique seems to be surprisingly effective. When framed as a case for more nuclear plants, conservatives seem to let down their guard.
Sensor I think that post was made for another article.
You will always find 100 people predicting something bad as compared to maybe 2 to predict something good.
However I had relatives in Minnesota the last few years who couldn't believe the Toledo economy was so bad when theirs was so good. And this while I had Toledoans telling me that the nation was in a recession. Too bad the rest of the country didn't see it that way.
The thought in the area has been there goes Toledo and thus goes the nation. This is not true by any means. Ohio and Michigan have been hit hardest because they have yet to adapt to the new Information based economy and still are grasping to the manufacturing and agricultural based economy's (which are more susceptible to boom and bust).
Add to that the assumed debt that GZ mentioned and you have an answer why this area's economy is nationally only better than Mississippi and Louisiana (and saying better than Mississippi is a strech because they've grown since Katrina so realistically only better then Louisiana).
Until Ohio, Michigan, and Toledo realize that agriculture and manufacturing are the past for American businesses they will always be in a recessed economy. The hardest part is Toledo has so closely aligned itself to these economies because of it's union ties. When we look at the nation as a whole just look at the top performing industries today and the worst performing. The worst are union dominated industries. That's because unions are a stigma of the industrial age and do not apply in today's business world. Their continued survival has been a drag on the economy.
If Toledo survives it'll be because of two local companies who have laid a foundation for a new economy. They are The Anderson's and First Solar. They both have shown enough foresight to look to the future and invest in it. They will succeed while the others fail. Unfortunately it means at least 10 more years of a depressed local economy.
MikeyA