Thin quiltings of clouds raced across a growing white moon last night, and had totally consumed the sky by the time Koko and I went walking this morning. The streets were wet from a welcome rain and light sprinkles caused me to grab my umbrella just in case it turned into something more.
Could this finally be the end of our long spate of hot, muggy weather?
Those who were predicting the recession would spell the end of capitalism and consumerism as we’ve known it may have to reassess, following reports that the recession is over.
Or maybe they won’t. As other reports, including The Globe and Mail, make clear:
The main driver of the economy – U.S. consumers – are still in a deep funk, relying heavily on temporary government incentives to get them to spend.
“Economists are the only people saying the recession is over,” cautioned Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, N.C. “Consumers haven't seen it yet.”
Locally, those in the economy-driving visitor industry are cautious about the speed of Hawaii's recovery. In writing the story about Councilman Jay Furfaro yesterday, I found in my notes his comments about the debt service that Island hotels are facing. The nationwide average, he said, is $6,000 to $10,000 per room, while in Hawaii, it's $25,000 per room.
"It was necessary to do to remodel and have a competitive advantage," he said, "but they got caught on the down side. Now they're seeing less occupancy and lower [room] rates. I think the business in Hawaii is starting to come back. It's going to be a lot slower than people believe. I don't think any properties will close, but the sad thing is we're seeing these layoffs as they try to control expenses."
Despite the bleak local situation, reports that the national economy grew 3.5 percent in the third quarter were enough to rally the stock market. According to the version of the AP story that ran in today’s Honolulu Advertiser under the headline “Economy's growth in third quarter signals end of recession:”
The Dow Jones industrials gained nearly 110 points in midday trading and broader indices also rose.
Given the dismal jobless rate — now at a 26-year high of 9.8 percent, and expected to rise into next year — and the big question of whether the economy will continue to grow once the government spending incentives are pau, doesn’t it all seem a bit contrived to be pronouncing the end of the recession?
Of course, with the all-critical holiday spending season now upon us — have you seen the Christmas trees and other paraphernalia already on display in stores? — it’s not surprising that media reports are spreading good cheer about the economy.
So it looks like the jury is still out on whether the final outcome will be buy-buy, or bye-bye.
The government is doing its part to promote the former through expenditures intended to effect the latter on our "enemies." President Obama just signed into law the $680 billion National Defense Authorization Act, the largest military spending bill of its kind. As Democracy Now! reports:
[T]he bill included several military spending projects he had opposed, including $560 million for a new F-35 Joint Strike Fighter engine the Pentagon had rejected. Overall, the bill increases spending $24 billion from the last fiscal year.
Meanwhile, priorities are very different on the home front, where state governments are cutting spending on education and social programs. Now Hawaii’s Department of Education is claiming is claiming that “multiple thousands” will lose their jobs if the lawsuit challenging Furlough Fridays prevails:
Schools Superintendent Pat Hamamoto and other education officials told Board of Education committee members yesterday that if the furloughs are overturned, the layoffs will be in the "multiple thousands" and center on probationary teachers, administrators and others. Tenured and special education teachers would not be laid off, Hamamoto said.
Yesterday, Eric Seitz, one of the attorneys representing those suing over the furlough plan, called the threat of layoffs an attempt to scare parents and teachers. "Whipping up this hysteria is absolutely irresponsible," he said. "I think it's horrible for them to take that position."
So what’s the truth? Like the news about the end of the recession, it’s really hard to tell.