Whomever wins today will inherit a U.S. economy tentatively on the mend. Factory orders rose in September by the most in more than a year. In the service sector, 13 out of 18 sectors showed growth in October. Unemployment is below 8 percent.
Compared with four years ago on Election Day, the banking sector is healthy, if still dangerous. Critically, housing has finally hit bottom and in many parts of the country starting to point up again. The Dow Jones Industrial Average closed back then at 9,625. As I write, it is at 13,274. Big companies that came through the crash have enjoyed record profits and cash on hand. Inflation is low. Treasuries and the dollar are safe havens.
One can credit many factors, from TARP to the stimulus and the saving of General Motors and Chrysler. The Federal Reserve didn’t repeat its mistakes that turned a server contraction into the Great Depression. And, slowly because of the financial roots of the collapse, the business cycle finally turned up.
Much damage remains. GDP has topped its old high, but not GDP per capita. Joblessness remains pervasive, with many facing the prospect of never working again, and average wages continuing their long decline. Debt remains a problem everywhere, including consumer debt and college loans. GDP growth was 2 percent in the third quarter, too weak to address these problems, but better than many countries. The eurozone and China remain dangers to the international economy. The fiscal cliff, unaddressed, presents a challenge to the American economy.
And that’s the snapshot as Americans go to vote. It’s easy to forget four years ago, when we teetered on the brink.
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Today’s Econ Haiku:
Is it over yet
All over but the shoutin’?