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Northwest Voices

Seattle Times letters to the editor

April 18, 2009 at 6:00 AM

Manic-depressive economy

Mix of good and bad news is normal

I was a bit bemused by Froma Harrop’s complaint about our “manic-depressive economy” [“Our manic-depressive economy,” Opinion, Froma Harrop column, April 14]. Did she expect that the recovery would announce itself with heralds and bells, and that from one day to the next all the relentlessly bad news would suddenly turn universally positive?

What’s happening is exactly what you’d expect to see: a mix of good and bad news that slowly becomes more encouraging overall until at some point economists, always better at forensics than prediction, reach a consensus that the recovery began six months earlier.

The gyrations of the stock market are indicative of the same thing. Doesn’t anyone remember what happened when the markets began to tank? We had a number of sessions that seesawed wildly, with traders bombarded by dueling pundits, until the economy’s condition finally became clear, at which point the bottom fell out. All we’re seeing now is the process in reverse. Hey, Jim Cramer is probably right. Even a broken clock is right twice a day.

In fact, I disagree with those who so confidently predict that the recovery will be shallow and unspectacular. This recession has been far more Darwinian than most. The better-run companies cut back aggressively and survived; the stupid (Circuit City, General Motors) have or will fail.

What do you suppose will happen when well-managed companies see the tide turning, knowing that some of the competition is gone and market share is up for grabs? Probably the same thing that smart American companies have been doing in China for the past 20 years — get into the game aggressively, knowing that some short-term losses are a small price to pay for future market penetration in a major world economy. What’s more, inventories are way down and, by the same logic, surviving retailers won’t want to be caught short. Both mean significant hiring.

Yes, I know there are some shoes that haven’t dropped yet, and that bits of good news may be few and far between in the near term, but I think this country’s going to be just fine. Clarity and finality will just have to wait.

— Ron Philippsborn, Langley

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