This is not an ordinary business cycle.
The list of things gone wrong and government efforts to get ahead of the problems seem endless.
In mid-2008 the quick unraveling of sub-prime debt brought a violent halt to the financial markets, and slammed the door on all mortgage financings, ultimately causing the collapse of a host of investment and commercial banks, hedge funds, insurance companies, and other financial entities throughout the industrialized world.
The last four months of 2008 saw an economic collapse rare in its suddenness, severity and breath as financial institutions, industrial companies, and consumers essentially took to the bomb shelter, withdrawing from all commercial activity.
Gross Domestic Product declined 6.
3% in the fourth quarter from the third quarter.
The stock market declined over 22% in the fourth quarter as investors abandoned stocks for the safety of U.
S.
Treasuries.
The economy seems to be recovering from its frightening decline.
As the economic signals continue to improve the financial markets also are showing signs of recovery.
Even now so early in the cycle it is apparent that this recovery, like the recession, will be far different than previous episodes.
In the past consumption usually led the way back as some combination of easier monetary policy, reductions in income taxes, and increased government spending started consumers spending again.
The improving domestic scene led to increased production and an upturn in employment.
Foreign nations, many of which are export oriented, felt the turn of the tide in the U.
S.
and were not long in joining in the recovery further bolstering our industrial sector.
A new growth cycle was underway.
The situation today is far more complex.
The depth and breath of the recession was extraordinary because it struck at the country's financial heart.
It started at a investment bank, Bear Stearns, but spread like wildfire to consume everything in the path.
Most financial institutions were in a similar fix as Bear Stearns, unable to value their investments even as they continued to create and sell them around the world.
Essentially, with mounting fears, no willing buyers, and no way to obtain price levels, the instruments were worthless.
Figuratively, the emperor had no clothes.
Although the trouble originated in Wall Street the financial sector was effectively rescued by unprecedented government intervention and the creation of numerous guarantee and spending initiatives aimed at every real problem and feared contingency imaginable.
The process has continued into 2009 with the creation of yet another program, the Public Private Partnership Investment Program, the fifteenth government program with direct access to funding since December 2007.
The result is that the federal government has assumed responsibility for many of the major liabilities in the country, and has assumed ownership rights over many of the largest businesses, both financial and industrial.
The amount of money and guarantees committed to the various rescue programs is impossible to ascertain since many are open-ended in both time and amount.
Still, they seem to have been successful in returning the financial sector to stability.
The consumer, however, equally wounded by financial losses, is still struggling to recover.
The $785 billion stimulus package so far has failed to deliver on its job creation promises.
It is becoming increasingly apparent that its value as a growth accelerant is muted, at best.
Despite its questionable benefits, neither the Administration nor Congress shows any sign of abating their extraordinary expense spending regimes.
As one result, our record creation of government debt understandably is causing increasing anxiety among other countries.
Unburdened by the financial turmoil that gripped the industrialized world, emerging nations are leading the world out of recession.
A multi-year expansion is underway in these countries.
Demographically, developing nations are in a favorable growth environment.
Populations are growing and the average ages are quite young relative to the industrialized world.
The people have tasted the benefits of economic development in recent years and a desire for a higher standard of living is palpable.
A telling statistic is that today for the first time more than half the world's population has left the farm and lives in cities.
Basic infrastructure is a crying need and meeting it offers new possibilities for jobs and a steady income.
Enormous world wide liquidity and access to capital is still available.
In many of the countries, private sector development is increasingly accepted, especially for large, complex projects, such as the construction of pipelines and offshore drilling platforms.
Many of the most populous developing nations are adopting capitalist solutions as the most effective system for creating jobs, meeting basic needs, and providing a sustainable and attractive future for a growing population.
By contrast the industrialized world seems bogged down in the after effects of the financial turmoil and recession.
Our own country appears increasingly to be turning inward with new social programs, restrictions on trade, and vast expansion of government.
Proposed tax increases to pay for the efforts are draconian and will hit every consumer and business sector.
If implemented, they will restrain the private sector in favor of expanded government solutions, and result in lower productivity.
The blueprint being followed is very similar to the European model which over many years resulted in underachieving economies, high unemployment, and dependence on government.
It need not turn out this way.
The potential for accelerating U.
S.
growth is real, and is based on our efficient low cost manufacturing sector, job creating ability through small business entrepreneurship, and supportive government policy toward taxes, trade and private sector solutions.
Now that the recession is receding the current environment offers the opportunity to return to the sound economic policies which made the U.
S.
economy the envy of the world by allowing scope for the natural initiative and creativity of every person.