US Airways - July 2012 - (Page 84)

Must Read of the economy always seem to be the last to know about a turn. In the fall of 2008 the professional forecasters surveyed by the Philadelphia Federal Reserve Bank said the economy would shrink at a 1.1 percent annual rate in the ﬁrst quarter of 2009; instead it shrank at a 6.7 percent annual rate. Oops! A human factor is at work here. Muscle memory exerts a powerful hold on markets and economic actors. Once bad things happen, there’s a natural tendency to think — and expect — that they will happen again. Many people who were burned during the Great Depression never again invested in stocks, thus missing out on powerful bull markets. An engine backﬁring in lower Manhattan today provokes a much different set of reactions than it did in, say, September 2000. The deep recession of 2008– 2009 has been one such searing, lifealtering experience. As Ross DeVol of the Milken Institute noted, “The peakto-trough decline in real GDP during this recession was 4.1 percent, making it the most severe downturn since World War II.” The majority of people alive today, working, managing, investing, and commenting, have no experience of a recession this long and this deep. In the quarter-century from November 1982 to December 2007 there were only sixteen months of contraction, from July 1990 to March 1991, and from March 2001 to November 2001. These recessions were unusually shallow too, with 1.49 and 0.62 percent declines in output from peak to trough, respectively. The only contraction worse than the one we just lived through was the Great Depression, a 43-month doozy that ran from August 1929 to March 1933. Our balance sheets, bank accounts, egos, and psyches simply weren’t prepared for the depth and degree of shrinkage. Or for the slowness of the recovery. As Kenneth Rogoff and Carmen Reinhart document in This Time Is Different, not all recessions are created equal. Economies recover relatively quickly from downturns that are natural outcomes of the business cycle. Having produced too much or too exuberantly, companies idle capacity until inventories are worked down, and then reopen factories when demand rises again. By contrast, contractions precipitated by ﬁnancial crises last longer, are slower to dissipate, and can retard economic growth for a decade. It’s common for exuberant projections to be made at the top of economic and market cycles. The book Dow 36,000, in which the authors James Glassman and Kevin Hassett proclaimed the Dow Jones Industrial Average could easily triple from its 12,000 level, was published in September 1999 — just before the market took a big tumble. Just so, prophecies of long-term decline are usually issued only after we’ve suffered a catastrophic fall. In the spring of 1933 few New Deal critics believed that a bottom had been reached, that many of the programs and reforms would work, that the nation would rebuild itself and, ten years later, be in a position to lead the world to victory in the ﬁght against tyranny — because nobody could imagine any of those events. From the uprising in Libya to the housing market, we live in an age of continual discontinuity. Predictions about what will happen in the economy over the next ten, twenty, or ﬁfty years generally make their authors look like fools. Imagine a book written in 1990 that tried to look twenty years into the future. Would it have accounted for China? The Internet? 9/11? A $7 billion company named Zynga that involves fake farms on something called the Internet? The Kardashians? Better, Stronger, Faster: The Myth of American Decline . . . and the Rise of a New Economy (Free Press) is now available in bookstores. Open Daily 9 a.m. – 5:30 p.m. 2350 McGregor Boulevard Fort Myers, Florida www.edisonfordwinterestates.org 239-334-7419 Got Warts? ELECTRONIC WART REMOVER One 3 minute home treatment completely eliminates the wart 100% successful Simple Effective Permanent (800) 645 0234 www.wartabater.com info@wartabater.com http://www.edisonfordwinterestates.org http://www.edisonfordwinterestates.org http://www.wartabater.com http://books.simonandschuster.com/Better-Stronger-Faster/Daniel-Gross/9781451621280 http://books.simonandschuster.com/Better-Stronger-Faster/Daniel-Gross/9781451621280 http://books.simonandschuster.com/Better-Stronger-Faster/Daniel-Gross/9781451621280 http://www.wartabater.com

Table of Contents for the Digital Edition of US Airways - July 2012

US Airways - July 2012
Table of Contents
CEO Letter
From the Editor
Did You Know?
Making It Happen
Hot Spots: Best Beaches
Wine & Dine: Table to Farm
Adventure: Home-Court Advantage
Great Escapes: Mayan Adventure
Destination Fabulous
Gear Up: Activate!
London Calling
Room with a View
Chefs Tell: Water's Edge
Charlotte in 2012
Best of Health
Flying High in North Carolina
Charlotte U.S.A.: From Crackers to Gelato
University Spotlight: Grand Canyon University
Must Read: Better, Stronger, Faster
Puzzles
Readers Resource Index
Your US Airways Guide
Video Entertainment
Audio Entertainment
U.S. and Caribbean Service Map
International Service Map
Airport Terminal Maps
US Airways Fleet/Customs & Immigration
Passenger Info/Contact US Airways
US Airways MarketPlace™
Window or Aisle?

US Airways - July 2012