Why Some Letters of the Alphabet are Better than Others

Economics, Anger and Politics

by Diane Wilson

Nouriel Roubini, aka Dr. Doom, writes in the New York Times about how the US might proceed through this dreadful recession. He notes that it skipped the usual V and is in the 15th month of a U-shaped recession that will unquestionably be the longest since the Great Depression.

US GDP will not grow more than a muted 1% in 2010, while unemployment will rise to around 10%. What's more, even if the Government throws all necessary stimulative actions at the problem, Roubini does not see growth rising to 2% until 2011, meaning the recession could stick around for three years. That's the good news.

If the collective we do not put policies in place, the U-shaped recession could morph into an L-shaped near-depression or stag-deflation, much like the Japanese experienced in the 1990s.

That will give a lot of angry people more time time to get even angrier. Recently, CNBC's Rick Santelli, an otherwise affable man who reports on bonds, created an on-air diatribe against Obama's mortgage relief program. This vitriol cannot be ignored. The GOP has spent the entire week declaring the Democrats Socialists, while some of their more rational members, like Governor Schwarzenegger, wait eagerly for the postman to deliver the Stimulus money.

Frank Rich notes in his column in The New York Times "the genuine populist rage in the country — aimed at greedy C.E.O.’s, not at the busted homeowners mocked as “losers” by Santelli — cannot be ignored or finessed."

We are probably reaching the end of people's ability to absorb weird letters -- V-shaped, U-shaped and L-shaped recessions -- and frightfully large numbers. Most of us just cannot wrap our minds around $350 billion TARP here, $787 billion stimulus there and a $1.3 trillion deficit.

What to do. Fortunately, economists of all stripes are on board with the President. It is now up to the Democrats to put out a very large welcome mat for the Republicans and allow them to talk -- not yell -- about their differing ideas. There has got to be some consensus on some issues. Start with small initiatives, and gently get everybody going in the same direction, maybe by giving credit and even ownership to Republicans for some of their ideas. Also, it would be helpful to have leadership from the Republicans who are currently working with the President. The current anger is counter-productive. And at times, downright scary.