Each new year people look forward to a new beginning, hoping for peace and prosperity, health and happiness. This year investors and economists in particular are looking for a brighter future, as the past 18 months have been very dark in the investment world.
Unfortunately it's never as easy as forgetting the old and embracing the new. If it were, life and economics would be a lot simpler -- almost like turning the page to a new chapter in a book. Wouldn't that be nice? This year the world -- not just U.S. citizens and investors -- is hoping that the new year and the new Obama administration will help ease the economic pain of 2007-2008.
But after the most recent financial crisis, it's going to take much more than a new White House, hope and a new calendar to undo the damage done by nearly a decade of flat economic growth and what some economists are now calling economic regression, according to an article in The Washington Post.
Over the past eight years the number of jobs in the U.S. economy increased by only about 2 percent, and that includes 600,000 to 800,000 construction jobs tied to the unsustainable housing bubble. Gross domestic product grew more slowly during the past eight years than any other period since the Truman administration. And, most important, Americans' incomes grew more slowly during this same period than during any other since the 1960s, according to the article.
So as the economy tries to move on, not only do the immediate, recession-causing problems -- rising unemployment and decreased business and consumer spending -- need to be addressed, but longer-term damages (including an enormous budget deficit and a $10 trillion trade deficit) need to be fixed in order to put the economy and the country back into gear. I am certainly hopeful that in 2009 we will begin to see the light at the end of the long and dark economic tunnel.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio