Double dippings

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Letter to the editor by Jim Flynn

By Jim Flynn

There was a time when a double dip was two scoops of drippy ice cream on a sugar cone.

At the moment double-dip means a backward slide of the nation’s production of goods and services after a short period of growth - in other words a recession followed by a recession. It happened in 1937, a recession within the Great Depression (1929-1941).

A few pessimistic economists keep mentioning the possibility of a double dip in our present economic malaise. Washington and Wall Street say they’re still optimistic - and why not? They’re the folks with jobs, perks, pensions, benefits, bailouts, boats, and bonuses.

Politicians and money manipulators would like us to forget that thousands of jobs which left the U.S. over the past 20 years aren’t ever coming back, and that trillions of dollars of stimulus money was used to re-inflate the stock market, save government jobs, and buy votes. Very little dribbled down to tapped-out consumers and small businesses.

For 30 years Washington has been on a spending orgy. To sweep aside any concerns and suspicions of voters, several administrations and Congresses encouraged citizens to buy houses they couldn’t afford, maximize credit against income they might never earn, and spend inflated home equity, which disappeared when the real estate bubble burst.

Our situation resembles the Japanese “lost decade.” Their stock market bubble hit 38,951 in 1989 and bottomed at 6,994 in 2008. As the Japanese have learned, a lost decade can last 20 years or more, if that’s how long it takes to squeeze all the hot air out of years of financial fantasy.

For the first time in decades, U.S. consumers are spending less and saving more. They sense we could be adrift in a financial funk for a long-lost decade. Unfortunately we’re still at the mercy of the dipsy-doodle politicians in Washington and the money changers on Wall Street. Buying a piggy bank for loose change ain’t such a bad idea.

Jim Flynn