Economic Downs - and Ups
The sliding US economy hit a steeper slope last week, with news that a quarterly downturn had officially ended the long boom and unemployment had reached a five-year high.
The tumble in the third quarter was accelerated by September's terrorist attacks, which damaged a wide range of service industries, including travel, lodging, and restaurants. Even now, the uncertainties caused by continuing terrorist threats are adding to a wariness felt by consumers and investors.
The US slide has increased financial skidding worldwide. From falling prices for commodities such as minerals produced in developing nations to job-slashing in far-flung factories that produce consumer goods for the US market, the downturn is a near-universal experience.
But it needn't be an endlessly drawn-out one.
Many of the factors that brought sharp productivity gains in the '90s expansion remain in place - including a freer world trade environment and pervasive information technology.
The Federal Reserve is continuing to ensure an ample money supply by cutting interest rates. And even the current slimming down in many businesses, tough as it is on laid-off workers, can help set the stage for greater economic efficiency and rebound.
All-important is a rebound in Americans' confidence in their economic future. That will be helped by intelligent management in Washington. Congress should settle on stimulus legislation that provides both tax breaks to encourage long-term business investment and temporary help for the unemployed.
The battle against terrorism, in all its facets, has to be increasingly marked by consistent effort and creative strategy. The public needs to sense that the initiative doesn't rest only with the terrorists.
The economic clouds are not permanent, as those who have seen past recessions know. Many economists forecast growth late in 2002. That will hinge on both businesspeople and consumers keeping a measure of optimism while we work through today's uncertainties.