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Thoughts
on the recession
Thoughts
on the recessionRecessions can bookmark one's life.
I've been through four as an adult. Each met the technical
definition for recession - at least two back-to-back
quarters of negative economic growth. Yet, each had
its unique quality.
My
first one, in the mid-70s, found me at college. The
Yom Kippur War had prompted an oil embargo by Arab nations,
which translated into high inflation and long lines
at the gas pumps for Americans. Oil heat was likewise
in such short supply that my college in Massachusetts
sent me home to North Carolina for an extra month that
senior winter.
A
decade later, I was a newspaper reporter in Virginia.
This recession was marked by oil shortages, too, but
these were caused by the Iranian Revolution. The downturn
was accompanied by a flood of foreign products, notably
Asian autos and electronics, because U.S. industries
had gotten so sloppy with production and quality. My
third recession - 1990-91, associated with the Gulf
War - found me working as a magazine editor in New York
City. It was short and sharp and 10 of my colleagues
lost their jobs. Luckily, not me. At the time, I had
two very young daughters.
This
current one is truly hard to explain. Even though it
started in March, economists didn't call it for months
later. This time, there's low inflation and plentiful,
cheap fuel. But the Middle East again has played a role:
Recovery has been stalled by horrific terrorist attacks
on U.S. soil that killed thousands of innocent Americans.
Coming,
as it did, after 10 years of heady economic growth,
this recession is a stunner even though Virginia is
getting off relatively easy overall. The 1990s boom
years were characterized by youthful frolic in new technologies
such as the Internet, which brought not only creativity
but arrogance. Even the graybeards had convinced themselves
that this time it was different - the New Economy had
immunized us to cyclical downturns. Falling in line
with the times, usually conservative Virginia got the
notion that it had morphed into a high-growth, high-tech
state.
As
our State of the State special report shows, that's
not entirely wrong. But if you discount the turbo-charged
performance of Northern Virginia, where most of the
New Economy transformation has occurred, the sad truth
is that Virginia's economy isn't all that much to write
home about (home to North Carolina, that is). Some downstate
communities have performed in line with national averages.
Several have done worse - high-tech or no high-tech.
And unless real steps are taken to replace dying, labor-intensive
sectors such as textiles, apparel and possibly even
furniture, the fifth recession of my adult life could
find Virginia really hurting.
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