These days, we hear the phrase “historically speaking” a lot. It is typically used in analyzing the current economic meltdown we are experiencing. Oh, I know, things are getting better so they tell us.
But everyone admits that unemployment numbers always trail an economic improvement. But if we still have double-digit unemployment six months from now, are we really improving?
Is the average family going to feel better? More confidant? More likely to spend money on big-ticket items? I don’t think so. And since consumer spending is 2/3s of the GDP, I think we still have a long way to go.
When you delve into the phrase “historically speaking”, you are really talking about statistics about how the economy has returned after past recessions or depressions. But are all times we live in the same? Are we the same country that we were in the 30s, the 70s, the 80s? Hardly. We are now living in a global economy that simply didn’t exist during these past meltdowns. We are also living in a time when many Americans have their retirement tied up in the market. This was certainly not the case in these past times and has only been the case since 401K pension plans were created. Before then, only wealthy people were “in the market.” The rest of us saved as much as we could and planned to retire on social security.
As I’ve stated in earlier columns, I love statistics. I first fell in love with statistics because of my love of baseball. For any serious baseball fan, the game and the stats are never far apart. But in my beloved sport of baseball, where all of the lore is based on past statistics, we now have the added element of steroids and other performing enhancing drugs. So, the term “historically speaking” in the world of baseball has taken on a whole new meaning. Do the stats of Bonds, A-Rod, Ortiz, Manny, Clemons and so many others really mean anything when compared to players who accomplished their stats with no more than a couple of beers and a pack of smokes?
In a similar vein, how do we then feel that we can do comparable statistical overlays between what our country is experiencing now and what it experienced in decades past? I am of the belief that we are comparing apples and oranges and that no one really knows how we will come out of this and when and what we will look like when we do. I have read scores of articles and listened to hours of “expert” testimony on the subject, much of it one expert reading the “tea leaves” completely opposite to his counterpart. Therefore, who should we really choose to believe anyway? Look at how the big banks are bragging about huge profits in the quarter after they received billions in bale out money. Does anybody really believe they are miraculously solvent again?
Whether we’re talking economics or baseball, I say take your history, flush it and start all over again.