On this Fourth of July weekend, there is much to celebrate about the wonders of the greatest economy on earth — home to Hollywood, Apple, Google and a broad array of biotech companies on the cusp of innovations that hold the key to attacking cancer and heart disease in the years to come.
America is also home to startups such as Uber, an idea that turned into an $18-billion venture: a car service manned by independent drivers like Miguel, an immigrant from the Dominican Republic, who will send his daughter off to Dartmouth College this fall.
That’s the American Dream, and it still exists.
We should embrace it in its many forms.
Unfortunately, dreams are far easier to attain in a high-growth environment, as any baby boomer can tell the less-lucky millennials.
That’s because despite all the noise about Dow 17K, the GoPro IPO, an uptick in housing sales and a stronger-than-expected jobs number, the fact is that the odds of recession are far greater today.
And you don’t have to be Nate Silver to come to that conclusion — we’re already halfway there.
The National Bureau of Economic Research (NBER) broadly defines a recession as two quarters of negative growth, and the negative growth in the first quarter was a doozy.
The economy contracted by 2.9 percent in the first three months of 2014, dragged down by anemic consumer spending.
Since expectations were for a 2.6 percent increase in GDP, the economy woefully underperformed.
Need more cause for concern? The current recovery, if one wants to call it that, is extremely long in the tooth.
Since 1945, the average expansion has clocked in at 56 months; the bounce-back from the Great Recession is now 62 months old.
For now, the stock market is betting on the good news, while ignoring the bad. But Wall Street is a fickle barometer of the economy.
Yes, this holiday it’s probably prudent to hope for the best but be prepared for an economic slowdown.
In other words, American optimism tempered with pragmatism.