Time to find our next Manifest Destiny
By Dave Chen
Equilibrium Capital Group
It feels like America is at a crossroads — or maybe it's a plateau.
In many ways, this recession is more about a set of structural changes taking place in our country. In many ways, this recession is going to focus our attention on American expectations, our way of life, our standard of living, our role in the world. I say "going to" because none of our political leadership wants to lead us in this discussion and paint a vision towards our Manifest Destiny of the 21st century.
America's greatest strength is our sense of expansive opportunity and willingness to tear up the status quo and just build something new. The challenge in this century is that there are now several nations with that same culture and energy. Our greatest weakness is that we've lost our sense of sacrifice for the better whole. Our challenge is that the citizens of several of our competitor nations are collectively feeling this sense of national pride and destiny.
Let's step back and look at our economy:
• The labor market is stuck. This high unemployment and "stuckness" reflects a systematic dislocation of skills and geography. The U.S. Federal Reserve is finally willing to admit the 2009 recession recovery could be much more like the 2002 recession recovery in terms of the "slope of curve," or rate of recovery. In other words, a five-year recovery to improve they unemployment rate by 5 percent. There is a darker scenario that says this could be a 12-year process.
• Consumer spending is still down, reflecting unemployment, the loss of home value, and coming down off our historically high household debts using credit cards and home equity loans. This is going to take a long time.
Dave Chen is the founding principal at Equilibrium Capital Group of Portland.
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