DOUBLE DIP? – The man on the street knows better

Late last month official bean counters in the US pulled out their beans to tell the world what the man on the street always knew – the 2008 recession was much deeper than was originally thought to be and the recovery perhaps imaginary.

A walk down the streets of New York would have revealed the truth that everybody knew. Recovery, if anything has been feeble with output still lagging behind the pre-recession highs, jobs still elusive despite the talk of recovery and customers still shying away from shop windows.US growth data release on July 29th showed industrial output has grown just 1.6% over the past one year and growth over the past six months a mere 0.8%. The much expected bounce is missing. Knowing this, that the first downgrade in history by Standard & Poor’s of the US credit rating from the top-notch AAA to AA-Plus should have taken the world by surprise is itself a surprise. Once again, the experts are raising the specter of the double-dip and in the wake of these doomsday predictions pulling down sentiment across the board.

Would US recover fast enough and regain its lost glory? The Eurozone too is facing its own economic travails. But a similar walk down the streets of large European cities like Vienna for instance, tells a different story.

There are no distress or discount sales and the teeming tourists are still paying out top Dollar for everything from T-shirts to curios and souvenirs unlike in New York. But the rot in the Eurozone, if news flow is anything is to go by, is much worse than in the US. First it was Greece, then followed Ireland and Portugal. Now it is Span and Italy which are said to be in trouble.

But then, should the world be getting into a tizzy over the news? If you ask me, it will be business as usual with the man on the street already accustomed to the slowdown and habituated to the pain.