How long will this ‘recession’ last?

There are many conflicting opinions regarding the length, depth and difficulty this ‘recession’ will cause us all, and after reading what the experts say I report to you as follows:

The academia, the economists, hedge, suggesting that this recession will last at least through 2009-2010, but they say this also depends upon what actions our government takes to shorten it and now the huge impact the world financial markets will have on our recovery, as they too have a tremendous impact on what happens in our financial markets in the states and they are crashing along with us. These factors will influence the length and harshness of the recession.

It is said that if our government continues to make the investment in supporting our economic engines we will be out of this in a few years.

Unfortunately I disagree for the following reasons. Unemployment will continue to rise as more and more jobs will be eliminated. This year alone we lost over 750,000 jobs so far with much more shrinkage coming.

Once gone, rebuilding the workforce to reflect the previous economy will either take a long time to accomplish or in all likelihood will never happen.  Once gone, gone forever. Different people will be filling different jobs during the recovery and this will take time to develop. Thus I believe the financial down spin can be reversed in a few years, but it will take 5-10 years to rebuild back to where we were at the first point of decline.

Further, the second influence which will help determine the duration of the ‘recession’ is the enormous impact and influence the condition of the world’s financial markets has on the USA. It is very substantial, in both directions, our influence on the world and the worlds collective influence on us. This is more unpredictable, and there is likely to be mixed results amongst the countries with the most impact. Some will be more successful then others. Some will do allot worse. Thus, the overall impact will be an accumulation and average of all the various degrees of success and failure and thus will overall stretch the recovery period for the world, including the USA, out further then the two years we all would like.

If every country succeeded in stemming their economic decline as fast as possible we could be out in 2 years but this will not happen. This will slow the USA recovery down for many more years.

Of course there is also the question of what our government actually does to reverse our economic down spin. If it implements the correct strategies we all win and  this will end the decline sooner. If they guess wrong, and it is a guess so it seems, we stay in recessionary economics for many more years to come.

Given that wager, I will bet our government leaders will not make the best moves all the time and this will extend the economic downturn and slow the recovery period for a long while.

Fixing some of the other major issues in our economy will also be required to successfully exit this recession and will take  time and effort as well as a huge investment, as well as political leadership and success. This includes defining and implementing  a viable energy policy. Defining  and implementing a workable health care strategy and overcoming the political issues preventing its resolution to date.

Additionally required will be the repair of our social security program so our elderly will enjoy a respectful contribution to their retirement. Just to name three major issues we are facing which require repair for the economy to rebound as soon as possible, or it will stall for as long as necessary until these issues are resolved. My guess is this will take allot longer then two years to accomplish all this irrespective of who wins the White House.

Thus I say  you must prepare for a five to ten year cycle. Long enough so we cannot look back. We must look at today’s condition and understand that this is what we will be working with for the next five to ten years as we slowly pull out and rebuild to get back to where we left off, with different economic engines, a different work force, a different energy policy, a different health care system. Five to ten years folks, so start today.

Begin adjusting to the next era. It started  a while ago, it is in control now. Get on the path and survive.The times demand change… or perish.

We must recognize this as a huge change of direction and everyone must use this define a new way or they will be lost forever. Yes this is not just a speed bump we can wait for it to pass, its an absolute change in the way we will be doing business for a very long time.

My best advice for small business owners is to re-evaluate your core business equations and  force profitability immediately making whatever changes are required,  under toady’s circumstances whatever they may be and focus on long term permanent changes that will reinvent yourself.

Call me,  you will need help working through this. 413-584-2581. Norm will arrange a no obligation teleconference for us to discuss your options.