Shrinkage

The US economy finally got back out of the pool yesterday and boy was the water cold. The US economy shrank last quarter by 3.8%, the largest drop since 1982. So technically it isn't the biggest drop in my lifetime, which means Bush can mark it on his "Things I Done Good" list: '3. Only the 2nd biggest GDP collapse in the lifetimes of the 30 & under set'. But for those of you saying "Only 3.8%, that's not that bad. Could be worse," well you must have a crystal ball, because it is worse.

Although the initial result was better than economists expected, the figure is likely to be revised even lower in the months ahead and some believe the economy is contracting in the current quarter at a pace of around 5 percent. The current January-March period, they said, will probably turn out to be the worse quarter for the recession.

"The downturn is intensifying. The fourth quarter is worse than it looks," said Mark Zandi, chief economist at Moody's Economy.com.
...
A build-up in business inventories _ which in calculating GDP adds to economic activity _ masked the fourth-quarter's true weakness. When inventories are stripped out, the economy would have contracted at a 5.1 percent pace in the fourth quarter, closer to the 5.4 percent drop that economists expected. Businesses couldn't cut production fast enough in response to waning customer demand and got stuck with excess inventories, economists explained.

So as everyone is sarcastically pointing out today: we're living in 1982. E.T., DeLorean's, Return of the Jedi next summer, and we're a full two years away from the Karate Kid. At least our hipsters, with their oversize glasses, striped tube socks, neon jackets, and other various American Apparel sundries are properly dressed for our times.

It's like the new season of Lost, we're all time traveling now. We've just visited 1982, soon we're get to visit the Depression era, then the Middle Ages. Wave to your grandparents, the Kaiser, the Visigoths, and Sir Thomas More! The Visigoths will be especially surprised to learn society's standard of living hasn't increased by 2010, that is if they take the time to stop raping and pillaging us to notice economic figures. Buck up, the worst is yet to come.