The only person actually rooting for a recession is Magner, and that's just so he can finally be right after all these years. -g-
What I am rooting for is that the powers that be to finally take a close, hard look at reality, instead of trying to pretend that the situation is rosy.
>>As Consumers Turn Pessimistic, Factory Workers Feel the Chill<<
By DAVID LEONHARDT
For much of the last two years, the
Frigidaire washer-and-dryer factory in
Webster City, Iowa, could barely keep up
with demand. The work force in the squat
building — just off the Boone River, close to
Iowa's geographical center — had increased
since 1998 by about 700 people, or nearly 50
percent, and the company continued hiring
new employees as recently as early in
November.
Then everything seemed to come to a halt.
Consumer purchases of large appliances,
which had leveled off during the summer,
started dropping. In Webster City, overtime
hours disappeared, employees say. Soon after
Thanksgiving, Frigidaire announced that it would lay off 130 workers
almost immediately. Last week, plant managers told workers that 28
more people would lose their jobs before the end of the year.
"When you're pushing all year long, and you've got foremen riding you all
year long to push things out the door, it comes as a shock," said Kim
Willson, a 15-year employee who has kept her job but now works fewer
hours.
Over the last month, similar kinds of shocks have reverberated from
factory floors to executive suites to the office of the Federal Reserve
chairman, Alan Greenspan. As the economy has sharply slowed, the
manufacturers have been hit hardest, in part because consumers have
grown far more hesitant about making large purchases like appliances,
cars and personal computers.
Many of the main culprits — tighter credit, higher energy costs and falling
stocks — have been hampering the economy for much of the last year.
What has changed in recent weeks, economists say, is that Americans
have suddenly become more pessimistic about their job prospects in
2001, despite an unemployment rate that, at 4 percent, remains near a
30-year low.
With this pessimism comes the risk that spending will fall further, requiring
companies to reduce excess inventories and cut their payrolls — a
situation that could potentially snowball into something much worse.<<
nytimes.com
Now, is it true that the only thing that's changed is consumer sentiment? Does that make sense to you? Or is it that the Fed got worried about inflation, has quit expanding credit at a breakneck rate, the credit market is tightening, and the chickens are coming home to roost? |
