Talk show hosts and their viewers had a good laugh last week when the National Bureau of Economic Research, the referee of the nation's economic condition, ruled that we are in a recession - a fact that seemed more than obvious to most Americans. But by the time the week ended, it became clear the worsening state of the economy was no laughing matter. Grim news of cutbacks in construction, home sales, consumer spending, business investment and exports were capped by a report Friday that unemployment had risen to 6.7 percent. Since the recession began last December, nearly 2 million jobs have been lost, most in the last three months.
In Maryland, Constellation Energy Group said it would be shedding 800 jobs and money manager Legg Mason announced an 8 percent cut in its work force. The recession now appears likely to continue through 2009 and beyond, promising to make it the longest since the Great Depression. And the economic crisis is hammering countries around the world from China to Pakistan to Great Britain, bringing with it significant political uncertainty.
This nation is now in its steepest economic decline in modern times. It is crucial that we try in every way possible to stop it.
That means that the scale of the economic recovery plan being contemplated by congressional leaders should be expanded. The Treasury Department must quickly implement efforts to provide significant aid to the millions of beleaguered homeowners facing mortgage foreclosure in the coming year. Congress must put aside its doubts about the future of the automobile industry and agree this week to provide assistance that will keep GM operating with tight controls and mandates for significant cutbacks in coming months while a new president and a new Congress help decide its long-term fate.
The latest unemployment statistics underscored the scale of the emergency. The so-called underemployment rate jumped to 12.5 percent from 8 percent in October. These are people working part time who want to work full time. The 12.5 percent is the highest level of underemployment since the statistic was first compiled in 1994.
Marylanders have long been sheltered from the worst of past economic storms because of the state's significant employment in government, health and education. But the lack of adequate credit for small businesses and for consumers to buy homes or cars will likely force significant cutbacks in service industry jobs here. And declining sales and real estate transfer tax revenues will threaten public services.
Businesses in Maryland with significant financial reserves should resist the impulse to lay off workers in the face of the current turmoil and instead seek opportunities for growth. Individuals with ample resources should not hesitate to purchase things they need. Those who lose their jobs should consider new career paths, possibly in growth areas such as health care. How we act through 2009 will likely determine the severity and duration of the recession in 2010.