We have seen enough data now, that there can be no question that we are in the midst of a recession. Yet there are still those who would so desperately wish to pretend away the inevitable, like a squeamish child being dragged kicking and screaming to the dentist to have a rotten tooth pulled. I say welcome the recession. It may be bitter medicine, but it's needed. The economy goes in cycles. You can't get the gain cycle without the pain cycle. You can't have the crazy party without having to clean up the shit the next morning.
There HAS to be a pullback in consumer spending. It is necessary and it is healthy. Consumers need some time away from buying, buying, buying in order to reflect on their dismal financial situations and start getting their financial house back in order. Banks, apparently, need the money more than anybody. They would get the money if consumers would start saving - putting their money into the banks instead of constantly borrowing from the banks to spend their way into bankruptcy or foreclosure.
It turns out that all along the bubble that nobody was talking about was, in fact, the credit bubble. There was eventually nowhere left to hide the glaring shortage of, well, money. Real money! Not merely vacuous financial instruments - the equivalent of financial snake oil, the likes of Collateralized Debt Obligations and Structured Investment Vehicles, that turned out to be no more than glorified rugs under which to sweep the underlying problem. There were no more ingenious instruments of indirection that the wizards of the financial sector could use to obfuscate the truth of nomoneyness.
So, here we are now, in a recession. The sooner we just accept this and figure out how to survive it, the sooner we can get through it in one piece and put it behind us. Accept the ill, and swallow the pill!
Bush, Congress Find Economy Is Pushing Them Toward Compromise