The Economy: Brown Shoots
You have probably read the term "green shoots" as related to the economy. This, of course, is a term that means the first signs of growth after seeding. What is making economists nervous is the fact that many key growth indicators are either mixed or unstable.
I refer to this situation as "brown shoots." You can seed and fertilize all you like, but heatwaves and droughts can still wreak havoc on your lawn. The grass is there, but the tint is an ugly brown. Even as it grows, it isn't pretty.
This is what I see happening to the economy right now. Obama, the Fed, etc, have done everything they can (short of taking extreme measures that could rip the country apart) but the reults remain tenuous. Let me tell a personal story that I think best reflects the situation.
Two things happened to me recently: the economy tanked and my student loans capitalized. I reacted in the usual way. First, I made financial cutbacks. Second, I began to pay down debt. Third, I began to pay down debt.
These things worked well for a while. The cutbacks and savings actually offset the debt reduction to the point that I could spend a little more. Rent a movie here, eat out there. No big ticket items, of course, but spending nonetheless.
Then my son lost his job. So I dipped into the savings to keep his rent and utilities paid until he found a new job. At the same time the little spending that I did dried up. After a few months he got back on his feet and things went back to normal, not the old normal, but the post-recession normal.
Shortly thereafter my daughter lost her home to foreclosure. Again, I dipped into the savings until she could, as a low-income worker, get into HUD-based housing. It didn't take long to find out that HUD is massively under-funded and so I had to borrow in order to get a roof over her head, as well as her three children.
So now I find myself back to square one. The savings are exhausted, all of the repaid debt has been replaced with more debt, and all disposable spending is slashed.
My gut tells me that the situation is the same across the country. It may not be helping out kids. It may be a job loss, or a health care emergency, or a foreclosure. Our best case scenario, at least for the short-term, may be two steps forward and one step back at best, the reverse at worst.
At the very least, this may help explain the current mixed indicators in the economy as a whole.











