Biggest Economic Loser? Not the U.S.

What recession?

The recession that started in 2007 ended in July or August 2009, according to Anirban Basu, the national economist for the Associated Builders and Contractors organization. He gave a speech last week with some dry humor and interesting facts that Americans should know to make them feel better about the situation.

In 1933, at the height of the Great Depression, unemployment stood at 25%. We are at 10% and Mr. Basu thinks it should peak at 11% – less than half of what happened seventy years ago. (Historic fact: The only way the U.S. got out of the 25% unemployment hole was FDR’s spending on things like roads and dams (and WWII, which spurred production). Without the stimulus spending going on now, after the entire economy locked up last year, we could have had come much closer to the unemployment pain that was felt in the Great Depression.

Who is today’s biggest loser? Not the U.S. is the short answer. The U.S. economy is down only 2.7%. Russia’s and Mexico’s economies are down over 7%! Japan’s is DOWN 5%, over twice our decline.
On the other hand, China’s economy is UP 8% and India’s is UP over 5% despite the global meltdown. Even Africa is UP 2%.

The two best job sectors in the U.S. right now are education and health care – both are adding jobs.

But that doesn’t mean we are “out of the woods.” According to Mr. Basu, we need to expand in the three “E’s” to stay ahead – energy, education and exports. That means we need to develop more efficient green technologies, sell more products overseas and produce more scientists and engineers-- instead of letting 50% of our high school kids drop out.

We are an example of the green tech revolution. My company’s sales increased over 500% from last year. I attribute that to it being a “green” energy saving/security technology (and a lot of marketing too). The trend looks good for next year, 2010, because saving energy is the key to our future and pays for itself over time. So is adding security to minimize damages from future storms or from break-ins.

Mr. Basu says that residential construction is accelerating in much of the U.S. (including here in Houston where home prices actually rose slightly in 2009, as it did in a few select markets). The first-time buyer tax credit is helping keep the housing market from falling, and a lot of jobs with it.

So, don’t feel bad – the economy is much worse if you are living in Russia, Mexico or Japan.

But China is still on a roll, producing those engineers and building a solar array that covers 25 square miles of Mongolia! It is building wind turbines. It is going to kick out butt if we just stay glued to the TV watching sports. We are producing “reality” shows that have nothing to do with reality and won’t give us the skills and technology needed to keep us in the lead in the 21st Century.