According to a recent poll by the Wall Street Journal, more than 70 percent of economists surveyed believe the U.S. economy is now in a full-blown recession. For the past year, it seems that many in the media have been afraid to utter the much-feared R word, as if speaking it were breaking some sort of taboo. Now, the taboo is disappearing, and we are facing up to this elephant in the room. Of course, installers don’t need the Wall Street Journal to tell them the nation is in a recession. They’ve been on the front lines all along, facing the problem every day - new home construction has fallen to the lowest level in more than a decade.
To make matters worse, homeowners
are faced with the prospect of shrinking home values, which has impacted the
remodeling market, a traditional respite when new home sales slow. Lenders have
also tightened their borrowing criteria in response to the wave of foreclosures
sweeping the nation, which makes it more difficult to borrow against equity for
home improvement projects.
The federal government has responded
to this situation with a series of interest rate reductions and a sweeping
economic stimulus plan that includes rebate checks, but only time will tell
whether these measures will increase consumer spending as intended.
Recent polls indicate that consumers
are more likely to use the proposed rebate checks to pay bills or put in
savings, which is hardly surprising given the gravity of the situation. In the
end, it may take much more than rate cuts and rebate checks to turn things
As the ongoing presidential
primaries have shown, it is the economy that is foremost in the minds of
American citizens, ahead of much-touted issues such as terrorism and the war in
Iraq. Several candidates have mentioned a repeal or re-negotiation of NAFTA,
which many feel has been a precipitating factor in this recession.
In light of the phenomenal economic growth that China and
India have experienced during this time, it would be wise for us to consider
adopting some of their protectionist economic policies. Regardless of which
candidate wins the presidency, he or she will face the daunting task of turning
around this stagnant economy. Not since Reagan took office has a president
faced such a huge task; let’s hope that this new administration will be up to