[OPE] The Optimism of a Double-Dip

From: michael perelman <michael.perelman3@gmail.com>
Date: Fri Jun 03 2011 - 11:58:44 EDT

A crisis is the method by which a capitalist economy partially purges
itself of the effects of past mistakes while imposing misery on the

Economists often characterize the outcomes as by the shape of letters
of the alphabet. A "V" indicates a quick collapse and an equally
quick recovery. "L" suggests a collapse followed by a very weak
recovery. And a "W" indicates a double-dip in which the quick
recovery is followed by another collapse. Ironically, our previous
president was known as "W" will and our present president could be
known as zero, which approximates the first letter of his last name.

A V-shaped recovery suggests that the economy was fundamentally
strong, allowing the economy to quickly pick up steam. A W-shaped
outcome is a telltale sign of an economy that was leaked to begin
with, propped up by external support, which was withdrawn prematurely.
  For example, Roosevelt succumbed to outside pressure in 1937,
leading to an expected setback. Under far less pressure, Obama
followed suit.
Read more at:


Michael Perelman
Economics Department
California State University
Chico, CA
530 898 5321
fax 530 898 5901
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Received on Fri Jun 3 11:59:39 2011

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