Recessions, until the last 20 years, tended to huddle together for warmth. The last recession was rewritten to be shorter by the NBER, but had many of the characteristics of being a double dip recession, or one very long recession. The odds of a recession this year are approaching unity, because George W. Bush does not want to deliver fiscal stimulus to Democratic constituencies. That's really when expansions end, when one of the players would rather not take the consequences of continuing the expansion. In 2000 that was Alan Greenspan, this time around, it is George W. Bush.
It will be a shallow recession, because of the vast monetary stimulus being used to prop up US housing, and the global desire to keep the resources boom, the flip side of a resources bubble, in place. This means that inflation will not be broken, and very shortly after the end of the present recession, which will be made worse by the ending of Iraq based stimulus in the short term, we will be back in an devaluationary crisis similar to this one. There is not enough investment supply: that is a stream of businesses which will pay the natural cost of money. There is too much investment demand chasing too little supply, which means real returns must fall, except in those limited areas where there are resource benefits. Lack of Investment Supply. Put it on your wall and frame it.
Of course, the Republicans will find a way to blame this on either the Democratic majority in Congress or the incoming Democratic president...
