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 Recession
or Not?
The Answer Lies in the Physics
by Sandra Noble, President
Noble & Associates Consulting,
Inc.
Economics and physics are generally regarded as vastly different
disciplines. Many are recognizing the convergence of quantum physics and
theology. Can quantum physics also explain the current US economy?
Definition:
According to macroeconomics, a recession in the United States economy is
defined as two consecutive quarterly declines in GDP (Gross Domestic
Product). The GDP is a dollar value that is representative of all the
goods and services produced for a given period of time. Its purpose is
to indicate the financial strength and health of the country.
US Fourth Quarter 2007:
Financial industry profits fell $104.6 billion annualized. Non-financial
industries' profits fell $30.7 billion annualized. Corporate after-tax
profits fell $37.9 billion at a quarterly rate of 3.3%. But despite the
quarterly decline, corporate profits after taxes are up 3.3% compared
with a year ago. And the U.S. economy, as measured by GDP, grew at a
0.6% annual rate, the slowest pace since late 2002.
But the operative word is "grew". Believe it or not, we have yet to have
one quarterly decline in GDP. Companies and institutions are losing
money but the overall US economy is healthy and growing.
State Economics:
So, let's move down to the state level. I lived in Cleveland, OH for
many years. Ohio has been hit hard by the non-recession. Ohio and other
similar high take, high labor union states are losing jobs and
population. These states tended to not have had the housing bubble that
other states have enjoyed. The high unemployment rates have caused the
increase in mortgage defaults and foreclosures. So the mortgage crisis
in the country has a greater negative impact in states like Ohio.
Housing prices have gone from steady-state to a decline. Hence my
friends in the Ohio would find it more difficult to be bullish on the
economy.
Personal Finances:
Then on a personal level, many are convinced that there is a recession.
There has been a significant reduction in the amount of disposable
money. Consumer spending is down, at least for me and most people I
know. Tears came to my eyes the first time I saw $3.25 per gallon at the
gas pump. I have since seen even higher prices. So those of us
struggling to make ends meet are at the lower levels of Maslow's
"Hierarchy of Needs". Our focus is on putting food on the table, keeping
a roof over our heads, and having gas in the car so we can get to work
and earn a living.
Relativity:
According to quantum physics, nothing is real unless it is observed and
outcomes are influenced by the observer. This conforms to conventional
thinking about what relativity is. It all depends on how you look at it.
Two people can look at the same situation and draw different
conclusions.
One of the tenets of Albert Einstein's Theory of Relativity is that
outcomes are the same for all observers. However, the theory also
indicates that two simultaneous realities exist at the same time.
Reality:
So yes, the US economy is still growing, however slowly it may seem. But
the other reality is that many people are seeing and feeling a recession
in their personal financial situations. Bank loans and access to capital
are more difficult for companies to obtain. And the forecast for many
business industry sectors is bleak.
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Sandra Noble MBA, CPIM, DCFS,
CDP, Six Sigma, is president of
Noble & Associates Consulting which specializes in IT Needs Assessments,
RFP creation, unbiased software selection assistance and we're the cure
for Post Implementation Distress™. We also have full life cycle
implementation expertise in SAP, Oracle and other enterprise-wide
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Reducing the
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Noble & Associates Consulting specializes in I.T. Needs /
Strategy Assessments, unbiased Software Selection assistance, and curing
Post Implementation DistressSM. We also have full life cycle
implementation expertise in SAP, Oracle and other enterprise-wide
software solutions.
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