Economic Conditions for Turnarounds Should Improve in 2009 and 2010

Abstract

The author of this article recommends reading the book Manias, Panics, and Crashes: A History of Financial Crises for reassurance that the likely future path of the U.S. and world economies is up. The book teaches that booms and busts have happened repeatedly, and that economies always come back stronger than before and sooner than most people expect. Monetary and fiscal stimuli cause an end to the panic, a stock market boom, and strong growth in the real economy. If the monetary stimulus is removed quickly after the boom, steady growth results. If not, then inflation and another recession ensue. The author expects the authorities to engineer a successful turnaround for the U.S. and world economies, which will be good for private turnaround managers.