Business Week‘s Michael Mandel has this to say about the economy’s apparent resilience:
[W]e now may be in a world of mini-recessions–sharp falls in one or two sectors which do not pull down the whole economy. Think about the different parts of the economy as being connected by springs (or slinkys, if you want). A sharp drop in one sector–say, housing–may pull down a couple of adjacent sectors, such as furniture. But the rest of the economy steams on, and maybe even accelerates, as resources are transferred from the weak sectors to the strong sectors.
There’s clearly something to this: The recessions of the past 20 years have been much shallower than those that went before, and the boom years less spectacular. I would still worry that if the housing downturn is part of a larger retrenchment on the part of wildly overindebted American consumers, we’ll get more than a “mini-recession.” But maybe I should just think more like a real American and look at the bright side.