Happy Days are Here Again?

Thanks to Wikicommons.

It’s spring again!  Flowers are blooming, the sky is blue, the birds are out singing, and the US Democrazy staff is stuck inside attempting to win next years Pulitzer Prize (since we failed to this year).

Sadly, the economy isn’t matching the weather; or is it?  Perhaps economic “green shoots” are starting to blossom?

With the Dow Jones Industrial average closing above 11,000 yesterday, the first time in 18 months, many voices are coming out declaring we’ve defeated the economic collapse.

Leading the charge Daniel Gross, writing for Slate and also Newsweek, proudly trumpeted that

America is coming back stronger, better, and faster than nearly anyone expected—and faster than most of its international rivals.

He continues to describe that the recession has changed America’s economy meaning

There will likely be fewer McMansions with four-car garages and more well-insulated homes, fewer Hummers and more Chevy Volts, less proprietary trading and more productivity-enhancing software, less debt and more capital, more exported goods and less imported energy.

Over at the New York Times, Floyd Norris agrees noting that we’re not out of the woods yet but

many Americans — both individuals and businesses — who cut back sharply when fear was at a peak a year ago are now finding that they overreacted.

But don’t get too excited. Although hope is often a good thing for growing economy (more investing and less hoarding) The Economist’s blog, Free Exchange, reminds us,

optimism could be dangerous if it leads the country to underestimate its continued vulnerabilities—to new financial shocks, to new shocks to household budgets (as from rising resource costs), to new deterioration in housing markets, to continued drag from an unemployment problem that remains very serious.

To help us keep our feet on the ground Mother Jones’ Kevin Drum has ten reasons why the economic misfortune may not be done yet (see the link for the full list).

2. In fact, there won’t be any further stimulus from lower interest rates. They’re already at zero, and (Fed Chief) Ben Bernanke has made it clear that he doesn’t plan to effectively lower them further by setting a higher inflation target.

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4. The financial sector remains fragile and there could still be another serious shock somewhere in the world.

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10. Unemployment and long-term unemployment continue to look terrible. Yes, these are lagging indicators, but still.

Now one thing is for sure.  Even the gloomiest bloggers are far cheerer then we’ve seen in the last couple months, so maybe the worst is over?  Or maybe we’re in for a double dip recession.