The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Economic Recovery Will Take Shape One Of Three Ways

On August 17th, 2009, posted in: Uncategorized by

I was on the LUV airline recently. Southwest Airlines is a great American story – one complete with an eccentric founder (a business genius) as the protagonist, and a host of devilish antagonists over the years: other airlines, government legislation, a naming argument, volatile fuel prices, September 11, and most recently, the economy. Through it all, this great example of American ingenuity has not faltered in its outstanding service, awesome people, great pricing and great community citizenship. Yeah, they are a national entity, but each community they locate in is better off for it. One could do a lot worse in choosing a company as a model for success.

A sign in the LUV gate area of my most recent flight said it all as it relates to the current antagonist – the economic tsunami. It read: “It’s About Time Somebody Punched This Economy In The Nose.” It was a Sunday morning, and my response was “preach on preacher.”

I think we are all anxiously awaiting the recovery. It’s painful to watch folks hurting. Interestingly enough, the recovery will take shape in one of three ways…either L, U or V. While punching the economy in the nose is the action voiced by our friends at Southwest, the tagline LUV speaks to the type(s) of recovery that may occur.

An “L” recovery is my least favorite option, but an extremely likely one. If the horizontal line in the letter “L” represents the economic recovery, you can discern that the base of this magnificent letter “L” doesn’t turn upward anytime soon. If we were to extend the base of “L,” infinity would be the destination. In other words, our economy would just plod along at this economic low-point without any upward turn. A “jobless recovery” is what happens along this horizontal track. In other words, there would appear to be no indication of job creation and, as a result, no upward improvement. Let’s hope not.

A “U” is a much better choice. The key to a “U” recovery is that the low point is finite and will eventually turn north to the benefit of us all. Yeah, there’s some continued pain in the base of the “U,” but job creation and economic rebound would be evident and forthcoming. Cheering for “U” is a good thing.

The “V” recovery is rather unlikely. We’re probably past this point. Note that this type of recovery is highly favorable as the American economy spends no real time at the bottom. We touch the low point and instantly begin the recovery. Jobs are created, consumers start spending money, and the momentum of such an upward paradigm shift is maintained. BOOM…we’re out of this mess relatively quickly.

So what’s your guess? You’re as qualified as most. I read the opinions of “economic experts” who are surprised every day as they attempt to reach their conclusions of what’s going to happen. Hang on. St. Louis Community Credit Union is here for you – whatever the letter: L, U or V!

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