Brace for double- or even triple-dip recession Like it or not, we are poised for another downturn in the economy. Given the lack of sustainable growth in the real economy, the fact that China’s economy is showing an increasing number of “weak signals,” and the IAEA’s recent report finding proof positive that Iran is building nuclear warheads, there may be more economic turbulence on the horizon in the short and mid-term. First quarter GDP growth will likely come in at something less than last quarter’s 5.7 percent. If it’s even less in the second quarter, then we’re technically in the long-dreaded “double-dip” recession, defined as two consecutive quarters of negative GDP growth. The effects of the “new normality” – unpredictable, intermittent spurts of economic prosperity intermingled with spurts of downturn – will become much more apparent if there’s a “triple-dip” recession, which could arrive as early as 2011 or 2012. Rather than grappling with how to deal with more frequent recessions, the Fed might instead seek to redefine recession, and consider that its current definition may no longer be relevant. John A. Caslione
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