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The "green shoots" theory of economic recovery is starting to look a bit like the herbs in my back yard--the ones I forgot to tell Peter to water while I was in Omaha.  Retail sales fell again, despite confident proclamations that consumers had rethought their overreaction last fall.  And foreclosures hit another record, which was oddly described as a "levelling off" by a lot of papers.  The March numbers showed a big spike, because legislative and corporate moratoriums expired.  In that context, a 1% increase in April isn't a "levelling off"--it's extraordinarily worrying.

I don't want to push the Great Depression analogy too far, but what's surprising when you go back to primary sources from 1930 is the optimism.  I don't mean to imply that everyone thinks things are just swell.  But while you know that they are facing the worst economic decade of the twentieth century, they don't.  They're expecting something more like the recession that followed World War I.  People are cutting back, but they're still spending, particularly because companies are slashing prices to move inventory.  It was the long grind of the years that followed, and the catastrophe of the second banking crisis, that scarred them permanently.  And this shows up in the economics stats and the stock market, which did not, as we like to imagine, simply decline in a straight line.

That may not be our story--crises are sui generis, the Fed and the feds have certainly opened up the taps as wide as they can go, and we may have a quick recovery, or something more like Japan's twenty year "lost decade".  But it does give the lie to the notion that any change in the second derivative necessarily marks the beginning of the bottom.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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