09/10/2010 06:25 pm ET Updated May 25, 2011

The Answer Is Blowin' in the Wind

Hey, where are Sherlock and Lt. Columbo when we really need them?

No, it's not to set us straight on the Hound of the Baskervilles or figure out who stole what or who murdered whom, but rather to zero in on a more perplexing mystery that impacts all of us -- the direction of the flip-flop economy.

The myriad of views on the subject -- which will have a major voice in determining the outcome of the fall elections -- is enough to drive anyone nuts.

For confirmation, just look at the financial pages of your local newspapers and leading business magazines. Or click on TV's financial networks. Or scan the research commentaries of the major brokerages and investment advisers. It's all the same. You're bombarded with a slew of wildly conflicting economic scenarios that will have you shaking your head.

For example, here's what the experts are saying, kicking off with those who insist a double-dip recession is inescapable. Some of their key reasons: the government's inability to effectively address the three most serious and critical economic ills -- the housing depression, high unemployment and the refusal of banks to lend on a broad scale.

In contrast, other economists vehemently disagree, insisting there will be no double-dip, certainly, they believe, not in an election year. The president's new stimulus initiatives to bolster the economy by creating jobs, notably tax incentives and infrastucture spending, should help speed up the recovery, they argue. At worst, they say, we'll see slow growth.

Then again, some economists argue that the recession, which started in late 2007, has yet to say goodbye and importantly is apt to worsen because of diminishing stimulus and excessive debt at the consumer and business levels. That means, they point out, consumption will weaken as consumers, especially the retiring baby boomers, opt more for saving then spending, and business will be reluctant to expand.

Meanwhile, a number of economists say the president's new economic-boosting proposals won't fly and are highly suspect because Republicans have no vested interest in seeing the economy improve before the November elections. Accordingly, Obama's economic ideas, it's thought, if not D.O.A. (dead on arrival), are almost certain to run into a Congressional stone wall and nothing will get done.

On top of this, two of the country's widely tracked economists, the New York Times' Paul Krugman and Merrill Lynch's former North American economic chief David Rosenberg, have recently told us we're depression bound.

Confused? Who wouldn't be? So who should we believe? The answer, of course, is that it's all guesswork, that no one can be cocksure of what's ahead because of all the bumps on the economic road.

For some thoughts, I rang up a voice of reason in this economic wilderness -- Standard & Poor's well regarded, astute senior economist David Wyss, a fella not prone to flamboyant and irrational comments.

For starters, he belittles the president's job-boosting proposals, noting they're not particularly good because they're only temporary. At best, he sees little more than a short term lift. The infrastructure spending should have been in his first bill, he says.

As for fears of a double-dip, Wyss doesn't see it. The recovery is fragile, but there's nothing to push the economy down more, he says. "We're having a half-speed recovery, nothing to get excited about, but it's better than none."

On the plus side, he points to a pickup in consumer spending. "Consumers are starting to stick their heads out of the shell," he says. Yet another plus is pretty good equipment spending, up 15% year over year.

Underscoring the slow growth nature of the economy, Wyss looks for uninspiring GDP growth of 1.6% in the current quarter, 2% in the final quarter and 2.4% for all of 2011.

What about those depression forecasts making the rounds? "No way, a gross exaggeration," Wyss says.

Our economic worry-wart also has his concerns, among them the threat of a major default, especially in Europe, and another freeze in the financial markets, with banks afraid to lend, an event that would further push home prices down and unemployment up.

Likewise, he points to the danger of a Japanese deflationary scenario, a formula for weak growth and declining prices. As a result, home prices in Japan are down 35% from where they were 15 years ago, while its stock market is off 75% from where it was 20 years ago.

All that aside, we're plagued by a number of serious economic ailments that suggest any economic bull at this point is likely full of bull. Among those that come to mind:

  • One in every six Americans is now getting some form of government assistance.

  • A total of 40.8 million of us -- expected to rise to 43.3 million next year -- are collecting food stamps.

  • About 78 million baby boomers, one eighth of the population, are headed for retirement with an average nest egg of just around $50,000.

  • About 25% of all mortgages are under water (meaning the homeowners owe more on their homes than they're worth). In addition, 4.2 million vacant homes (8.9 months supply) are looking for buyers, 7.3 million homeowners are at least 30 days delinquent on their mortgage payments, and another 4 million homes are in the foreclosure process.

  • Around 14.9 million people are unemployed, a figure that jumps to 25.7 million if you include part-timers who can't get full time employment and discouraged workers who've left the work force because of their inability to obtain a job.

  • On top of this, my wife, Harriet, who walks several miles a day, tells me the number of New York City panhandlers and homeless people sleeping on the sidewalks is appreciably on the rise. "You see them everywhere," she says

I don't know how you see all of this, but to me this is not what economic recoveries and bull markets are all about.

It all reminds me of a catchy song, "Blowin' in the wind", written by Bob Dylan in the sixties, a period when the nation was caught up in the Vietnam War and people were looking for answers.

Alas, we're now once again looking for answers.

What do you think? E-mail me at