What Recession?

The National Bureau of Economic Research is meticulous about accuracy in calling a recession. Consequently their anointment has no real predictive benefits because by the time they decide it was a recession it’s usually over. Harry S. Truman once famously quipped that a recession is when your neighbor loses his job, a depression if when you lose yours. The pundits are now claiming a recession is likely. A supposed horror in an election year, the politicians are falling over themselves to write checks to everyone to keep us spending. That’s a great plan; take the money away from productive uses in the first place and then mail back 40% of it to us after you’re done making Washington’s payroll. And some are linking the coming recession to the housing slump. Supposedly, when prices were high we all mortgaged our houses so we could buy a flat screen TV and a beemer. Now that house prices are not rising, we have nothing to spend. But the Buzz has always thought the Valley recession–resistant if not downright recession-proof. One of the miracles that is Silicon Valley is the incredible number of very intelligent people who have been recruited here. Sure many get out when their IPO hits, but there are a lot of very smart people still here. Yes, we mean you gentle reader. And we know that the smart people who make up our community are always working on the next thing. On top of this, venture capital does not fund what is now; it is generally looking for what is next. Just because housing prices have stalled or, God forbid, declined, does not mean that there aren’t a million new ideas being hatched every day. Of course we’re lawyers so none are coming from us, but we know that you have the next great idea. So, what are you waiting for? When the depression hits and YOU lose YOUR job, get cracking, give us a call, and start that business you’ve always wanted to start.

-- Paul Marotta