The recession is now 14 months old. No financial analysts believe it will end before mid-2009 and most believe it will extend to mid-2010. So, it will be the worst economic downturn since the Great Depression of 1929 to 1933 (43 months long). Americans believe it will last two years or longer (see CNN poll). President Obama has some time to make an impact, but 2010 will likely be an election on the effect of his economic proposals.
The real challenge is the sense among voters that America is in a long-term decline. Obama tried to address it in the inaugural when he said we remain inventive and productive and “Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.”
Steve Ballmer, when announcing Microsoft’s layoffs, described America’s new economic landscape best when he said this is not just a downturn, but a re-calibration of America’s economy at a lower level due to the removal of leverage. It will be long-term.