Commercial Printing Outlook: Forecasting a U-turn

When the job losses start to slow, as they have been, the mindset of the employed changes from the paralyzing fear that they will be next to go, to a level of comfort that allows them to consider big purchases (entertainment centers, cars, homes, etc.). As consumer spending and demand first stabilize, then inch up, companies stop making cuts and then start to expand hours worked before, finally, beginning to hire.

Davis is already sounding a cautionary tone for the just slightly longer term outlook. "I see it as the country moving into the eye of a hurricane, with relative economic calm for the next couple years, before some of the problems associated with what we've been doing for the past year or so come back to start haunting us. We are going to see very weak U.S. economic growth for the next decade or so after 2012.

"That is when what I call 'economic sclerosis' will set in and hold down the rate of economic growth to 2 to 2.5 percent which, over the longer term, means we are losing a lot of wealth creation," he contends. The increase in debt and bank reserves that should lead to a healthier 2010 and 2011 could bring on tax increases and new regulations that handcuff growth in the future, Davis believes. PI