Hopeful word is being spread that the recession has bottomed. Too often that comes from self-serving politicians, especially those that claim the "stimulus" saved us. Frankly, to the latter, I can't see how anyone with a straight face can make any such claim. Even now, most of the stimulus has not been spent. Most of that spent wasn't toward the creation of jobs, no matter the Keynesian claims. And there's not much to brag about if you spend millions to create a job. It takes many, many, many jobs to pay the taxes for that one job. You take money from thousands to create one job and that will stimulate the economy? Loan sharks are more humane.
 
As unemployment continues to climb, there are those that wish to celebrate that the increase is slowing. Of course, it's slowing! As there is less of a pool to be unemployed, it will slow. There are recession-proof jobs, especially government jobs, that limits how many unemployed we would see in any recession. A slowing to claims can give some optimistic hope but it's not "the recession is over." Contrary to all the claims, we aren't anywhere near as bad off as the Great Depression. This recession is much more akin to the one that followed Jimmy Carter.
 
Jobs will be the true measure of when the recession has turned. As the Chairman of Office Depot, Steve Odland, said last weekend:
 

 
What we've seen is that this sector — the small business customers — have been hurt disproportionately in this downturn, because housing is a traditional source of liquidity for these people. They start their businesses with a second mortgage. They fund them with home equity lines of credit.
 
And as that credit has dried up, these businesses have not been able to recover. So we went off a shelf last year, and I feel like we're rocking around down here at a bottom, but we're not seeing a meaningful recovery at this point, and I'm worried that we're not going to until the liquidity returns to the small businesses. ***
 
Well, you know, the stimulus money has not gone to small businesses. This is an unusual recession in that it's been banking-led and housing-led. And so as these sources of cash have dried up for small businesses, they haven't been replaced by stimulus money or any other money.
 
The issue here is that every modern recession is led out by the small businesses as they create jobs. So all net job creation happens in small business. In this case, we're not going to see a job rebound until we see these small businesses get more access to liquidity. [Emphasis added.]
 

 
All of this has to be of mind when we consider the next few years of our local budgets. The housing and commercial markets have seen strong decline in value, where the city draws much of it operating budget through property taxes. Our Budget and Research Dept has rightly projected the current decline over a five-year (or longer) period, using models of previous recessions. Once values have reached bottom and we start the decline out of the hole, we will have three years or more before we are back to ground level.
 
We cannot be overly optimistic and throw away caution. One Dallas Council member argued the same thing last year when they were adopting their budget. She advised lack of caution would lead to mid-year corrections and a harder budget this year. She was proven correct. They had to to make the mid-year correction, had to cut hundreds of jobs this year, and had a $45-plus million deficit to cover. We did take a hard line last year, made it through the year much as expected, and were prepared for another hard year going into this last budget. We've taken much the same view for next year.
 
We don't yet have those small business-created jobs and word comes that recovery in the commercial sector could still be some ways off:
 

From Shopping Centers Today, a publication of the International Council of Shopping Centers:
 
Property values must trough before recovery can begin, conference told.
 
The commercial real estate markets will not rebound until buyers and sellers agree on prices. In the meantime, vast amounts of debt and equity will continue to sit on the sidelines, executives said Thursday at the ICSC Capital Markets Conference, in New York City. ***
 
Once banks and other lenders have accepted the losses on these mortgages, they can reset rents and other costs associated with the property and force neighboring shopping centers to do the same in order to avoid losing tenants, Walsh said. “This process will eventually make market rents go down,” he said. “It will be the beginning of the process of setting a new clearing level.” Prices will not reach their trough until 2011 or 2012, predicted Timothy Zietara, a senior director and manager at New York City–based ING Clarion Capital.
 

 
It would be great to declare the recession over and to throw caution to the wind. But it's not over and we will have a long climb out of this hole when it is. When someone says it's over, do you want to believe a politician or your own eyes?