Ultimately, the adjustments that the economy is making is going to set us up for the next strong period of growth. Others contend that companies could harm themselves by firing the people who buy their products, potentially damaging the economy in ways not easily rectified with an interest-rate reduction or a tax cut. If the rate of layoffs continues to increase, I expect the damage to consumer confidence will be considerable. That came just days after Lucent Technologies announced 16,000 job cuts. This week, it was DaimlerChrysler saying it will ax 26,000 jobs over the next three years.
Cutbacks make sense to some workers.
At Brunswick's Bayliner Marine boat factory outside Spokane, Wash., employees have glumly noted the unsold boats stacking up in the yard. She said she would like to remain with the company where she has worked for eight years, but isn't sure if she wants to move. Workers with fewer options may be less understanding. The last time the economy slid from growth to recession, in 1990, the Consumer Confidence Index plummeted as the nation's unemployment rate climbed. But 1990 was a very different time economically.