Slowdown? What Slowdown?

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Perhaps Americans are thinking that the economic slowdown of 2001, like the election crisis of 2000 and the impeachment crisis of 1998, are just something they'll watch on TV.

Because despite the NASDAQ bubble-burst, and George W. Bush's gloom-and-doom tax-cut pitch, and one of the glummest holiday shopping seasons in a decade, consumer spending — which accounts for two thirds of U.S. economic activity and is one of the main psychological factors in any prolonged recession — is showing surprising January strength.

Auto manufacturers are pleasantly surprised. DaimlerChrysler canceled plans for two plant closings. Retail chains — from JC Penney to Kmart to Sears to Target — expect to top last January's sales by 4 percent. Everybody's topping expectations, although expectations were pretty low.

But that's just the point. Economists love to argue whether it's business investment or consumer spending that makes or breaks a recession, but the fact is that consumers can make bad times a lot worse — and last a lot longer — by closing their wallets in times of financial uncertainty. (Just look at Japan, where interest rates are below inflation and still shoppers are staying home.) January's signs that U.S. consumers are still willing to flash some leather (or at least plastic) down at the mall are a sign that the current economic downturn may be working with a net.

Anticipating a tax cut? While the dot-com layoffs make daily headlines (AOL Time Warner, parent company of yours truly, notched 2,000 job cuts Tuesday), the pink-slipped are getting new jobs, not to mention options-laden severance packages, and national unemployment hasn't yet spiked. Alan Greenspan cut short-term interest rates a half point earlier in the month, and will likely cut them further when the Fed meets Tuesday. And as Bush brings the tax cut to the head of his to-do list in the coming weeks, consumers may find their spirits rising further as they plan — not a little quixotically, considering this is Washington — on those extra dollars showing up in their paychecks soon.

These are not the sorts of things that stop a slowdown. With the markets still flat and tech companies having to woo their salarymen with actual dollars instead of suitcases full of stock options, business investment will be cautious, and the business cycle will not be denied. But as long as consumers refuse to "get" that they're supposed to stuffing every extra buck under the mattress, things can only get so bad.

Not on the worry list

Those dollars may yet dry up, and this slowdown may yet tip over into negative growth. But maybe, in this information age, the business cycle does have a new buffer. Maybe the cable news networks have cried "crisis" one too many times. Maybe the disconnect between national news and private lives has finally been completed in the American mind.

Or maybe, with a change at the helm in Washington to young George W. Bush and his band of are-they-compassionate-or-just-conservative conservatives, Americans have made a subconscious decision to cross one thing off their list of things to worry about, to trust one person to handle things the way they would if they had the time.

In other words: In Greenspan We Trust.