Peace in the Persian Gulf Won't Ward Off a Recession in the U.S., Economists Predict
NEW YORK -- Recession called on account of peace? Don't bet on it.</br></br>Economists say that even if the Persian Gulf crisis is resolved peacefully, it will be too late to stave off a recession.</br></br>"The damage has been done," says Joseph Wahed, economist at Wells Fargo. "Companies have canceled or postponed plans; people have been laid off." And while peace in Kuwait would no doubt help, it's unlikely to quickly reverse the economy's downward momentum.</br></br>"It's easy to blame it all on Saddam Hussein," says Merrill Lynch economist Bruce Steinberg, "but the problems were there before. This is the final unwinding of an expansion that lasted eight years."</br></br>Up until the Aug. 2 invasion of Kuwait, the great majority of economists thought the U.S. would skirt past a recession. Some, in fact, had cobbled together a theory that recessions were a thing of the past -- that while individual regions or industries might suffer "rolling recessions," the country as a whole could keep eating cake forever.