We will recover. This was clearly one of the many messages that President Obama attempted to communicate to Congress and to the American people during his speech on Tuesday night and with the presentation of his budget later in the week. President Obama’s ambitious and expensive budget attempts to address, head-on, many of America’s chronic problems that have been ignored for decades. It tries to deal simultaneously with health, education, climate change, government regulation, infrastructure, energy, farm subsidies, foreign policy, income disparities, and a host of other issues. Wow! What a radical change.

While it remains to be seen which version of this budget will ultimately be approved, there is no doubt that the budget along with the stimulus package will transform America in ways both intended and unintended. There is considerable scepticism that a massive stimulus package can “jump start” the economy, creating millions of jobs. While it is certainly legitimate to question the long term consequences of spending almost a trillion dollars to create and/or stop the erosion of 3 to 4 million jobs, the fact is that without a stimulus package, it could take an unnecessarily long time to move into the recovery mode.

Of course, there will be a price to be paid for such ambitious measures. The budget deficit is projected to be $1.7 trillion (with a “T” and not a “B” or “M”). While President Obama is planning on taxing the rich (earning over $250,000 per year) to provide tax cuts to the not so rich, the question is how long will it be before the less affluent segments of the population are taxed to prevent the deficit from spiralling out of control? Isn’t it realistic to think that the pet projects (so-called “earmarks) of many congressmen will find their way into the budget? Isn’t it a matter of time before everyone will have to pay for these ambitious but much needed programs?

How long will it take before these measures take effect and we begin to move into the “new economy?” The media is now so pervasive in our society that it is very difficult to “see the forest for the trees.” There is so much talk about job losses and tight credit that it drowns out any good news. The constant barrage of downbeat news has done much to instil anxiety and a lack of confidence in the 93% of the population that have jobs and are earning money. Many folks are paralyzed in fear and are not spending money. In addition, the credit crunch is inhibiting those folks who are trying to capitalize on the low interest rates to buy a house or lease a car. This is prolonging a recession that should be in the process of coming to an end.

While much of the data about the U.S. economy shows little cause for optimism, at least three leading economic indicators have trended up in the past two months, providing early signs that the economy may have hit bottom. Most notably, Purchasingdata.com’s Business Conditions Index has trended up for the past two months. The index, which is based on a broad survey of purchasing managers and procurement executives, hit a low of 23.9 in December but has since increased to 26.2 in January and 27.9 in February. The reading of 27.9 indicates that business conditions are far from growing (growth is indicated when the index passes 50), but the trend is providing some possible indications that buyers think business is improving slightly.

Also of note, Purchasingdata.com's Buying Plans Index has also risen steadily since December from 25.3 to 28.7 in the latest survey this month. This indicates that buyers are planning to increase orders after a long decline in buying plans dating back to January 2008.

The other major purchasing index from the Institute of Supply Management has also trended up in its most recent reading for January. After hitting a low of 32.9 in December, ISM’s Purchasing Managers’ Index (PMI) ticked up nearly 3% to 35.6 in January. As with Purchasingdata.com’s index, the ISM data shows the economy is far from growth, but has perhaps hit bottom and is beginning the long climb back up towards growth. Also trending up was ISM’s index for new orders, which jumped more than 10% in January, and its production index which saw increased nearly 6%, indicating that buyers may be ready to increase orders again after burning through high inventories.

We have recovered from many recessions in the past and we will recover from this one. It is time to rally behind President Obama, Prime Minister Harper and other world leaders and support the measures that they and their teams are taking to end the recession. Thankfully, President Obama has a vision, a plan, a team and the determination to make this happen. While the plan is certainly not perfect and there are some expenditures that are questionable, we need to be positive, take prudent risks and get on with the task of moving through the recession. We need business executives who can lead their companies successfully into the post-recession period. Rather than focusing on the past and present, we need to begin thinking about what the “new economy” will look like. Shippers need to begin designing their supply chains and transportation programs to meet the challenges and opportunities that lie ahead. These include:

• A world that is greener, more energy efficient and less dependent on oil
• A world with less truck capacity but with stronger better managed transportation companies
• A world with higher transportation costs
• A world with leaner, more efficient supply chains
• A world with much more cost conscious consumers (who will be impacted by the Great Recession of 2008-2009 just as a generation of people were chastened by the Great Depression of the 20’s and 30’s)
• A world with a downsized, right-sized North American auto industry that builds more energy efficient cars
• A world where the U.S. dollar is lower in value than it is today as demand for commodities, energy and the currencies of other nations increases
• A world with low inflation and low interest rates (in the short term) that will spur investment
• A world with a more regulated banking industry that supplies credit to individuals and companies that have incomes and profits and can pay their loans and mortgages
• A world with higher taxes as everyone must repay the tax burden of the stimulus packages and budgets that have been implemented around the world
• A world with people who understand that you have to earn what you get, that there is no “free ride” and that you have work hard and obtain a higher education to move up in the world

We will be moving into the post-recession world soon. It is time for companies to begin shaping their strategies to deal with the realities of the “new economy.”