And another reason for caution about the current/coming rebound in our economy:  worker pay may fall.  Why? The huge, continuing numbers of unemployed press wages down — businesses just don’t need to compete in wages.

At least that is the risk seen by the LA Time’s business columnist in this “Market Beat” column.

,,,the magnitude of job losses here and abroad in this devastating recession poses a huge risk to the future compensation of the still-employed: What if, for years to come, there are masses of qualified people willing to do what you do — but for much less pay?

The U.S. economy has lost more than 7 million private-sector jobs since December 2007, dwarfing the 3.3 million lost in the 2001 recession and its aftermath.

“Never has business shed so many workers so fast, so many people failed to find work who are looking for work, and so many dropped out of the labor force as in the current circumstance,” said Allen Sinai, head of Decision Economics Inc.

Petruno connects the dots: “downward pressure” on wages means a) working families earning less (and generating less revenue) possibly leading b) to deflation and our economy stuck in the bottom of a recession.,

With President Obama touring Asia, Asian leaders have a bit to say about the global recession.  Some comments from an APEC meeting in Singapore, led off by World Bank president Zoellick as reported in the Wall Street Journal:

Several expressed concern that the global stimulus, especially the flood of liquidity pumped out by central banks, could create asset bubbles. “What central banks did in the face of the crisis is just open the tap of liquidity,” the World Bank’s Mr. Zoellick said. The increased liquidity could lead to inflation, such as in commodities. Asset bubbles “could undermine confidence in 2010,” he said.

Hong Kong Chief Executive Donald Tsang said he was he was “scared” that the U.S. may be following the example of Japan — tackling its recession with overly loose policies that could, in turn, inflate asset bubbles.

Singapore Prime Minister Lee Hsien Loong said he wasn’t sure the recent surge in financial markets was sustainable. “In Asia, we have seen stock markets go up, we have seen property markets go up,” Mr. Lee said. “We have to live with it for now and manage the difficulties, but if it becomes a significant and broad, widespread bubble … this will become a serious problem.”

Meaning: we could be — indeed we seem to be — already climbing back up an “asset bubble.”  Where does this take us?  Right to the brink of another crash.  Time for exceedingly prudent state budget making since there is little we can do.

So far, energy costs have not been central either to the analysis of our current Great Recession or of the recovery now struggling to announce itself.

This article in London’s Guardian pushes the cost of oil back to center stage.  The news: the US government during the Bush administration (should we call it the Cheney-Bush administration?) apparently lobbied the International Energy Agency to underplay peak oil.  Result: IEA estimates show unlikely growth in oil production.  Note how much the forecast production relies on sources not yet known.

We’re not going to have to wait long.  As energy demand grows with economic recovery oil prices will climb, maybe into the stratosphere.

One more reason to expect an “L” of a recovery, one more reason for very cautious government budgets.

Update: study that chart for a minute.  Imagine what happens to us if the ‘not yets’ are not found.  We’re in for hard times soon.

The Sunday NYTimes has this survey of the 4 letters of the alternative shapes of our hoped-for recovery.

I’m still the L-guy.

You?  You can have a “V” — quick, sharp recovery. Think basketball bouncing.  I don’t think so.

You can have your “U” — strong recovery, but a bit delayed.  Think yo-yo with a delayed spin at the botton.  I don’t see the recovery — nor do any of the major economists.

You can worry about a “W” — and I’ll worry with you: a bit of a recovery followed by a falter.

For the long run, I’m sticking with the “L” — years and years of very slow growth — no real ‘recovery’ at all.