The Higgins Report: Is the Economy Headed for a Crash Landing?

Banking industry woes could make for a rocky ride

By Joe Higgins, Quest 4 Quality

Let’s say you decided to fly non-stop on United from LAX to LaGuardia.

It was June and the weather was nice. The flight was perfect until the landing, when the pilot brought the plane down hard, knocking open the overhead bins. Luggage crashed to the floor and some passengers sustained slight injuries. Needless to say, it scared the hell out of you. 

Then later a friend asked how your flight was. You said it was terrible, we nearly crashed and I almost died. 

So, the first 5 hours and 10 minutes were good, but the 45-second landing is all you remember. 

This is a metaphor for our current economy.

After the recession in 2020, the economy bounced back in 2021 with GDP up 5.7%, representing one of the best performances since the dot-com era. Then in 2022, GDP increased by 2.1%, an average outcome. Unemployment was recently at a 50-year low and job creation is at an all-time high. We even had a decent start so far in 2023. It has been almost two-and-a-half years of economic prosperity. 

So why, after two excellent years, do most Americans believe we are headed for a crash landing? For one thing, the big banks, corporate economists and Jim Cramer are predicting a recession. Jamie Dimon, CEO of JPMorgan Chase, called our economic future a “potential hurricane” of a downturn. Former Goldman Sachs CEO Lloyd Blankfein said the economy is currently at “very, very high risk” of recession, and Elon Musk quipped, “The U.S. has already entered a recession, and things are about to get worse.” 

March began with the banking industry in turmoil and the failure of Silicon Valley Bank, a regional player catering to tech firms. I had to rethink my predictions about a recession due to this news. I had relied on sound employment numbers, reduced inflation and continued consumer spending, but after two good years, I could see that we were witnessing a growing economy being swept underwater by the run on SVB.

Higher interest rates have been shocking the bond market and the banks. I hope the banking industry and the U.S. government can keep this trainwreck from affecting the entire system. It could severely impact lending for businesses and consumers and stunt economic growth. This is already a global problem, and it is creating a slowdown in lending due to insufficient funds. 

It’s like that plane ride: 99% of the time it was great, but all we remember is the hard landing. And now we have the impetus for a real slowdown, maybe even a crash landing, as the banking industry faces severe headwinds. The outcome is that regional banks could fail, and only the big players will survive. Or the regionals will be absorbed by the likes of Citigroup and Chase.  Remember, following the largest bank failure in U.S. history, Washington Mutual in 2008, $307 billion in assets was sold to JPMorgan. 

The Bottom Line

The three most common signs of an impending recession are a rapid rise in unemployment, a significant drop in consumer spending and a decline of 20 or more points of consumer confidence. None of these indicators are flashing red right now. So why are so many Americans expecting a hard landing?

Recessions are sometimes preceded by a major problem in the banking industry. It’s like being in freefall, waiting for the chute to open. In the past year, the economic news has moved at warp speed; I was comfortable with our economy until two weeks ago, when the run on Silicon Valley Bank began.

But take time to relax and remember that you have had nearly three years of growth and prosperity. Enjoy what you have sowed. A recession over the next eight months will not be anything like the Great Recession in 2008; it will be short and quick. 

Remember, we survived the savings and loan crisis in the 1990s and the failure of the largest banks in 2008; we will also make it through this rough patch. 

It all brings to mind a quote from my college days: “There are decades where nothing happens, and there are weeks where decades happen.” The U.S. economy just had one of those weeks where every day brings a new reality. But America is strong enough to weather this storm and survive a hard landing.

Joe Higgins is a 44-year veteran of GE and Whirlpool Corp. who brings his executive experience to bear as a business consultant, AVB keynoter and YSN contributor. Visit his website, Quest 4 Quality with Joe, at

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