This recession is as much a consumer credit bubble as a housing bubble. The credit correction means that less credit worthy borrowers have a harder time getting credit and thus their consumption is forced down.

Consumers will be buying smaller houses. Remodelers will be putting less granite counter tops in kitchen remodeling. Automobiles will become more practical and traded less frequently. Families will be eating home more and eating out less.

While this adjustment is painful, it is not necessarily a bad thing. We will consume less energy and we will waste less because we will buy less. Environmentalists should see a benefit in a more pragmatic consumer.

Likewise companies will be forced to cut expenses, including payroll. Initiatives that do not add quickly to the bottom line will be delayed indefinitely. Market shares will shift to the fast and the lean. When we come out of this thing- and we will- our productivity will shoot through the roof.

And an economy based on improving productivity will be much stronger than an economy based on sloppy credit practices and an easy money policy from the Fed.