Crawling from the wreckage: we may be coming out of the 'long, hard slog,' but the economy has to learn how to walk before it can run again.

• Author: Cote, Mike

Five years ago, economist Bill Greiner gathered with a dozen or so business-people from Colorado in a San Francisco hotel meeting room and talked about the "long, hard slog"--the sluggish period he and his colleagues could see coming around the corner.

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Greiner and his team didn't predict the severity of the economic crisis or how fully it would hammer just about every part of the economy, but the theme they chose that year for their economic forecast has proven - unfortunately--to have stubborn staying power.

During his 2012 forecast talk in Napa Valley in October, the president of UMB's Scout Investment Advisors didn't exactly have jump-for-joy news, but he did offer a glimmer of hope within the next few years.

Just not next year.

Greiner's team predicts the U.S. gross domestic product will be in the black in 2012, but that needle will hover just a smidgen from the red. And the probability that we will suffer another recession--depending upon what happens in Europe is about 40 percent for the next couple of quarters and as much as 50 percent by the end of 2012, he said.

"We think the economy this year is going to register a 1.2 percent GDP growth rate, as compared to 2.8 percent in 2010. Putting this in perspective, historically it's been about 3.2 percent per year since the end of World War II," Greiner told a group of business executives hosted by UMB and honorees primarily of the ColoradoBiz Top Company awards program.

For the economy to be healthy enough to create jobs and real momentum - that number needs to hit 3 to 3.5 percent, said Greiner, adding his predicted range was 1 to 1.8 percent.

On the bright side, Greiner believes we've reached the final stage of a three-stage process in this economic episode.

"The first stage of the process of trying to figure out what to do with any kind of economic structural problem is shock. The markets go through a shock phase, and we went through that in the United States in "08 and the first part of'09 when our equity markets went down by almost 55 percent in value. Liquidity froze up, and the U.S. banking system almost stopped."

The second phase, which Greiner says Europe is tackling now, is finger-pointing. Who's to blame? In the United States, we've already wrestled with this issue and have come to grapple with solutions, such as how to address debt, he said.

"We've come to a conclusion that we need to de-leverage. I think the consumer side of the...