Many might start reading this leading article and immediately assume that it will be about former US President George W. Bush. However, it is not. The article, although related to George W. in a sense is about the dreaded W-shaped recession.

This newspaper had already published an editorial warning that we might not yet be out of the woods in terms of the recession and this was because we could go into a W-shaped recession rather than the traditional U-shape.

In fact, commentator Alfred Mifsud, who has since taken a sabbatical, also commented on the matter. Recessions usually follow a U-curve, a dip, followed by a trough and eventual recovery.

A W-shaped recession is different. It also features a drop in the curve but then shows a sharp turnaround, followed by another dip and eventual recovery. In a nutshell, economic performance plotted on a graph takes the shape of either a U or a W.

The W-shaped recession is normally brought about by an abrupt upturn in the world’s markets and economies. A few months ago, while there was talk of the W-curve, it was too early to say whether this was or was not going to be the case. But now, as global recovery intensifies and gathers pace, many economists and analysts are worried that this very well could be the case.

The argument is that while the various rescue packages put out by governments around the world did help stave off a full market collapse, it was not enough to continue with a sustainable recovery.

Of course, now that the funds are dwindling and companies are having to claw back losses on their own initiative, the differences are starting to tell. But this could also answer another argument. Some economic theorists stated that by agreeing to bail outs, governments interfered in the Capitalist system, not allowing for natural decay and turnover.

This, they argued, would prolong the recession and even allow companies that should have folded another chance. This could well be so, but if one looks at the flipside of the argument, this could have been the best thing. The prolonged decay and eventual folding of companies perhaps offset mass unemployment. While it is true that many of those who had to go under, did so in the end, the staving off of mass layoffs perhaps allowed the world a few vital months in which it could take stock of the situation and plan a way out of the mess.

What is certain is that we are not out of the woods yet, and especially in Malta’s case. Having the characteristics which we have, we were late into recession and we will be late out – it is always the way and it is heavily linked to tourist arrival/spending performance.

But what will be interesting to see would be the way our economy responds in the case of the world’s economy dipping into a second slump. Will we follow suit? Will we remain on an even-keel? It all remains to be seen and while the governments will do all they can to maintain recovery, we would all do well to remember that we are at the mercy of the markets. That is Capitalism and there’s not a darn thing we can do about it.