Whether our 33rd President actually said this or not, the joke does highlight the peculiar difficulties and challenges of what some have called “the dismal science” of economics. Analyzing — much less forecasting — what are in essence the individual actions, decisions and sometimes irrational whims of millions of people can make nuclear physics seem straightforward and simple.

Of course, it’s important to remember that whenever we cite numbers such as GDP, the inflation rate, employment levels or average incomes, we are speaking in the broadest generalities. The relevance of an economist’s blizzard of numerals, decimal points, charts and graphs to any single person’s life — or to an individual credit union —might well be pretty small. We all know that, even in the best of times with a rapidly expanding economy, bad luck and bad decisions will yield a fair share of “losers” — just as there are always “winners” who find a way to prosper in the midst of panic and depressions.

So, by the numbers, how fares the economy — No. 1, nationally and, No. 2, here in Michigan? And, more significantly from our perspective, is No. 3: How are credit unions doing? We could probably summarize in just these few words: pretty bad; even worse; and surprisingly good.

The classic definition of a “recession” is two consecutive quarters of negative growth in Gross Domestic Product, or GDP. By that definition, the U.S. did not experience a recession in 2007 — yet some 70 percent of Wall Street Journal economists believe that we are in one in 2008. We’re just awaiting the statistical proof. We know the national economy, as measured by GDP, grew a weak 0.6 percent in the Fourth Quarter of 2007 and consumer spending, which accounts for two-thirds of the nation’s economic activity, was flat in February.

In addition, the oft-cited University of Michigan Consumer Confidence Index fell in February to its lowest level since immediately following the 1990-91 recession. And the Conference Board’s index of leading economic indicators fell in February for the fifth consecutive month. Sharply higher energy costs, falling home prices and tightening credit markets are putting the squeeze on both consumers and businesses.

As would be expected, the U.S. stock market has fallen due to concerns about the economy — and unease with the strength of certain financial institutions, namely brokerages and large commercial banks. In the 1st Quarter 2008, the Dow Jones Industrial Average fell 7.6 percent, the NASDAQ fell 14 percent and the S&P 500 dropped 9.9 percent.

Here in Michigan, the picture is even less rosy. The Great Lakes State has officially been in recession for several years and our unemployment rate is the highest in the nation. Like it or not, we continue to rely heavily on the domestic auto industry — and the “Big Three” of General Motors, Ford and Chrysler are no longer that big anymore. Not only are vehicle sales down in general, but the Big Three market share is a fraction of what it once was. A recently as 1993, the domestic producers accounted for nearly three-quarters of the U.S. motor vehicle market. The Big Three’s slice of the pie is now hovering at around 50 percent, or less than the share claimed by GM alone in the industry’s halcyon days of the 1960s and ‘70s.

With the state projected to lose another 51,000 jobs in 2008, frustrated job seekers are leaving Michigan to seek prosperity elsewhere. The state’s fiscal issues are imposing and, as a result, Michigan’s image has suffered.

It’s true that the Federal Reserve has taken an aggressive posture to rescue the weak economy by cutting the key fed funds rate. The federal government, meanwhile, has enacted a fiscal stimulus package that will put hundreds of extra dollars in tax rebates in most consumers’ wallets in the next few months.

But there may not be much more the Fed and Washington can or should do, given that the Consumer Price Index rose 4.1 percent in 2007, the largest increase since 1990. Granted, that figure was skewed by large spikes in food and energy costs while “core inflation,” which excludes these volatile commodities, rose just 2.3 percent. But even that number is above the Fed’s acceptable inflation range of between 1-2 percent. Bottom line: Inflation concerns may well constrain Washington policymakers from taking any additional actions to stimulate the economy.

Now, for the good news: Despite the economic turmoil, Michigan credit unions are performing quite well. At year-end 2007, the average Michigan credit union net worth was a very healthy 12.6 percent, compared with a national average of 11.44 percent. Net income, as measured by return on assets (ROA), was a moderate 0.55 percent vs. a national average of 0.65 percent. Michigan credit unions have a respectable 77 percent loan/share ratio and a remarkable 0.88 percent delinquency rate compared to the national average of 0.65 percent. It’s obvious that Michigan credit unions have prudently avoided the sub-prime and “creative financing” craze that has fueled the foreclosure crisis.

Perhaps Michiganians — given our long familiarly with the history of our state’s economy and its sharp peaks and valleys — are uniquely qualified to prepare for the worst and weather an economic storm. Business leaders and lenders who take unwise risks in the Great Lakes State typically have short tenures. Whatever the underlying reasons, the numbers show that the vast majority of Michigan credit unions continue to be well managed.

So what is in store for the future? Most economists are forecasting that the national economy will in fact experience a mild recession in the first half of 2008, but rebound somewhat and grow modestly in the second half. The consensus forecast is a weak 1.5 percent growth in GDP for all of 2008, just half of the optimal non-inflationary GDP growth rate of about 3 percent.

Here in Michigan, there will be no magic bullets or easy solutions to improve the state’s weak economy. We have some systemic issues that are still going unaddressed. Significant budget reforms in state expenditures and entitlements are still needed. Personal taxes are already high; the Tax Foundation ranks the state as the 14th highest in its combined local and state tax burden as a percentage of state income. With personal income declining, people leaving the state, real estate values falling and unemployment high, state tax revenues will continue to disappoint, even — perhaps especially — if tax rates are increased.

Nor is our business climate anything to brag about. The Forbes Magazine 2007 “Best States for Business” ranking placed Michigan 46th. A recent development that should help Michigan and the upper Midwest region is that the Big Three automakers have reached labor agreements which will close the wage gap with foreign rivals and institute other changes which should serve to make the companies smaller but more competitive in the future.

But don’t expect any real improvement in the Michigan unemployment rate any time soon. An estimated 246,000 manufacturing jobs have vanished in Michigan since 2000, and we haven’t bottomed out yet. According to the forecast by the U of M economists, the state job market will continue to plummet in 2008 before starting to improve in 2009.

Employment prospects are not uniform across the state, however. Michigan unemployment in 2007 ranged from a low of 5 percent in Ann Arbor to a high of 13 percent in Northeast-Lower Michigan. The Metro Detroit area was at 7.7 percent, Grand Rapids at 6.5, Lansing at 6.4, Saginaw at 8.1 and the Upper Peninsula at 9.2.

So, Michigan credit unions need to remain cautious stewards of their members’ dollars. But caution shouldn’t blind us to the opportunities to take prudent and calculated risks in reaching out and making a difference in the lives of people who are struggling. There is so much credit unions can do — such as provide funding for job retraining, help responsible consumers with bill consolidations or refinance an unsustainable mortgage.

With apologies to President Truman, perhaps we can summarize by saying that while the economy faces more difficulties in the remaining half of 2008, on the other hand, however . . . Michigan credit unions appear to be handling the current economic challenges with the same prudence and wisdom that has long been a hallmark of the industry.