UCLA's Edward Leamer presented a bracing paper at the Federal Reserve's annual conference in Jackson Hole, Wyoming, a few weeks ago. The money paragraph:

Only twice have we had this kind of housing collapse without a recession, in 1951 and in 1967, and both times the Department of Defense came to the rescue, because of the Korean War and the Vietnam war. We don't want that kind of rescue this time, do we?

Leamer is saying that housing crunches would have produced recessions in 1951 and 1967 had federal war spending not stimulated the economy and compensated for housing weakness. Recessions, of course are protracted periods (usually at least six months) of shrinking economic output and employment, which are bad all around for the country. Unemployment goes up, tax revenue goes down and people suffer.

A year ago (Aug. 20, 2006) I wrote a "why there won't be a recession" column. Among the reasons I gave:

-- History is strewn with many more recession warnings than recessions.

-- The housing bubble is not the same as the tech-stock bubble.if the nation could survive terrorist attacks and the evaporation of $7 trillion in 1990s stock wealth with only a mild recession in 2001, surely it can get past an orderly softening in home prices without any recession.

-- Consumers, though stretched, are better off than you think. The scary charts of ballooning personal debt neglect to show that interest rates on the debt are lower than they have been in decades. Household debt service - monthly interest and principal payments - has risen much more slowly.

-- Technology efficiencies make recessions less likely. A traditional recession trigger was the inventory glut, which occurred when factory managers overestimated demand. By the time they realized customers weren't buying, they had to lay off employees to work down excess stocks, which converted what might have been a mild slowdown into something worse. Now everything is linked by computers. The cash register at Home Depot talks to the Black & Decker factory, meaning manufacturers can tune production with consumer needs without traumatic jolts. At the same time, service businesses make up a bigger piece of the economy than ever, which also reduces the odds of overproduction. It's hard to have an inventory glut of haircuts.

This is a big reason that the country has had only two recessions since 1982.

-- Banks are fine. Another recession trigger is the credit drought, when bank balance sheets deteriorate, regulators get goosey and loans are hard to get at any rate. A credit drought helped produce the recession of 1990, but there is no sign of one now.

-- Long-term interest rates are still low. According to Bankrate.com, you can get a 30-year mortgage for 6.1 percent. That's only about a percentage point higher than when rates reached their lows in 2003.

-- The world economy is healthier than it has been in years. I'm not sure I agree with Morgan Stanley economist Richard Berner, who wrote last week that global growth could "sustainably boost U.S. net exports for the first time in two decades" and spur a comeback in business investment. But it should bolster exports somewhat and diminish odds of a downturn.

I'm sticking to the "slowdown but no recession" prediction, but more out of stubbornness than conviction. The odds of recession have gone up a lot. The expanding global economy, low interest rates and technology-fine tuning are still working against recession. But there is a credit drought -- not in banks but in the bond and secondary loan market. The consumer is a question mark. And in many parts of the country what's going on in real estate is not "an orderly softening of housing prices."