situation is beginning very slowly to improve. Housing starts are up a bit.

The unemployed rate is down a little. Wholesale sales have shown a slight increase.

It is ironic, given the fact that the recession was a major factor in the defeat of George Bush, but it may be that President Clinton is going to enjoy an improvement in the economy which will make it unnecessary for him to risk increased inflation by increasing spending. Those who feel George Bush made a grave mistake by not emphasising early improvements in the recession may be correct. George Bush seems to have lost his presidency just as things began to improve.

Bill Clinton has somehow managed to be up-beat despite a bruising and very dirty campaign. He will come into office in an atmosphere of optimism despite the grave national debt created by the Republicans and the very depressed economy. Part of the problem with the economy in the United States has been a reluctance on the part of those people who had money to actually spend it.

People also appeared to be very reluctant, despite low interest rates, to borrow money for housing. If Bill Clinton's presidency begins with optimism and confidence in the future, people may begin spending and borrowing to spend.

However, we think it is important for people in Bermuda to understand that after any recession tourism is among the last things to recover. Trips abroad, and especially trips abroad to a resort as costly as Bermuda, are an expensive luxury. An improvement in the economy of the United States is not a sign that Bermuda can relax and everything is now going to be better. Even if everything goes well, it may, in fact, be the tourist season of 1994 before Bermuda sees a marked improvement.

It is important that Bermuda remembers that it has to get its tourism in good order even though things may get better in the United States. The recession and its consequences have done us one favour. We have seen quite clearly the strengths and the weaknesses in Bermuda's economy and the grave dangers of high-priced hotel rooms without five star service.

Americans will not automatically flock back to Bermuda because it is still seen as very expensive and the visitor of the 1990s will be looking for quality and value for money spent. The "take it or leave it'' 1980s are over and Bermuda still has to improve its service and hold its prices or it will be yesterday's resort. It also has to learn not to use every hiccup on the labour front as an excuse to down tools and disrupt people's hard earned and expensive holidays.

Bermuda is the best of the islands but it has to work hard to keep that standing and to convince people that the best is worth the price.*l