Regular readers know how pessimistic I am about the economy. The “recovery” is little more than a government-financed credit bubble and it’s back to risky business as usual for much of the banking sector.

But that doesn’t mean there isn’t good news to report.

For instance, less credit coursing through the economy means deflation, and deflation means stuff is cheaper.

Start with the cost of necessities, like shelter. House prices are down 31 percent, according to the latest Case-Shiller data.

That may wreak havoc with bank balance sheets, but it’s great for buyers. Rents are down, too. I was thrilled to get two months free when I signed my new lease. Such terms were unimaginable just two years ago.

Energy isn’t cheap, but thanks to reduced demand it’s cheaper. Oil is down to around $70 per barrel after reaching $147 14 months ago.

Deflation can improve an economy’s competitive position, too. In the short run, it means higher unemployment, but in the long run it means improved productivity.

If, for instance, blue-collar workers can afford to work more cheaply America may stop bleeding manufacturing jobs.

A big reason we have deflationary pressures is that banks are lending less. Yes, that’s good news. It means excessive levels of credit are being wrung out of the system. Credit isn’t a bad thing, but too much of it inflates unsustainable asset bubbles.

On an individual level, this means keeping up with the Joneses no longer requires maxing out your credit cards and taking out a home equity loan. Sure enough, statistics suggest people are borrowing less and saving more. As of July, consumer credit had fallen 4.2 percent over the previous 12 months — the fastest rate since 1991 — while the personal savings rate reached 5 percent in the second quarter.

Banks are socking away more cash too. The biggest ones have raised tens of billions of new equity since the stress tests, giving them thicker cushions to absorb future losses.

And some of the government bailouts are going away on schedule. The Fed will soon stop printing money to buy Treasury securities, and FDIC’s debt guarantee program is being wound down, as is Treasury’s backstop for money-market funds.

For their part, state and local governments are facing up to budget realities, making cuts and raising taxes to put themselves back on a sustainable path.

A good example is Flint, Michigan, where city planners are now “planning shrinkage.” This reduces the city’s operating costs: There are fewer abandoned streets to police, fewer sidewalks to repair and shorter routes for trash collectors.

And who doesn’t love the occasional shot of schadenfreude that downturns deliver? Bernie Madoff got 150 years in prison. Lehman, Bear Stearns, Merrill Lynch, Wachovia, and WaMu are all gone, victims of their own hubris.

These are the kinds of adjustments that dynamic economies have to make in order to flourish over time. Higher unemployment is an unfortunate consequence early in the process — I should know, I lost my job at an internet company earlier this year as a result of the recession — but in the long run many people end up more gainfully employed.

Think of the thousands of investment bankers that lost jobs last year. Was that a bad thing in the long run? Think of all the talent that’s no longer wasted generating vigorish for banks.

We need more creative destruction, not less. It will make the economy more productive. And higher productivity is the magical ingredient that enables sustainable growth.

The Year Since Lehman — related columns:

Securitization survives the fall

Banking? Keep it simple, stupid

A year on, it’s still a housing story