01 March 2008

But Wait... Haven't We Been in a Recession? Part 2

More doom and gloom from the MSM.  Here they say:

Analysts said the two new reports Friday were just the latest danger signals that the country was edging perilously close to a recession.

But wait, they go on:

Other than two negative months in August and September of 2005, which reflected the disruptions from Hurricane Katrina, inflation-adjusted consumer spending has not been so weak since November and December of 2001, when the country was struggling to emerge from the last recession.

But was that really a recession?

The classic definition of a recession is two back-to-back quarters of declining gross domestic product.

Notice it doesn't say anything about adjusting for inflation, does it?

From Wiki

The U.S. economy shrank in three non-consecutive quarters in the early 2000s (the third quarter of 2000, the first quarter of 2001, and the third quarter of 2001). Strictly speaking, the U.S. economy was not in recession during this period -- the common definition being "a fall of a country's real gross domestic product in two or more successive quarters."

Go figure.


Posted by: Stashiu3 at 23:36:23 | Comments (4) | Add Comment
Post contains 187 words, total size 2 kb.

1 Though to be fair, the definition of "recession" makes it damned hard to actually have one..

Posted by: swj719 at 02 March 2008@00:08:42 (Rh/RM)

2

The definition applies no matter what party is in charge, right?  Yet, the MSM gets to change the definition to smear a conservative administration.  That's what bugs me about it.

There is an ebb and flow to national economics and the free market.  If recession were defined more narrowly, investors and business would be more cautious than necessary, just because the word recession has such a chilling effect.  You hear it and think "depression", then "The Great Depression".  The MSM uses that chilling effect to sabotage the economy and tries to make the administration look bad.

They should be called on it by someone, so I do it when I see it.

Just sayin' 

Posted by: Stashiu3 at 02 March 2008@00:34:30 (tarqT)

3 In a way it depends on where you live.  In my area, it would be accurate to say we've been in a depression ever since Katrina (or more precisely, Wilma) due to the popping of the real estate bubble, the related issue of property taxes, and hurricane related insurance issues, plus a decline in tourism (especially in tourists from outside the US)--meaning less money for everyone   I work in retail, and spending by our customers had declined a noticeable amount for the last two years. 

So if someone comes to me and says we're in a recession, I'd be inclined to agree with him.  If I lived in another part of the country that didn't suffer so much from those issues, I'd probably say he was crazy.

Posted by: kishnevi at 02 March 2008@16:25:41 (zxjPs)

4

Fair enough sir.  I would contend that a local paper or news outlet would be justified (if technically incorrect) in applying the term recession to their area.  My objections are to the national media distorting the definition for their own ends (sell papers, bash the administration, advocating legislation that benefits them or their supporters, etc..)

When they go so far as to "adjust for inflation" to make positive numbers appear to be negative numbers it's even worse.  I have a lot of difficulty with the fact that journalistic integrity has become the exception, rather than the rule.

Posted by: Stashiu3 at 02 March 2008@17:23:04 (tarqT)

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