Posted by Damozel | Did you know that there is an arbiter of recessions? Well, apparently there is, and it's called the National Bureau of Economic Research, "a group of academic economists that is based in Cambridge, Massachusetts. Bush's Council of Economic Advisers, chair of Bush's Council of Economic Advisers, says he can't say whether or not there is a recession till they weigh in. "“I’m still not saying that there is a recession,” he said, because it seems these things are never clear till this National Bureau of Economic Research announces make an announcement.
Don't say it, National Bureau of Economic Research! If you don't announce it, maybe it will go away.
And actually, the National Bureau of Economic Research says it's still too early to know.
The seven economists who sit on the bureau’s recession-dating committee began exchanging e-mail messages late last year about whether the economy was on the verge of a recession. But committee members said Friday that it remained too early to know.
The bureau defines a recession as a significant, protracted decline in activity that cuts across the economy, affecting measures like income, employment, retail sales and industrial production.
“Given that definition, the committee can’t possibly call a recession until it has been going on for a while,” said Christina D. Romer, an economics professor at the University of California, Berkeley. “There is no way to know if the downturn will be sufficiently long-lasting until it has lasted for a while.”(New York Times; emphasis added)
Other experts seem to think that we've reached the point of no return for the downturn. "If history is a reliable guide, the recession of 2008 is now unavoidable," announces The New York Times somberly. Shut up, New York Times. You're not the arbiter of recessions.
At the same time, the article does sort of assemble the pieces of the message that Bush's people aren't prepared to read aloud to the public. (After all, his approval ratings, low as they are, could go lower still, once the 26 percenters start to feel the direct effects of this inconvenient side effect of Bush's policies.) But the hand-writing appears to be on the wall, even if it requires a panel of experts to read it.
The dismal jobs report released Friday showed overall employment to be lower than it was three months ago. Every time such a slump has occurred since the early 1970s, a recession has followed — or already been under way.
And if the good times have really ended, they were never that good to begin with. Most American households are still not earning as much annually as they did in 1999, once inflation is taken into account. Since the Census Bureau began keeping records in the 1960s, a prolonged expansion has never ended without household income having set a new record....
Even the one apparent piece of good news in the employment report was a mirage. The unemployment rate fell to 4.8 percent, from 4.9 percent in January, but only because more people stopped looking for work and thus were not counted as unemployed by the government.
Over the last year, the number of officially unemployed has risen by 500,000, while the number of people outside the labor force — neither working nor looking for a job — has risen by 1.3 million.
Employment has risen by 100,000, but even that comes with a caveat: there are also 600,000 more people who are working part time because they could not find full-time work, according to the Labor Department.(New York Times)
Going out on a limb, Joshua Shapiro, an economist at MFR, "research firm in New York, warns: “The decline in the unemployment rate...should not be viewed as good news.” (New York Times) Right then, Mr. Economist---I'm not viewing it as good news.
For months, the article notes, "policy makers and Wall Street economists"---a/k/a, Republicans---have been wishing (bop) and hoping (bop) and praying (bop) and thinking (bop) and planning (bop) that "the aggressive series of interest rate cuts by the Federal Reserve would keep the economy growing...But the possibility seemed to diminish almost by the hour on Friday." (New York Times)
Now the Fed is desperately trying to kick start the economy by measures described in the article. And the policy makers and Wall Street economists are clinging on to the hope that the economic stimulus will magically resuscitate it. There's still life in it...."CLEAR!" Bzzzzzt! "Again! CLEAR!" Bzzzzt!.........
And what of the National Bureau of Economic Research, the arbiter of recessions? As noted above, it isn't enough for the economy to be pronounced dead. It has to stay dead for a few weeks or months. After it's failed to respond for long enough, they'll perform an autopsy, and if it's still dead, we'll have ourselves a recession.
But those of us who aren't economists might feel we already know. After all, the jobs that are gone aren't prospectively gone----they're gone now. Likewise, the houses. Likewise, the prosperity we so fondly remember from the days before 2000.