Why we're NOT in a recession?

[madskye]

Anyone else read this article? I get it, but it seems to beg the argument that maybe the definition of "recession" needs to be rethought for our new, global economic time?



http://money.cnn.com/2008/09/17/news...tune/index.htm

[AlpineMama]

It won't let me view the article.

[llamalluv]

Corrected link:

http://money.cnn.com/2008/09/17/news...tune/index.htm

[ShaggyDaddy]

Originally Posted by madskye

Corrected link

I believe in sticking with definitions, and a "Recession" as defined as 2 consecutive quarters with negative growth suits me just fine...

That is not to say that these aren't hard times, just that Recession this is not.

There aren't perfect words for what is going on....

Over-Spending-Borrower-House-Gambleing-Fuel-Over-Reliance-Civil-War-butt-in-Correctification just doesn't have the same ring as "Recession", but politically definitions are a nice way to skirt real issues.

We are not in a recession, we are just screwed by other factors. in other words... The GDP is not broken(recession), it is just badly mismanaged.

[llamalluv]

Originally Posted by madskye

Anyone else read this article? I get it, but it seems to beg the argument that maybe the definition of "recession" needs to be rethought for our new, global economic time?



http://money.cnn.com/2008/09/17/news...tune/index.htm

You want to redefine an economic term that is based on OBJECTIVE criteria to fit your completely subjective feelings? That's silly.

[madskye]

I fixed it. Granted, I read this quickly, but I don't think it particularly helps to point out that "technically" this isn't a recession.

Technically, your house didn't burn down, it was just momentarily engulfed in flame, and everything you own was lost...but technically, it didn't burn down...

[llamalluv]

Originally Posted by madskye

I fixed it. Granted, I read this quickly, but I don't think it particularly helps to point out that "technically" this isn't a recession.

Technically, your house didn't burn down, it was just momentarily engulfed in flame, and everything you own was lost...but technically, it didn't burn down...

[madskye]

I thought this was interesting:

So if we're not in a recession, why does everyone think we're in one? Partly it's because in a global economy, it's possible to produce economic growth that many people don't feel. The rewards of economic growth are going disproportionately to those with the best educations, bypassing many of the more numerous workers without college or higher degrees. In some cases, well-educated workers like teachers have also missed the rewards of growth. Even a company's stock price that rises with global growth doesn't benefit Americans as much as it used to, because ownership is dispersed much more widely around the world than before.

Is it crazy to argue for a new definition of recession based on economic model that seems to be vastly different than the past? Or can an economic term never become obsolete? I would think economies change so much there would need to be some room for adjustment.

[tayndrewsmama]

Originally Posted by madskye

I fixed it. Granted, I read this quickly, but I don't think it particularly helps to point out that "technically" this isn't a recession.

Technically, your house didn't burn down, it was just momentarily engulfed in flame, and everything you own was lost...but technically, it didn't burn down...

I get what you are saying. Your house didn't burn down to the ground, but you are still left with nothing.

Is there a term for this?

[Sk8ermaiden]

The thing is, a recession is already defined. The answer is not to change the definition to fit how we feel. Really the answer would be to coin a new term that does mean what we're looking to express.

For now I'm just calling it "hard times."

[amyamanda]

It only doesn't fit the technical definition of a recession if you believe the statistics that are being used to (not) meet that definition.

If the statistics were not spun so creatively, I am quite sure that the current economic situation in the US would fit the definition of a Recession, and possibly even a Depression.

[Audra]

amyamanda! http://www.shadowstats.com

[SleeplessMommy]

"W" just canceled a trip to Fl and AL to "focus on the economy". I think he is a few years too late on this.

http://www.cnn.com/2008/US/09/18/bus...omy/index.html

The rich people are still happy, how can it be a recession? (sarcasm)

[VisionaryMom]

Originally Posted by Sk8ermaiden

The thing is, a recession is already defined. The answer is not to change the definition to fit how we feel.

I don't think that's what MadSkye's suggesting. What she's saying is that recession specifies a very narrow economic condition, and perhaps that definition is obsolete because the global techological economy we have now is not precisely the same as the industrial economy we had when that term came into existence. Economics is a constantly-changing discipline, and terms are sometimes defined.

One of the biggest problems I see with a lot of our economic indicators is that they don't include many of the facets of the economy that affect most people. Isn't it the cost of goods index that doesn't include the cost of food? How can that be legitimate when it's the largest non-fixed expense most families have? There is a problem with the way the term's definition relates to the experience of the masses.

[EmsMom]

I am no economist, however, I have two thoughts about the current "not really a recession". First, while the statistics do not indicate a national recession, there are quite likely many regional recessions even while other regions are doing quite well. Second, the statistics always are behind at least a couple of months. It takes time to accumulate and analyze complex data. GNP may be slowly declining over time, but not yet enter the recession zone for many months and then suddenly cross over the line while the statistics catch up.