I thought it was interesting that one of the people who ended up reading my previous post is the owner of this blog. In it, he says that:
“The official definition of recession has become delinked from peoples’ actual experience. Right now, we’re in an economy with deteriorating employment and incomes, collapsing home prices, and business retrenchment. Is it also an economy in recession? Who cares?”
He also links to a Krugman post that makes the same point. Who cares is this is really a classic recession, right?
Well, I care. I care because this government (and all the previous ones too) will use the term recession to justify spending my money.
Besides that, if we are talking about looking at other indicators besides GDP, it is worth mentioning that:
– National unemployment is currently at 5.1%. In the past we used to call 5% “full employment”
– The stock market actually went up in April. The DOW is back at 13000, same as we were back in January
How about this: We can only say we are in a recession/crisis/whatever when our unemployment rate is at the same level as Europe (who had a record low unemployment rate of 7.1 percent in March!) and our stock market falls for, let’s say, a full year?
Oh, I would also expect that if we were really in such dire straits we would not have Bush and congress willing to ‘donate’ $770 million in food aid to the rest of the world without public riots on the streets.
But maybe this is just old conservative me not being sophisticated enough. Again.
Of course I am not saying that we are in a great economy but six months have passed and I am still waiting for the so feared worst crisis of the last 60 years.