Can any of my doom-and-gloom-economy readers tell us what an economic recession is? By definition, it's two consecutive quarters of negative growth (contracting economy). We don't have the numbers in yet for the 1st quarter of this year, so we can't know yet whether or not we're in a 2nd quarter of negative growth.
Why we go through so much hand-wringing over these cyclical occurrences, I don't know. The economy can't grow forever. It stops, takes a breather, then picks up again. Market forces. To steal a line from the new Battlestar Galactica: all this has happened before, and it will happen again.
But when Republicans hold the White House and there's a possibility of a recession--I've been hearing about recessions since January 2001--you'd think we're one step away from 1933. So what's our current situation? A little perspective is always helpful, brought to us by Power Line via Instapundit:
I'm sorry to see unemployment climb to 5.1%, but by historic standards, that's not exactly a "grim picture." For example, nothing like the unemployment rates that, along with runaway inflation, propelled Ronald Reagan to the presidency in 1980. But I wondered about a more recent comparison. Do you remember 1996, when Bill Clinton swept to an easy re-election victory over Bob Dole, on the basis of what pretty much everyone in the press considered a near-perfect economy? No "pink slip nation" in 1996!
Actually, though, the unemployment rate in November 1996, when Clinton rode a soaring economy to victory, was 5.4%. That's right--three tenths of a percent higher than the "grim picture" of a "pink slip nation" painted by this month's unemployment report.
To all those people who expect the President to "run the economy"--think about exactly what that means, and what you expect him to do. Tell me exactly what President Clinton did to make such a great economy.
Presidents can affect the economy positively in only a couple ways. They can sign into law bills passed by the Congress, bills that economists tell us will help an economy--like tax cuts. They can lead from the bully pulpit to encourage tax cuts. And they can choose, every decade or so, a new fed chairman. Anything else?
There are lots of things a president can do to affect the economy negatively--like put 1/7 of it under federal control, a la HillaryCare. Raise taxes. Put on a sweater on national tv and tell your fellow Americans to make do with less.
Now I know what you lefties are dying to say. "The war is draining our economy!" Check out the percentage of GDP our military is eating up today--in a kinda-shooting war--and compare it to 1945 (WWII), 1952 (Korea), 1969 (Vietnam), 1979 (no war), 1985 (no war), and any year in the mid-90s, then try to justify your claim. Lefties, I won't post any comment of yours about the economy and the war unless you do this. It's my blog, my rules.
Update: Instapundit adds another post this evening, saying
This may well be true; we're overdue for a recession -- we haven't had a really deep one in over 25 years -- and my sense is that there remains a lot of economic idiocy still to be wrung out of the system, which is what recessions are for.
Speaking for myself, though, I'm not an econo-blogger. I tend to be over-pessimistic, but I guess I have tuned out a lot of the media econo-doomsaying because they've been predicting massive economic collapse for pretty much my entire sensate life and so far it hasn't come. Plus, at the moment they're playing their usual pre-election gloom-and-doom game in the hopes of helping the Democrats.
Which doesn't mean that the economy is necessarily doing better than they say, since their bias is exceeded only by their laziness and ignorance. As I noted some years ago about their Iraq reporting, the fact that they're transparently playing up bogus bad news doesn't mean that there isn't genuine bad news that they're not reporting, because reporting that would require knowledge and effort. So you can't just apply "Kentucky windage" and assume that things are better than the reports say. They may actually be worse, just in a different way than is reported . . .
Pretty much true.
Update #2, 4/9/08:
Here are more comparisons with 1996. Love how those goalposts change.