Wednesday, April 30, 2008

Oddest Recession I've Ever Seen

When I hear people talking about how bad this current so-called recession is, I often ask them: do you know what the definition of a recession is? Of course, the vast majority do not. How, then, can they say we're in a recession? Because the news media tell them we are, and because we have a Republican president.

The definition of a recession is two consecutive quarters of "negative economic growth"; in other words, it's two quarters of a contracting economy. So you can't really tell if we're in a recession until the economic numbers for two consecutive quarters are in.

And they are. 4th Quarter of last year, ending December 31st, the economy grew at an annual rate of .6%. First Quarter of this year, ending March 31st, the economy grew at an annual rate of .6%.

Now I'm not saying that this anemic growth is cause for celebration and perhaps a national holiday, but if we're to believe facts over hype, then we have to be honest.

And our friends on the left need to quit lying just to score political points.

Leave it to al-AP (the linked article above) to find the dark cloud within the silver lining:

Many analysts were predicting that the gross domestic product (GDP) would weaken a bit more — to a pace of just 0.5 percent — in the first quarter. Earlier this year, some economists thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that will likely happen during the current April-to-June period.

How long have we been hearing these doom and gloom predictions? I'm thinking since about January 2001.


allen (in Michigan) said...

We've gotten used to economic growth so a reduction in the rate of expansion is now a recession.

It's also an election year with a Republican in the White House and a House and Senate which just changed hands yet have little to show for the swap. While lefties like to tout Bush's low approval numbers he looks positively stellar compared to Congress.

Eric W. said...

But if the sky isn't falling, how will the news stations get their ratings?

Darren said...

The answer to your question, Young Padwan, will come during the administration of the next president from the Democratic Party.

Anonymous said...

People in my economics class know what a recession is . . .

But the hilarious thing is that it's completely arbitrary. Why 2 quarters? Why not a month. Or three quarters? The best definitions are still the funniest. A recession is when your neighbor lost his job; a depression is when you lost yours.