Posted by Peter W. Schramm
The U.S. Economy grew by 0.6% the last quarter. While this is not impressive (same as last quarter) it is better than expected and means that we are not in a recession; one economist calls it a "growth recession." The guy’s a wordsmith.
A recession is not a state of mind, but a quantifiable event.
Politically, it's very much a state of mind; it's very much a matter of perception.
Our economy is being crippled by the only Kryptonite known to have power over it. Energy prices and Congressional meddling. The American economy is resilient, reflective of the virtues of the men and women of this great country. But energy prices percolate throughout the entirety of the economy, exerting enormous inflationary pressures. When combined with Congressional "assistance," --------------------- we've got problems in River City..........
Yeah, only in politics will you get loss when it is win (Vietnam).
"The guy's a wordsmith."
Classic PWS! I love your postings.
Energy prices do have very interesting effects and hard to quantify effects Dan... interestingly enough energy prices in Urban Economic models have direct bearing on housing markets...It is as the article notes the housing market that is slowing drastically and acting as a drag on the Macro numbers/vectors...As Dale Michaud notes recession is quantifiable, but it is also a state of mind. The consumer confidence index is an attempt to quantify this state of mind aspect...but in short if we look at the number of people, mostly middle class who have a lot of networth in the housing market then obviously a harsh drop in the housing market even if it is an effect of oil, is likely to put people in a dour mood. Of course high gas prices also hit the middle class hardest. Of course these economists are wordsmiths, so are the economists who do punditry/politics. If the US economy is a car and growth is mph, then when aspects of the economy hit the brakes and the car slows you have "growth recession", even in a booming economy some parts are hitting the brakes, but the pressure on the gas is greater so the car is speeding up...the economy is slowing down or in recession when more quantifiable aspects of the economy are hitting the brakes, but this doesn't mean that the car is going backwards, which would be a recession. Of course some of the cars are going backwards, politicians know who these people are and where they live and can tailor messages accordingly, which is why you will see Hillary Clinton pumping a lot of gas on the campaign trail. In fact if you want to do so go pick up Mark Penn's Microtrends, and look up the demographic group known as "supercommuters"...now I am willing to bet a pretty nickel that the Clinton people have demographic data that is more substantial than what is available on ABC or CNN(for that matter I wonder what the networks are holding back, not nefariously necessarily)
There is no such thing as a "growth recession." A recession is 2 consecutive quarters of contraction, i.e., the numbers getting smaller. This is ridiculous, politics-driven nonsense at its worst.
The article states that the economy grew, not contract.
So, are we in a recession or not? I suppose it depends on what numbers you use.
Dale, that is exactly my point. The economy did grow. Ergo, by definition, we are not in a recession. Frankly, given what has happen in the housing and securities markets, this is a miracle. The media should be talking about how robust the economy must be in order to survive the debacle with positive growth. Instead, they are trying to redefine "recession" to present a picture that is worse than reality.
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