Has Everyone Gone Nuts?

April 30, 2008

About This Media Driven "Recession"

We keep hearing from the liberal media and Democrats about our terrible recession. The only problem is that our economy is still growing. But, the Associated Press still can (and wants to) make that look bad. Eventually, the doomsday crowd may talk businesses and individuals into cutting their spending enough in reaction to claims of a recession until they actually create one.

AP - Economy grows by only 0.6 percent in 1st quarter of 2008: The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.

Oh, so not "technically." Technically, the AP is a bad news source. Here's the technical definition of a recession: Recession is defined as a decline, for two consecutive quaters, of real gross domestic product - the value of all final goods and services produced within a nation in a given year. We have not had that, as growth is not a decline. Also, the U.S. has the world's highest gross domestic product (GDP), as derived from Purchasing Power Parity (PPP) criteria. So, when we meet the "technical" definition of a recession, let us know about it only then.

But, as private businesses are working hard to make progress, another segment of our economy is booming with little effort.

USA Today - Hiring leaps in public sector: Governments added 76,800 jobs in the first three months of 2008, the Bureau of Labor Statistics reports. That's the biggest jump in first-quarter hiring since a boom in 2002 that followed the 9/11 terrorist attacks.

Don't worry about getting in soup lines or selling apples on street corners yet. But, if you start to worry, just get a government job. They can always make more jobs doing nothing. However, stay away from applying to newspaper publishers. They truly are in decline and only wish that the nation would join them. It could be envy.

Authored by Woody

Posted at 01:30 PM | Comments (13) | Add Comment
Post contains 344 words, total size 3 kb.

1 "The statistic did not meet what economists consider the classic definition of a recession,"

We see this kind of language all the time from the left. Maybe not as bad as the decline in temperatures and the increase in ice being described as "a period of less rapid warming", but close - because it sounds almost hopeful that the economy is sliding toward a recession (or disheartened that it hasn't already, depending on how you read it).

Recently Jay Tea at Wizbang said that a great deal of the health of our economy stems mostly from our heads. What he neglected to touch on was that the media's constant mantra of recessionrecessionrecession can, and does, cause people to react in a fashion that could actually bring that to bear.

Posted by: Oyster at Thursday, May 01 2008 05:41 AM (hCybq)

It's the same problem with other aspects of economics. If people believe that prices will increase significantly and quickly, they will start to buy items earlier to get them cheaper and, thus, will create an artificial shortage, which will cause inflation.

I had a recent flashback of the 1970's when I went to a gas station and it was out of regular gas. The main problem with gas shortages then was that people were keeping their gas tanks topped off because of fear that they couldn't get gas when they needed it, and stations couldn't sell normal inventory that was already sloshing around in those cars.

It's true that many economic problems are fear driven and are in our heads.

Posted by: Woody at Thursday, May 01 2008 08:34 AM (Eb/8J)

Even if the statistics is right, the economy is cyclical by nature. The opposition needs to make it clear how much current administration is responsible.

Similarly, I hear commentators talk about a multipolar world order in view of the rise of emerging economies. I do not believe them so easily.

I would rather agree with British Prime Minister Gordon Brown that US leadership is necessary in an increasingly interdependent world.

Posted by: Shah Alexander at Thursday, May 01 2008 10:32 AM (EiR8q)

I'm working with a lot of those "Western Pa" "Northeast Ohio" people who are cleaving to their guns and crosses! AND - Although there often isn't even a Republican candidate on the ballot - so few Republicans in the area. These "cleaving people" want to vote Democrat yet again. EVEN though they are hiring quite a few people where I work (factory work that has vanished?) and they do a lot of work for Halliburton of all companies. The media has them convinced of this recession. There MAY be an inflation problem with gas prices (refineries of the world need to duplicate) combined with their minimum wage passage (as usually happens). Recession?!

Posted by: chrys at Saturday, May 03 2008 11:54 AM (7lDA5)

The media turned its attention to unemployment and guess what--the unemployment rate dropped!

Posted by: Woody at Saturday, May 03 2008 07:37 PM (Eb/8J)

6 0.6% growth in the economy, more jobs created in the 1st quarter than folks who lost jobs doesn't equal a recession. But... 4.69% inflation (4.28% in January, 4.03% in February and 3.98% in March) in the first quarter isn't good news. In fact, with the absolutely stupid energy policies our political masters are intent on pursuing, we may well be on the verge of "stagflation"--low growth combined with inflation. The way out: The Fair Tax (just read the books--both of 'em--by Linder and Boortz) Drill for oil here and build new refineries Build nuclear power plants to wean the U.S. from using fossil fuels for power generation (pebble bed reactors are safer and less expensive to operate than almost anything save hydropower) and provide ABUNDANT electrical power STOP burning food (ethanol) Taking control of our own energy needs will keep the Saudis and others from dictating rising food prices to us (what do you think farmers must do with the cost of diesel, etc., they need to manage their fields? Pass it down the supply chain, of course) 10% across-the-board duties on ALL imports (depends on the 20+% savings in American delivery to consumer resulting from the Fair Tax) to add incentive to bring back manufacturing ceded to offshoring gluttons The real, structural, problems with the economy--taxes, energy, exporting manufacturing--are things our political class are too stupid, greedy, short-sighted, cowardly, corrupt and just plain stupid to deal with.

Posted by: David at Sunday, May 04 2008 09:03 AM (eRsoy)

7 The 2001 recession (often dubbed the "Clinton" recession) originally had low, put positive GDP gains that were later revised downward. Don't be surprised if the same thing happens here.

Posted by: e. nonee moose at Tuesday, May 06 2008 09:16 AM (dlFaD)

8 Moose, I'll not be one surprised, but so far the indicators don't show that. Besides, a recession, by definition MUST be six consecutive months with negative numbers... that has not happened and things are beginning to pick up.

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