Thursday, October 30, 2008

Obsessing the Recession

I'M NOT sure when I first learned that two plus two equaled four,  but it has somehow stuck with me for many years.  But not being a disciple of  Pythagoras, I continue to have problems with simple numbers as well as explanations of why numbers are  so important in defining an economic recession.  It seems ages ago when the gurus who  inspect such events began to wonder when, if ever, the U.S would finally sink into a recession, as if everyone who had lost a job along the way didn't already know.  Forever in denial, the experts cautiously inched backward with such descriptions as downturn, economic  stagnation, slowdown, contraction   and  slump.  But recession?  Well the GDP and the real GDP, it says here,  have declined .3 and .8 pct.  respectively.   And real personal consumption is down .04 pct.  You could have fooled me.  

Alas, the euphemistic days are over.  Now the talk is about when did the recession actually begin! Writing in the Wall Street Journal, Robert Hall, Stanford professor and chairman of the National Bureau of Economic Research Committee,  says there is a chance we can finally know the answer. He says:  "...the severity of the credit crunch could be enough for some committee members to make a recession conclusion as early s next month."   

Good.  I hope that such clarity  comes in time for Christmas shopping.   With the semantics of the country's recessive economic ills out of the way, it's time to head back to the shopping malls, just as George Bush once urged all Americans to do as his earlier remedy for a, um, downturn. Meantime,  the Fed has cut prime interest rates another .5 pct. to jump start the economy.  With the rate now shaved to a mere 1 pct., without any discernible help for the economy in the wake of all previous cuts, I wouldn't be surprised if the future cuts will be in eighths to give the Fed experts more room to convince the public that it is indeed trying to help us out of this mess.    Don't know that even that will work.  In fact until we know when the recession began, I'm not even sure that two and two are still four.  


PJJinOregon said...

I like the high medieval period because it espoused a fluid and metaphorical attitude about virginity - case in point, all the cathedrals dedicated to Notre Dame. Now, in the high period of Adam Smith/Milton Friedman and free market economics, we adhere to a similarly fluid and metaphorical attitude about recessions. It's not about facts, Abe, its about faith. Kneel down.

Grumpy Abe said...

Always a pleasure to hear the wisdom of one of the surviving scholastics from the Crusades. As you note, the period did produce Notre Dame (the cathedral, not the ghost of the football team!). Shall we now move on to Florence?