Still Can't Call it a Recession

[Pangloss]

http://abcnews.go.com/Business/Economy/wireStory?id=4952742

 

The definition of "recession" is two straight quarters of negative economic growth. That still hasn't happened, in spite of poor NBC News' desire to call it one. (Kinda funny how when they decide to call things "what they really are", they oddly turn out not to be those things! The "civil war" in Iraq comes to mind.)

 

Perhaps new definitions are needed. I get annoyed at our media-driven sensitivity to the plight of the single-working-mother-of-three, but the economy has grown so large that problems like the housing market collapse can have far-reaching impact even if they don't produce an outright recession, and that's worth acknowledging with SOME kind of moniker. Perhaps we can divide it up into categories of recession or something, like with hurricanes or tornados. (lol)

[Reaper]

Perhaps new definitions are needed. I get annoyed at our media-driven sensitivity to the plight of the single-working-mother-of-three, but the economy has grown so large that problems like the housing market collapse can have far-reaching impact even if they don't produce an outright recession....

 

That's cause our media is only interested in stories that they consider "interesting" and as such bring in more viewers and money. They can't be bothered to take the time to do things right.

[ecoli]

whether it's media driven our not, the perception is that we're in a recession, or at least in a period of economic hardship. While this might not result in the great depression, relatively few of us, especially the post baby boomers, have had to deal with economic hardships like the one's were seeing.

 

I'm expecting to see increased anxiety and depression to go along with the credit card debt.

 

I, myself, feel it to, though I don't have too many bills to pay. I'm worried about labs not getting grant money, cutbacks on programs I want to enter, gas prices, paying for luxuries, food prices, etc and etc. It's a new (and frightening) thing.

 

While I have no doubt will survive, everyone will have to make sacrifices, and I don't know if this country is ready to do that. Like the great depression, could this turn into a turn towards 'socialism'?

[iNow]

I don't care what the textbook definition is of some arbitrary moniker, nor how the press applies it.

 

Times are tough.

Money is tight.

It's stressful and anxiety provoking.

 

Call it what you will, I know there are scores of people out there who are far worse off than I am, and they care more about finding a way to feed their family and maintain the roof over their heads than they do what you call the present challenges of the economy.

 

 

I do, however, like your idea of categories, like a "tropical depression" economy versus a "tropical storm" economoy versus a "hurricane" economy... but, alas, that's like our color coded threat level system from the department of homeland security, and really does nothing to address the problem itself.

[Pangloss]

Oh dear, I waltzed right into that comparison! But I guess we agree it would be helpful. I'm almost as sick of the anti-media propaganda machine as I am of the media propaganda machine. Anything that would help people get a better measure of things than the "working single mother of three" barometer would seem to be a good thing.

[bascule]

http://abcnews.go.com/Business/Economy/wireStory?id=4952742

 

The definition of "recession" is two straight quarters of negative economic growth.

 

That's the definition the media tend to use, however that's not a technical definition of a recession.

 

A recession is a period of decline in real economic growth (typically for two quarters in a row). The question you have to ask about growth in the GDP was whether it was growth in real dollars, or simply due to inflation.

 

http://www.reuters.com/article/etfNews/idUSN0230080320080602

 

The United States is in a mild recession, which will lead to a modest recovery as concerns over the housing market and inflation linger, Morgan Stanley's (MS.N: Quote, Profile, Research) chief U.S. economist said Monday.

 

Richard Berner said the problems in the housing market still have "a long way to go" due to excess supply and caution by both mortgage lenders and potential buyers over price stability.

 

Inflation, meanwhile, is elevated and should pressure corporate profitability this year.

[SH3RL0CK]

whether it's media driven our not, the perception is that we're in a recession, or at least in a period of economic hardship. While this might not result in the great depression, relatively few of us, especially the post baby boomers, have had to deal with economic hardships like the one's were seeing.

... Like the great depression, could this turn into a turn towards 'socialism'?

 

Hmm, interesting viewpoint and I agree that the perception is that the economy is bad. And I also agree that the country could be turning towards the left and towards more socialism.

 

But perception isn't reality, and the reality is that the current economic trend is not at all bad (though I will make no prediction on the short-term economic future). Certainly not as bad as in 2001, or in 1991, or the stagflation and gas rationing of the 70's... trust the science, which is basically saying right now the economy isn't great but isn't terrible.

[ecoli]

Sh3lock - perception of our reality helps shape that reality.

 

I was listening to talk radio this morning, and someone was doing a piece comparing news stories of the Bear Stearns crash versus Black Tuesday (1929). The media, in comparison, was MUCH more negative about Bear Stearns, despite the fact that we know we're no where near the depression level stagflation.

 

Yet, the media creates the image (because that's what sells) so that's what people believe, and that's what we tend to become.

[Pangloss]

That's the definition the media tend to use, however that's not a technical definition of a recession.

 

A recession is a period of decline in real economic growth (typically for two quarters in a row). The question you have to ask about growth in the GDP was whether it was growth in real dollars, or simply due to inflation.

 

http://www.reuters.com/article/etfNews/idUSN0230080320080602

 

Maybe, but it's funny how that never came up in any previous economic downturn. It's not just the media, it's always been the accepted measure, and it's only now that the economy isn't behaving and doing what the ABB crowd wants it to do that we suddenly learn that that was just a "technical definition" (as if this wasn't a technical measurement!) and that there are really much more important ways to measure the economy. (Like how Suzie, a working mother of three, is concerned about losing one of her three part-time jobs and can't pay for her $500,000 condo on her hairdresser's salary anymore.)

 

At any rate, saying we're in a "mild recession" -- a word that most definitely has a negative growth rate connotation -- when we've actually got a positive growth rate seems to me to be about politics, not economics. Using the word "recession" to scare people into voting properly.

[iNow]

So, who's this puppet master of yours supposed to be?

[bascule]

At any rate, saying we're in a "mild recession" -- a word that most definitely has a negative growth rate connotation -- when we've actually got a positive growth rate seems to me to be about politics, not economics.

 

You're missing the point.

 

Did the economy actually grow in real dollars? Or are we in the midst of some nasty inflation and the economy actually suffered a loss?

[SH3RL0CK]

Sh3lock - perception of our reality helps shape that reality.

 

I was listening to talk radio this morning, and someone was doing a piece comparing news stories of the Bear Stearns crash versus Black Tuesday (1929). The media, in comparison, was MUCH more negative about Bear Stearns, despite the fact that we know we're no where near the depression level stagflation.

 

Yet, the media creates the image (because that's what sells) so that's what people believe, and that's what we tend to become.

 

Its true that perception helps shape reality. But it isn't all powerful and certainly does not have as much influence on the behavior of the public as does real economics.

 

For example, if the media were claiming that we are in a depression, but I personally have plenty of money, I may become more thrifty but I'm not going to go to an extreme and will still splurge on occasion. Likewise, if all my neighbors have plenty of money, most of them will likely also continue to spend it. After all, if the media were to tell you that you were flat broke, would you believe them or would you believe what you see in your wallet?