Skip to comments.NBER: U.S. In Recession That Began Last December
Posted on 12/01/2008 1:54:42 PM PST by rabscuttle385
It's official: The United States is in a recession -- and it started a year ago.
The nation's economy peaked, and the recession began, in December 2007, the National Bureau of Economic Research announced today.
(Excerpt) Read more at washingtonpost.com ...
Can’t wait to see whose taxes will be raised, and whose taxes will be cut. Things have taken a different spin.
This is Bull. If anyone is to blame it is the Newly elected Democrat Congress from 2006 who took office in January of 2007.
The good news is that by the time the economists discover a recession, it is usually almost over.
As the left again seeks to redefine more words to their advantage.
The economy (growth) peaked. So, if growth declines two consecutive quarters, that is the new socialist definition of recession, as opposed to the dictionary: two consecutive quarters of negative GDP.
This is the same as saying government spending was predicted to grow 9%. This year we are only spending 8% more, therefore, we are cutting spending 1%.
Don't fall this historical deconstruction.
I fail to see what is official about the opinion of a single not for profit group.
WTH is the “National Bureau of Economic Research”?!
Lets make it sound even worse... by redefining “recession”.
My understanding, the term “recession” is defined (in economic terms) as a decline in a country’s gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.
But the “official announcement” uses the other, less accepted definition of the term as a downward trend in the rate of actual GDP growth as promoted by the business-cycle dating committee of the National Bureau of Economic Research. That private organization defines a recession more ambiguously as “a significant decline in economic activity spread across the economy, lasting more than a few months.
And anyone want to take a stab why this is definition being used? Think about it - if a recession is claimed to have developed in the last couple of months, then some can be attached to Obama. But backing up the “start date” to December 2007 (the peak of economic growth) would make it more of a “Bush problem”.
We just can’t have Obama taking ANY blame.. after all, he is the (ineligible to serve as POTUS) OBAMAMESSIAH!!!!
Well hell, even then it can't be a recession, because IIRC, in 4q of 07 GDP went DOWN .7, in 1q of 08 it went up .9, and in 2q of 08 it went up 2.3....HOW IN THE WORLD IS THAT A 'DOWNWARD TREND'???
I mean, I thought economists were scientists of a sort how is an ambiguous definition ANY SORT OF SCIENCE?????????
Answer: it isn't. This stinks like a rotten fish of politicizing.
Erm, doesn’t the economy need to, well, RECEDE in order for there to be a “recession?”
Just not growing as fast as one would have liked is not receding.
As the left again seeks to redefine more words to their advantage.
Exactly! I will not associate with those that do not renounce the current rash of dem ploys to ruin the country!
“The good news is that by the time the economists discover a recession, it is usually almost over.”
I wouldn’t count on this being a short recession. The Fed’s usual tools may not be effective because the cause of this recession is different.
” as opposed to the dictionary: two consecutive quarters of negative GDP.”
The NBER has been the referee of recessions since the 1920s. They don’t use the definition of “two consecutive quarters of negative GDP” no matter how often that idea gets repeated.
It’s Orwellian. I guess we’re all free to use any damn definition we want for any damn term describing the economy. I’ve never before heard a slowing in growth described as a recession. Up until this summer when did the economy contract?
Democrats disgust me as much as they do you but I cannot for the life of me understand why you cant seem to comprehend that Republicans also had to vote yes in order to get these Bills out of Committee and onto the floor for a vote, where once again Republicans also had to vote yes in order to pass the Bill. This was a joint FUBAR, not solely the Dims.
Then to top it off, our compassionate Republican President put his signature on the Bill and made it all happen!
Continue placing the blame on the Left and you’ll never understand how our government functions.
“Democrats disgust me as much as they do you but I cannot for the life of me understand why you cant seem to comprehend that Republicans also had to vote yes “
When did the republicans vote to change the definition of recession? That is what I am referring to. OOOPS That is to which/what I refer?
Read the last two paragraphs
Two of these eight Air Heads are based in Berkeley Ca and are MARRIED TO EACH OTHER!!!
I don’t think it’s exactly Orwellian. The NBER is the organization that has been calling recessions for almost 90 years. They haven’t been hiding the fact that they don’t use the pop-definition of what a recession is. I’s posted at their website.
“Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBERs recession dating procedure?
A: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. As an example, the last recession, in 2001, did not include two consecutive quarters of decline. As of the date of the committees meeting, the economy had not yet experienced two consecutive quarters of decline.
Q: Why doesnt the committee accept the two-quarter definition?
A: The committees procedure for identifying turning points differs from the two-quarter rule in a number of ways. First, we do not identify economic activity solely with real GDP, but use a range of indicators. Second, we place considerable emphasis on monthly indicators in arriving at a monthly chronology. Third, we consider the depth of the decline in economic activity. Recall that our definition includes the phrase, a significant decline in activity. Fourth, in examining the behavior of domestic production, we consider not only the conventional product-side GDP estimates, but also the conceptually equivalent income-side GDI estimates. The differences between these two sets of estimates were particularly evident in 2007 and 2008.”
Most people haven’t heard of the NBER because most people aren’t fascinated by economic arcana. Sports tend to be more entertaining. It’s a research organization studying the economy, independent of both government and business.
“When did the republicans vote to change the definition of recession? That is what I am referring to. OOOPS That is to which/what I refer?”
Politicians don’t get to set the definition. The NBER has been the referee since 1920.
Thanks, and the female half has been named by Zer0 as an advisor.
Oh dear God! We can't have people being married, can we?
W has sucked at economics since day one. This is his mess.
Private, non-profit economic research group. Notable members included Anna Schwartz, Milton Friedman, and Ludwig von Mises. Oh, and my econ prof (a student of Milton Friedman) last summer mentioned the group to my class.
The National Bureau of Economic Research is a bunch of geeks that chew numbers, economists. Nothing says they are Dims or Reps.
If bush hadn’t signed the Bill to get subprime loans out to the poor illegals and poor blacks, most of this recession never would have happened. Now, when it becomes a depression, that’s when it will be all Bush’s fault. His administration is still in charge and they have had the economic ball in their hands for the past 8 years.
Under OBamBam??? Tax cuts?? No way, no how. Never gonna happen.
Congress critters may pass another “economic stimulus package” to send out checks to bribe voters, but that is not a tax cut, and does not have the same effect on the economy as a real tax cut.
Martin Feldstein is one of the eight members that called the recession. He was President Reagan’s principle economic advisor.
“The NBER has been the referee since 1920.”
I have been led to believe that a “recession” is defined as, “Two consecutive quarters of negative GDP.” Am I wrong?
Then this one is going to be a depression.
it’s an odd recession in my valley.
it’s shop ‘till you drop here.
Take courage. Our illustrious Fed Chief and Treas Sec, who consistently told us that we were not in a recession for 6 months after we were in one is now telling us that we will definitely not have a depression. Fell better?
I’ve been around for 50 years. “Reputable” or not I’ve never heard of them. They might as well be space aliens. “Scully!”
These guys aren’t economists, they are historians.
I have to look at the situation with humor. We're along for the ride. And I mean ride
I've been stating for at least 6 months that we have been in a recession all year, and have even "eaten crow" about the fact that I could not defend my position to the Freepyannas who have to have it broadcast on an IMAX screen before they even consider believing it.
I knew we have been in a recession all year. It is flaming obvious to anybody who has been out of work for months or anybody who has been trying to expand a business.
From October 22, although I have been saying this since spring!
FWIW, I have felt weve been in a true recession all year, masked by fraudulent government accounting, off the books war spending and a tax-payer funded $150 Billion shopping spree. I get lambasted thoroughly every time I say this and am routinely commanded to prove we are in a recession. I agree we are in a recession and even the pundits are saying 3rd quarter GDP numbers will be negative. The recession is too deep to hide anymore.
I wasn't alone. There were others, such as this from NVDave on October 22.
I believe (and have stated before here on FR) that I thought that the earliest signs of the recession were see in December 07 to Jan 08. Starting in August, the recession was undeniable, but too many people were pointing at only the headling GDP number (3.3%) which was mostly based on exports and a broken GDP deflator.
All the while, we were doubted by a parade of people such as mlocher who said this...
I am not calling you a conspiracy nut, but I would like to see the data that is driving you to this conclusion. Can you provide that please?
when I said this...
We have been in a recession since last December but the cooked government numbers dont admit to that fact. Unemployment is higher than 6.5% but the cooked government numbers dont admit to that fact. Yes, I sound like a conspiracy nut, but the fact is I know the truth and the government doesnt want you to know the truth
The Freepyannas just couldn't believe we were in a recession unless the GOVERNMENT confessed to it. Do your OWN homework. Figure the facts out for yourselves. Don't wait until after months of government lies designed to artificially bolster consumer confidence to come to the obvious conclusion. Open your eyes and just look.
Still and all, it is nice, joined with a handful of other astute observers here, to be finally...
We Are Vindicated!
I was right all along, despite suffering a parade of Freepyanna jeers. "Those who don't know history are condemned to repeat its mistakes."
“I have been led to believe that a recession is defined as, Two consecutive quarters of negative GDP. Am I wrong?”
Yes. That definition is “pop-economics”. Somewhere up the thread I posted a link to the NBER website and their FAQ regarding their definition of recession.
Lol. Don’t let the pollyannas grind you down. That same crew couldn’t spot the mother of all housing bubbles as well.
My biggest problem is raw frustration. You try to warn people to protect their life savings, and they are just blind to it, listening to the shiesters in the media, and following the markets all the way down.
You want to see people protect their money. The big boys already got their 9 figure bonuses on the backs of the little guy, and now the talking heads in cahoots with the same big boys are saying “stay in the market, best time to buy.” Then stocks get pumped up with cash from the little guy, while the big guys sell out on the fattened stocks.
I’m not ground down, just frustrated. You want to see people protect their life savings, but they just won’t open their eyes. I’m racked with frustration. People here know the media lies and has an agenda, but when it comes to the economy, they still believe that same duplicitous media machine, who serves the Wall Street cronies, the Goldman Sachs hacks. I don’t get it.
We use words to communicate and when the term “recession” is thrown around to describe something less than hard times it is done for a reason. I would suggest certain individuals and groups have political, social, and legal reasons to exaggerate the economy of the past seven or eight years. Their use of words to describe events which are not accurate is Orwellian.
Just so I can establish what you are saying- are you saying that the organization that has refereed recessions since the practice began in 1920 should defer to your opinion?
I’m saying I don’t give a damn what they call it or what they think.
Let’s say some group (somewhere, representing whatever) declares “We are the official definers and we have decided the 1930’s were actually a time of prosperity.” Would their saying so make it so? I don’t even care if they are mandated by a branch of the government to make such proclamations.
The economy is cyclical. Always has been, always will be. I could predict a boom ahead but that doesn’t mean we are in it now. The same goes for last winter. It was easy to predict a recession in the near future but that didn’t mean we were in one then, regardless of what this bunch says now.
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