yep, it's a recession

[mellowtigger]

As I mentioned earlier, the economy seems to be limping badly. Today, the BBC is reporting that "Recession in the US 'has arrived'".

Merrill [Lynch] said that the current consensus view on Wall Street that there is a good chance of avoiding a recession is "in denial". It also objected to the use of euphemistic terms for the state of the economy. "To say that the backdrop is 'recession like' is akin to an obstetrician telling a woman that she is 'sort of pregnant'," the report said.

Using terms like that has way too much political impact, though, so government agencies have good motivation to keep tight rein on them.

An official ruling on whether the US is in recession is made by the National Bureau of Economic Research, but this decision may not come for two years.

I wish we had a government that was believable. *sigh*  What's it going to take?  A "Citizen Oversight" agency that reports only to the people instead of to other agency figures?

Comments

[dr-scott.livejournal.com]

The NBER (where I long ago had a term-time job) is a private, nonprofit research bureau, so it tends to be slow and stodgy, but not likely to be swayed by political considerations. A recession is a statistical aggregate property that's very difficult to measure - because the available stats are taken infrequently and subject to a wide error, it's like trying to decide if you're getting shorter by a yardstick that you can only use once a month, and with a typical error of 1", with an unknown distribution of error. *Personal* recession is very obvious -- I lost my job, they cut back my hours, my sales are dropping...

[mellowtigger]

I disagree. I think they're measuring the wrong thing. It seems to me that they're still concerned with measuring the velocity of money (which is surely important for long-term national health), but I'm talking about base survival matters for individuals. I don't care if houses, cars, and washing machines are available for sale and that people are actually buying them. I care if I have enough money to do 4 things:

1. keep a roof over my head,
2. put food in my belly,
3. put clothes on my back, and
4. transport myself from point A to point B.

NBER posted a new document yesterday explaining their definition of recession. I see nothing there that looks like a reasonable indicator of ease-of-survival. Consider my 4 points again. Start measuring for those factors.

1. How many foreclosures (homes) or evictions (rentals)? How does median rent/mortgage compare to median income? If someone has no income (not the same as receiving unemployment compensation), are you measuring it?
2. How does spending on raw foods (grocery) compare to spending on prepared foods (restaurant)?
3. How does spending on new clothing (retail) compare to spending on raw or used clothing (sewing supplies, thrift stores)?
4. How do transportation costs (metro transit passes, private auto insurance, gasoline) compare to food costs?

After over 200 years, this country still doesn't have a way of measuring how easily people can afford the 4 things they really need. By the time our economy is hurting corporations in large enough numbers, there's already been a whole lot of personal suffering going on. I don't care how economists use the word "recession". I use it to mean suffering and worry, and that seems to be how other plebes use it too.

<cue music="sob story">

I've been using a borrowed O.S. license (from a generous friend) for 2 years because I couldn't justify the cost of buying a new one of my own. (And the hardware I'm running is much older.) I've been wearing busted glasses for 3 years because I couldn't afford eye exam and new glasses. (I tried 5 different shops to get them repaired but they all told me they couldn't get parts for it.) My car has had a busted tail end for 4 years because I couldn't afford to repair it either.

And all that while I was still employed. Which I haven't been in 4 months. Yes, that is all MY issue to deal with, but I talk with quite a few other low-income-or-unemployed people and I'm not the only one having problems these days. I'm on food stamps for the first time in my life (I didn't know that they're only given for 3 months! Yikes! How do people get them for longer?) and my spending on food has increased because of it... yummy in my tummy. I've sent resumes for nearly 100 appropriate job postings, but I'm still not working yet. I'm not receiving unemployment so I doubt that I'm contributing to that economic figure as I should be to properly reflect my circumstance.

If there's this much worry and suffering going on and economists can't figure it out until a year later... then there's definitely something wrong with their definition.