Why Isn’t This A Recession?
March 14th, 2008 at 11:31am Don R. Gugliuzza
Our dollar is at it’s lowest level in history. Our budget deficit is higher than ever. Oil prices are at an all time high. Wages are stagnent. Diesel fuel is is at $4.00 per gallon raising the cost of transportation of goods to all time highs. People have to choose between having fuel to get to work and to buy food. Our President’s failed economic policies and our Congress’ willingness to go along with them have caused this situation.
Even though we might think this is a recession, it isn’t. Why? Because our politicians have decreed that it’s not
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3 Comments Add your own
1. Samal | March 15th, 2008 at 3:16 am
No, economics 101 decrees we are may not be in a recession (it is always determined after the fact).
As a matter of fact, the low dollar is one of the reasons we weren’t as of last quarter. We have increased our exports dramatically thus keeping employment relatively low for an economic slowdown.
Wages have not been stagnant, they increased 6.1% in 2007.
Fuel prices increases are also driven by the dollars drop. Imports cost more. In a sane world this would encourage us to find oil here, but as a nation we aren’t sane when it comes to using our own oil.
The fact is that a recession is overdue! It happens every 3 to 5 years. The fact we haven’t had one worth mentioning since 2000 under the previous President may be partially due to this President’s economic policies.
2. Don R. Gugliuzza | March 20th, 2008 at 3:27 pm
Just a few comments regarding your last post. Just today the Conference Board, a business backed research group, issued a report indicating that the economic indicators that predict where the economy is headed, slipped again fro the 5th straight month.
Also today, it was reported that a well respected economist, Lakshman Achuthan, the director of the Economic Cycle Research Institute, has said that we are in a resession. This is the group that forecasts a number of economic indicators such as employment, inflation and production from various businesses and, until now would not join other economists who have said we’re in a recession.
I have researched wage growth for the 12 months preceeding February of this year. The Bureau of Labor Statistics has indicated an anemic 3.4 % increase. Your 6.1% increase seems to be quite abit higher but I don’t know what time period you covered.
Not being an economist, as you might have alreagy determined, I have to rely on those who are. So, my friend, I will continue to believe that we are in a resession and that it’s going to get worse before it gets better.
3. Samal | March 20th, 2008 at 7:38 pm
Don, thanks for the reply.
Please note I did not say we were not in a recession, I answered your question:
By informing you that it isn’t the politicians who declare a recession or not, but rather it is economics 101 that determine that. You’ll also note that I clearly said a recession was overdue. Recessions are what allow all capitalists to readjust and eliminate waste and control from our business and our homes.
but it is really a
Thank you for correcting my number, I had typed that one wrong, my numbers showed 3.1% but I like your 3.4%. I hit the 6, instead of the 3 sorry.
Do I agree we are in a recession? There is definately a slowdown, but the Bureau of Economic Analysis showed January 2008, real disposable personal income increased 0.1 percent (.3% total). The relatively slow .6% growth in Q4 of 2007 means it is definately possible.
But to summarize both of your comments using a well known phrase, a recession is when your neighbor loses their job, a depression is when you lose your job.
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