There Is No Recession

The NYTimes has a remarkably even-handed treatment of the value of the US dollar and even says that there are Some Signs of an Upturn for the Dollar. What you will not read in the NYTimes is that in spite of all the articles that have been printed about the US economy being in a recession, it really isn't.

Economists define a recession as two or more quarters of negative GDP growth. Larry Elder, writing in the Washington Times, correctly states that "... since the recovery began in President Bush's first year in office, we have had zero quarters of negative economic growth, let alone consecutive ones."

The US News & World Report writes about The Recession that Wasn't:

It's not just the 1Q number that gives me hope. The jobs numbers—both initial unemployment claims and monthly payroll numbers—are also way below levels commonly seen during recession. Plus, corporate profit growth outside of financials and housing remains strong. Simply put, the recessionistas—to borrow a classic Kudlow zinger—are running out of time with both monetary and fiscal stimulus (bleh!) kicking in gear and the credit markets on the mend. If 2Q isn't negative, then what quarter will be negative, if any? Even the NBER doesn't declare recessions when the economy never actually has a single down quarter.

Journalist Greg Wilcox says that we could be out of this recession before we're in it:

[Richard A. Weiss, chief investment officer and executive vice president at City National Bank] said that, historically, once consumer confidence hits bottom, the economy begins its recovery.

Guess what? The Baltimore Business Journal reported Friday that the new Consumer Attitudes and Spending by Household Index survey showed that consumer confidence hit 39 this month, up from its record low of 29.5 in April.

Bloomberg wonders, What Recession?:

"Why, if it's a recession, are all the economically sensitive stocks leading the market?'' said James Paulsen, the Minneapolis-based chief investment strategist at Wells, which oversees about $220 billion. "They were priced for consumer death, and now we're finding out not only are they not going to die, but it may not be all that bad.'' . . .

Companies aren't expressing "gloom and doom,'' Barton Biggs, a former Morgan Stanley strategist who now manages $1.5 billion at Traxis Partners in New York, said in a Bloomberg Television interview. "Things are not as bad as you would believe from listening to the press and some of the Wall Street commentators.''

Even Paul Krugman of the New York Times writes a headline reading, Bad news: No recession. Of course, it takes an ultra-liberal like Krugman to put a negative spin on tens of thousands of Americans actually keeping their jobs.

One thing to keep in mind is that economic numbers are often revised months after the initial numbers come out. That's because all the data just can't be collected that fast. For instance, it wasn't until President Bush had been in office for almost a year before economists finally admitted that the recession began Clinton's watch.

But for now, there is no recession and we have the numbers to prove it. Even a Democrat congress couldn't undo the effectiveness of the Bush tax cuts.

One final note: I remember how Democrats and their MSM mouthpieces castigated Bush for talking about how the economy was in recession during his debates with Gore, speaking about "self fulfilling prophecy". Yet now that a Republican is in the White House they don't seem to have a problem talking about a "looming recession", runaway inflation and even the crash of the dollar.

I guess it's OK to scare the voting public if it will scare them into voting for an inexperienced, naive junior Senator who just happens to be a Democrat. Let's hope the American public isn't that gullible come November.

Blog post #6983 in category Economics
posted 11 May 08

Posted by yambag on Friday at 10:36 AM

Posted by yambag on Tuesday at 1:42 PM