Posted on 04/15/2010 8:23:34 PM PDT by blam
Political Earthquake Coming, Where Is The Economic Recovery?
Economics / Recession 2008 - 2010
Apr 15, 2010 - 02:46 AM
By: Gary North
"Mirror, mirror on the wall. Who's to say the economy has stopped its fall?"
"The NBER, dummy!"
The National Bureau of Economic Research (NBER) is a private, nonprofit organization. Begun in 1920, it has focused on collecting and analyzing economic data on the U.S. economy. It is nonpartisan. Sixteen of the past 31 American economists who have received the Nobel Prize have been members of the NBER. It is noted by the precision of its research and the uniquely boring style of its publications. As young assistant professors learn early in their careers, nobody ever gets fired for quoting an NBER publication . . . or promoted.
The NBER somehow is universally regarded as having the final say about when a recession begins and ends in the United Stares. This is not to say that other organizations slavishly adhere to the NBER's assessments. But, as far as textbook accounts of when a recession begins and ends, they conform to the NBER's assessments.
There is an NBER committee that makes this assessment: the Business Cycle Dating Committee. It meets infrequently. From July 2003 until January 2008, there were no meetings. In December 2008 there was another meeting. The committee announced that a recession had begun in December 2007. This, you may recall, was after the U.S. government had nationalized the mortgage market (September), followed by the bankruptcy of Lehman Brothers and the conversion of the major investment banks to commercial banks that were eligible for TARP bailout money (October). You couldn't fool the committee! A recession was in progress.
The committee had its first meeting since December 2008 on April 8, 2010. It did not announce the end of the recession that began in December 2007. It released this statement.
The Business Cycle Dating Committee of the National Bureau of Economic Research met at the organization's headquarters in Cambridge, Massachusetts, on April 8, 2010. The committee reviewed the most recent data for all indicators relevant to the determination of a possible date of the trough in economic activity marking the end of the recession that began in December 2007. The trough date would identify the end of contraction and the beginning of expansion. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature. Many indicators are quite preliminary at this time and will be revised in coming months. The committee acts only on the basis of actual indicators and does not rely on forecasts in making its determination of the dates of peaks and troughs in economic activity. The committee did review data relating to the date of the peak, previously determined to have occurred in December 2007, marking the onset of the recent recession. The committee reaffirmed that peak date.
This press release is representative of the style of NBER publications. Wise people do not read NBER publications while smoking in bed.
Translating from official NBER prose, this document reveals what most people except stock market investors already know: the economic recovery is weak at best and non-existent at worst. The December 2007 date was a good indication of when the recession began. There are insufficient unambiguous data available to indicate when the trough occurred.
At the next meeting, held perhaps a year from now, the committee may decide that the trough took place in the spring of 2009. Or it may identify another period. Or it may again refuse to identify any end. But the fact that the committee refused to commit at the April 8 meeting is additional evidence that experts among business cycle economists are not impressed with the extent of the recovery.
[snip]
Cambridge? That explains it. Obama said the NBER acted stupidly and Louis Gates said the recovery is at your momma's house.
Even stock market investors know about the lack of an economic recovery. Stocks would be much higher based on expectations if investors were optimistic. That, and volume would be much higher.
The stocks started down when they were over 14k. They went down to 9k. Now they are averaging at 11k. What is so great about that? Most of the increase off the 9k is due to Government printed and borrowed and spent money. Not Money created by Free Enterprise. The Fed is stuck with 0 intrest rates because of the ARMS coming up and they can not raise rates. Biz is in a quandry on what to do because Obama is trying take over the whole shooting match. This is a mess. The House of Cards is going to collapse when they can no longer borrow money to prop it up at low rates and they can not collect enough tax to pay the bills. The only option left. Print Baby Print.
Michael Smerconish, for one, can look at GM losing $4B in a quarter and say “the economy’s not bad.” Then he goes on to say that the doom and gloom is media hype because”it sells newspapers.” Though he’s not personally of any consequence, he shows how tightly a certain species of quasi-Rino will grasp the poor bargain they made in voting for Obama.
There is no recovery.
This indicates that the recession has been going strong for over two years.
At what point does recession become depression? On what basis is the determination made?
P.S. Thanks, Dems, for such economic illiteracy (or innumeracy) that you can consistently do the diametric opposite of what should be done for the economy, yet still stand up with a straight face to try to scare people that Republicans don’t care about jobs.
Michael Smerconish.....what a joke.
The public sector spending bubble has to burst.
>In December 2008 there was another meeting. The committee announced that a recession had begun in December 2007. This, you may recall, was after the Democrats had control of Congress for a year
While the Democrats were in charge of Congress for a year there is little to no proof that a Republican-controlled Congress would have avoided the recession (like the housing bubble). It may have delayed it, though.
Also, there is little evidence that they would curtail spending in favor of paying off the national debt.
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