Thursday, March 03, 2011

Recession's Over, Economy's in Recovery: It's Time for Some Gloom and Doom from Time Magazine

One thing you can always count on at (or towards) the end of a recession? An "end of the world," the "sky is falling," "it's never been this bad," "gloom and doom" article in Time Magazine, here are 4 examples:  

1. "The Recession: Gloomy Holidays--and Worse Ahead" (December 1974):  "Some consumers are so alarmed that they are muttering about a return of the Great Depression of the 1930s.  Are even harder times coming? Probably. The recession still has some way to go, and though economists fore see an upturn some tune by next year, it is difficult to pick its timing and predict how far down the economy will go before it turns back up. Indeed, the course of the recession so far is something of a lesson in the hazards of economic forecasting: its length and virulence have surprised almost everyone."

"Recession: Why We're So Gloomy" (January 1992):  "'Whining' hardly captures the extent of the gloom Americans feel about the current downturn. The slump is the longest, if not the deepest, since the Great Depression. Traumatized by layoffs that have cost millions of jobs during the slump, U.S. consumers have fallen into their deepest funk in years.

"Never in my adult life have I heard more deep-seated feelings of concern," says Howard Allen, retired chairman of Southern California Edison. "Many, many business leaders share this lack of confidence and recognize that we are in real economic trouble."

Says University of Michigan economist Paul McCracken: "This is more than just a recession in the conventional sense. What has happened has put the fear of God into people."

3. "
The Long Haul: the U.S. Economy" (September 1992) "If America's economic landscape seems suddenly alien and hostile to many citizens, there is good reason: they have never seen anything like it. Nothing in memory has prepared consumers for such turbulent, epochal change, the sort of upheaval that happens once in 50 years. That may explain why so many polls reveal such ragged emotional edges, so much fear and misgiving. Even the economists do not have a name for the present condition, though one has described it as "suspended animation" and "never-never land."

4. "Are America's Best Days Behind Us?" (March 2011):  "It is now possible to produce more goods and services with fewer and fewer people, to shift work almost anywhere in the world and to do all this at warp speed. That is the world the U.S. now faces. Yet the country seems unready for the kind of radical adaptation it needs. The changes we are currently debating amount to rearranging the deck chairs on the Titanic."


At 3/04/2011 7:10 AM, Blogger niknaknoo said...

The end of a recession? No, this is just the beginning...

At 3/04/2011 7:55 AM, Blogger geoih said...

One of the problems with the "recession's over" statement is that the standard method for declaring the end of the recession is based on marking the end of the contraction. It isn't based on the ecomomy being fully recovered.

It's a bit like telling a gun shot victim that they are all better because the bleeding has stopped. There's a bit more to recovering from a gun shot wound than stopping the bleeding.

All of the cheerleading typically present on this web site aside, there is plenty of evidence that the present economic bleeding has not stopped.

At 3/04/2011 11:01 AM, Blogger Kevin Kristy said...

Recession is over? Maybe for the liberal elites at UM and their 6 figure tax-funded salaries and lifetime bennies.

Not for me it's not. Not with gas prices at $4. Food prices through the roof. With my home equity at $0. With my 401k depleted. With a job that pays half the salary I was making in 2006.

Yep. The economy is booming.

At 3/05/2011 2:16 AM, Blogger OBloodyHell said...

> Not for me it's not.

Ah, well, that's the metric we should all be using, innit?

"Kevin's S1"

"Yes, this week Kevin's S1 Index showed a sharp downturn as gas prices rose two cents a gallon, leading to a 10% reduction in disposable income. People everywhere are reeling from the shock."

"After the new job started, Kevin's S1 Index is now doing much better than it was in 2009, with various sub-indicators up across the board. No evidence of any resultant increase in IQ, nor has any reduction in the closely related Kevin's Narcissism Index been noted".

At 3/05/2011 7:28 PM, Blogger Taleb's Drudge said...

Things are much better for the ~80-85% that remained employed.

However, there's currently a corporate debt bubble (esp. in junk). What do you (anyone) think will be the consequences if this bursts? I'm not sure that I know. Will it cause a broad downturn?

I'd just like some outside opinions as I've been pondering for about a month.

PS - even if you don't think there is a bubble, I'd like to know what you think would happen if there were a bubble that popped.

At 3/05/2011 10:59 PM, Blogger VangelV said...

Not for me it's not. Not with gas prices at $4. Food prices through the roof. With my home equity at $0. With my 401k depleted. With a job that pays half the salary I was making in 2006.

Yep. The economy is booming.

Don't you know that there is no inflation? You must be imagining higher prices for food and energy because the Fed, BLS, and other institutions are telling us that there is no inflation in the system. You must be imagining the problems that you are describing because according to Mark and many of the people he quotes there is no inflation. Without inflation the GDP growth is quite healthy and the economy should be growing. That means that people like you and me are just too dumb to see it.


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