Comments on: Let’s stop talking about a ‘double-dip’ recession

By: ptiffany

ptiffany — Fri, 20 Apr 2012 22:23:39 +0000

Some forty years ago when economists began building algorithms for [American] econometric models, it became clear that there is a breakeven point in GDP growth where growth balances the steady increase in labor pool growth related to popultion growth. This breakeven point was estimated to be in the range of three to five percent.

The definition of a recession became two quarters of less than breakeven growth. The definition of a depression was two years of [average] less than breakeven growth.

A year ago, the CBOE developed a rule-of-thumb figure of 2.75%.

Putting this together, we can understand why Paul Krugman, Nobel Laureate in Economics and a number of other bona fide economists (not self-professed pundits with rosy agendas) have been saying for two years now that the United States is in a depression that Krugman calls the Third Depression.

Since the Great Recession started in 2007, it’s clear that the United States has been in a depression for over four years, soon to be five and expected to last at least another five years.

There have been several stories, some carried by the mainstream networks that the current depression may actually be deeper than the Great Depression, especially in light of key statistics that have been deliberately distorted over the years to make the economy seem less sick than it is. Source: United States Labor Department’s Bureau of Labor Statistics (BLS). The “official” unemployment rate is a deliberate distortion, under-reporting under-employment and real unemployment using the definition of people who were working and could still work, but are not rather than the lie that they’re “no longer in the employment pool” and (adding insult to injury) “no longer looking for work”.

Maybe you’ve noticed the slew of articles over the past five years that claim that housing is “turning around” or “bottomed out”, only to find it’s not true. Just in the past month up until yesterday, AP had side-by-side articles that claimed that housing was up with another that said it was down.

What do most people call these kinds of statistics? Lies? Something else?

By: jbeech

jbeech — Fri, 20 Apr 2012 20:13:42 +0000

Oh please, we’ve not yet struggled above the highwater mark of a few years ago, so if we slide back before we do, it’s a double-dip. Pretty simple concept.

Respectfully,

By: GBayes

GBayes — Fri, 20 Apr 2012 08:48:25 +0000

Ledbetter’s point is valid – double dip seems to be a redundant phrase. However, considering the current state of the world’s finances, I would probably hold out a few more years before attributing any fancy names to anything we are going through. After all, it’s not like we have fixed anything, we’ve just chucked more money at it and hoped for the best.

By: KnaveDave

KnaveDave — Thu, 19 Apr 2012 22:55:05 +0000

This is why I started writing The Great Recession Blog last year. I constantly saw the press parroting terms like “recovery” or “end of the recession” that the government was using as if they accepted those terms as fact. I saw it so much, I said, “Someone has to start cutting through all the knots to free up the truth.”

Likewise I see people parroting the government’s declaration that the Great Recession ended in 2009 as if it were a fact — “a recession that officially ended in June 2009 even though nearly all of its symptoms continue through to today. The patient was pronounced well long ago when his heart wasn’t beating, just because his arm went up in rigor mortis.” ( http://thegreatrecession.info/blog/2012/ 04/economic-news-biased-by-relentlessly- rosy-glasses )

–Knave Dave

By: REMant

REMant — Thu, 19 Apr 2012 00:54:31 +0000

Ppl who don’t factor in the increase in printed dollars can’t have much of an opinion. The 1937 “dip” BTW was a worse contraction than the first, and caused precisely because of similar measures taken then to reflate. The Depression didn’t end until the forced austerity and huge investment in plant required by WWII.

By: txgadfly

txgadfly — Wed, 18 Apr 2012 21:25:50 +0000

When you cannot score, move the goalposts!

The Government ought to be required to publish what employment and GDP figures would be using the same methods and definitions used in calculating such things in 1931, as the bottom of the Great Depression loomed. It should have to publish these “unadjusted” and “unredefined” numbers alongside our “modern” ones.

We have not come out of the massive economic event that began in the USA in early fall of 2007. Call it a “rocking chair” or call it a “depression”, this has been a horrible experience for most Americans. And it continues. Government numbers simply have the credibility of a Soviet Five Year Plan. Lies, lies, and more lies at higher and higher prices.

Too many well off people cannot comprehend anything at all beyond their front door, or do not care to. So they claim that familiar claim “Happy days are here again!”

By: niblick3

niblick3 — Wed, 18 Apr 2012 14:55:05 +0000

You should look at your definition of “recovery”. Also, you should stop using any government agency (bureau of anything) as a reference for any statistical data, they all lie, bend, augment, or whatever they can to deceive the American public. Just look at the state of our government….why believe anything they put out.

By: Pete_Murphy

Pete_Murphy — Wed, 18 Apr 2012 11:31:09 +0000

We keep worrying about a double-dip recession because the underlying cause of the first one – global trade imbalances – have gone unaddressed and are as bad as ever. The U.S. is desperately dependent on unsustainable deficit spending to counter the effects of our trade deficit and maintain an illusion of prosperity. It can’t and won’t go on.

By: Dafydd

Dafydd — Wed, 18 Apr 2012 10:27:59 +0000

How about defining a double dip as being when an economy slips back into contraction without having surpassed total output at the previous peak.

Seems like a good definition to me.

By: mynamehear2

mynamehear2 — Wed, 18 Apr 2012 06:04:47 +0000

Couldn’t agree more with this assessment, and what’s hilarious is that since missing the blatant downturns (real estate implosion/CDO maelstrom) everyone and their dog is becoming soothsayer’s. Wild predictions are the call of the day- with no real timing involved since timings are so “hard to predict”.

Sorry folks, come to me with your crystal ball when you’re at least 50% right (which is basically nobody). Until then,stick with the here and now.