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US Has Been In Recession Since December 2007
The National Bureau of Economic Research said Monday that the US has been in a recession since December 2007. The NBER is a private, nonprofit research organization of academic economists who determine business cycles. The stock market took a dip on the news that reached double-digit percentages for some tech stocks.
step aside intel 45 nanometer chipset, cloaking materials, telepathic controllers, and internet technology....its time for an economic recession story from the National Bureau of Economic Research.
you nerds can thank us later after you're done spending your way to patriotastic victory over the stock plunge and housing crisis.
Good people go to bed earlier.
Sure they are more accurate but they are mixing up precise esoteric terms with the 'generally understood' terms.
People understand what the general term means in terms of their daily lives and for them "recession" is bad. What started in 2007 it wasn't "bad" for the ordinary Joe - in fact a recovery might have occurred and we'd never have known about it. Now that it's the 2 quarters of negative growth thing, it's a real recession.
Genesis 1:32 And God typed
As long as there is a Republican president in the white house, the press will do everything in their power to convince the populace that we are all doomed.
As soon as Obama takes office, prepare for the heralds to sing: The recession is over! We are winning in Iraq! Global warming has reversed!
As far as the "recession" goes, if history is any indicator we only have a few months of it left anyway. All we need now is a few executives being charged with various crimes to appease the masses and life will go on.
Women are like electronics: you don't know how damaged they are until you try to turn them on.
It's sort of like a junkie being asked diagnostic questions like "Where does it hurt?" by a doctor who is prescribing him opiates.
Seastead this.
Since the only growing industries seem to have been weapons and war, it's only natural that when you take the influence of government debt out of the picture, the economy has been shrinking for a long time.
There are some people who think you can replace economic growth in the private sector with economic growth in the public sector and it's the same thing. That may be true in Soviet Russia, but in the free world, pork financed with debt is an inflationary measure that doesn't increase the actual size of the economy.
What's worse, this 3.4% growth in the economy financed by debt is going to cause a cascade plunge. Right now we're like a family using debt to pay off debt (the growth in the national debt is equal to the money spent maintaining the current debt). What always happens in cases like these is the debt supply runs out, and the family goes bankrupt. If you think we're seeing hard times today, just wait. Paying back this 10 trillion is going to send the US back to the stone age by comparison.
It's been a long time.
Recessions are a normal part of the capitalist business cycle. Recessions wash out excesses in the system by shaking out inefficient companies, thus clearing the way for new competitors, and they work to keep supply and demand in sync over the long term.
[...] recessions are considered a normal part of a capitalist economy [...]
Etc.
As for your assumptions about Bush:
1. I didn't vote for Bush.
2. I voted for Obama.
So it's kind of funny you just called me "one of the last hard core republicans" when I'm anything but. What I don't like is hypocrisy and the one-sidedness of always only blaming one political party or one President -- whether it's Clinton and the Democrats or Bush and the Republicans -- for whatever ill is at hand. For the current economic situation, we had unprecedented political opportunism: it was politically expedient and beneficial for some liberals to push the notion that we're in really bad shape, even rolling out the Great Depression talk, and that Bush (and all the other things you hate about Bush, like the war!) is to blame for it.
There are so many contributing factors that it would be ridiculous to assert that economic decisions made in the current administration in the last 8 years have nothing to do with it. But at the same time, it's equally ridiculous to put blinders on to the incredible irresponsibility and shortsightedness of the decisions with regard to sub-prime lending in the name of getting people into homes. We never fully paid the piper for the internet bubble collapsing, and a lot of that, on a large scale, was parlayed into a booming housing market (and artificially created, so some extent, because of changes encouraged in lending practices).
Of course, you can't say that the financial industry is much the same, that all these speculators add nothing, are fluff. But that is what happened, we had the financial industry fluffing itself up by selling itself its own products over and over again. This whole mortage reselling would be similar to Ford and Chrysler (apologies if they are the same) buying each others cars over and over and counting that as total production. The financial industry obtained a far larger share of the total market then it really is supposed to have. It worked because everyone believed it, believed that Wall Street really is important. It isn't.
Then it collapsed, people did indeed loose fate. Somewhere someone burst the bubble. What we got now is not so much a reccesion, as a re-appreasal. We now got to decide what exactly the role of the financial industry is supposed to be. Is it a service industry to the rest of the industry (exactly like say a cleaning company is a service industry) or is everyone else in the service of the financial industry.
It is a mistake to assume that the current financial clusterfuck is because of bad mortgages or a bubble burst (we didn't have any serious issues with the Dot Com bubble). The bad mortgages are nothing but the trigger to two serious underlying problems:
(1) Most people in western countries live beyond their means.
(2) But most importantly: Credit Default Swaps.
The current financial situation is due mostly to [banks/investment firms/everyone and their dogs] betting on the failure of different entities. This is all due because of Credit Default Swaps are totally unregulated and they are a speculator's wet dream. The current house of CDS cards of about 50+ trillion $ (yes, trillion) is crumbling. First wave was MBIA and other bond insurers being downgraded by rating firms. This immediately triggered a metric fuckton of CDS collateral calls. Bear Stearns and Merill go under (well, saved last minute). Freddie and Fannie get bailed out, this immediately calls for another round of collateral calls. This second wave caused the collapse of Lehman, the nationalization of AIG and the massive cash infusion into Citi. If either big auto makers goes down, prepare for the worse. Oh and Goldman Sachs has started to write down bad assets too, no bank is safe.
This all thanks to speculators betting on companies with their unregulated toys: the Credit Default Swaps. It has nothing to do with believing or not in a system or losing faith in Wall Street. It's all about making a bunch of really bad bets without having cash on hand to cover the losses. And now that the bets are lost, it's time to pay. But t here is no money ...
As many "experts" have explained, right about the time we finally admit to the recession it usually is the start of the recovery.
"The greatest obstacle to discovery is not ignorance - it is the illusion of knowledge." - Daniel Boorstin
Christmas, like Halloween, father/mother/grandma/grandpa days, are commercial inventions, fake joy and fake happiness destined to make you shell out your hard-earned money
Well, I agree with you that all those holidays have been made commercial (the recent death due to Black Friday shows only how much), there *is* actually a true meaning behind Christmas. Whether you celebrate it (or even believe in it) is up to you. But, some people (myself included) appreciate the holiday for that reason and try not to let the commercialism of the season get them down.
Even if GP wasn't referring to it, some of us like to celebrate the secular meaning of Christmas: peace on Earth and goodwill toward men. While I think we should practice these ideals EVERY day, it's nice to have a holiday that celebrates and reminds people of these things explicitly.
You don't have to get behind that; nobody's forcing you. But you shouldn't try to disparage those of us that DO find happiness through it. It's just not the Christmas spirit =)
That it is, a "rule of thumb", the offical definition of a recession is when the National Bureau of Economic Research (NBER) business cycle dating committee agrees that there is (was) a recession, and they have now agreed to that. This is the definition which also showed that the Bush1.0 Gulf War 1.0 recession ended more than a year before newly elected Bill Clinton was elected and took credit for the recovery. And the "y2k" recession began before Bush2.0 was elected to take the blame. (That being said, his and the fed's management of that recession and the 9/11 "recession" has certainly created more long-term damage to the economy than either Clinton or the two Bush's could ever do on their own.) NBER's claim that we've been in a recession is akin to your doctor pointing out that you have a hangnail after you've been beheaded. For a look at some real scary statistics, at the St. Louis Fed's Net Free or Borrowed Reserves of Depository Institutions numbers going back to 1950 or Excess Reserve of Depository Institutions going back to 1925. or The Adjusted Monetary Base going back to 1910. Or any of several other monetary statistics that are several black swan SD's away from their multigenerational mean.
Bush's Treasury chairman Paulson and Bernanke have engineered a truly astounding experiment in monetary policy topped only by Robert Mugabe's 10^21% hyperinflationary monetary policies. The economy has enough inertia that we will see 1-5 years of deflation or disinflation as the "imagined" debt money supply virtually disappears, leaving too many goods chasing too few dollars. But the medium/long term effect is inflation, because only currency printing presses and inflation can reduce a debt brought on by a mad government and personal debt fueled spending spree that powered the economy for at least a decade.
When it's so easy to game the numbers, why not redefine the numbers?
It's like looking at the people with $500k sub-prime mortgages and concluding they must be rich.
They're not rich at all. The sort of house you live in was once a good indicator of wealth, but then the metrics changed and you could get a massive mortgage by lying about your income, and suddenly the indicator become meaningless.
Similarly, the US government in the past 8 years has spent at a greater (inflation adjusted) rate than any time since WWII. That's a significant portion of the economy dominated by the federal Government borrowing money. It may not be the intended effect, but this has the effect of "gaming" the system in that increases in federal spending and borrowing offset a private-sector recession. Since this isn't Soviet Russia, the public sector can't simply offset the private sector like that.
It's been a long time.
I agree with your math, but it is the $700 billion figure is not accurate. Try $8.3 trillion thus far. That would move your figure to around $30,000 a head.
I also lived within my means. I was going to buy a house 2-3 years ago, but didn't because I saw the writing on the wall. I figured when the collapse came, I could buy a house at probably less than half of current prices. I saved and lived frugally and hoped to be rewarded for that foresight. But that hasn't happened.
Instead, I now have over $2000 of new national debt in my name, housing prices have been propped up artificially, and that much more of my taxes are going into the toilet for others irresponsibility instead of doing real work for roads, schools, new companies, etc. And with a moratorium on foreclosures, it makes me wish I had gone out an lived stupidly.
And now we're about to do it again for automakers who haven't been competitive in years. Bloated with poor products, union handcuffs, and an apathy worthy of the name 'fat lazy American', we're about to enter a world of US automakers that are just as wonderful as our airline industry that goes bankrupt every 5-10 years and a lovely cycle of restructuring and dollar stocks. GM is now worth less than Nestle.
Everyone likes to talk about Obama's plans just like the 'new deal' but it's not the same. When you lose 10 years of investing in 6 months - the 'long term' is starting to showing its true colors. We're using new debt to pay off old debt and this can't go on. We're in uncharted waters. What's the answer? I don't know - I think we've done the best we can. We'd have had a real 1929 this year if the govt hadn't stepped in. But it's not sustainable. I personally am thinking long and hard how to get my long-term investments out of the US. As it is, we'll likely find ourselves in the same 'lost decade' Japan did when it's housing bubble burst. 10 years of no real growth while we pay off debt (yes, we're being much more proactive, but it's very likely the pattern we'll follow). Meanwhile everyone else walks out your investment doors and when you are open for business again - it's all moved on. I'm thinking China is looking better now - which has a national *savings* rate of over 50% as a better bet with people that know how to make money and keep it with real products.
A final note for those of you that like pointing fingers - point them all at ourselves on this one equally. Yes, the loan companies were out of control - but you know what - so were all of us. This wasn't Enron sitting on a hill - this was each of us living beyond our means.
Tell average Joe that he's losing *his* job because *you* run up so much debt and had to be bailed out. Because that's the hard truth.