Six months ago, I wrote a post titled “Delayed reality” in which I talked about the difference in a “down economy” and the technical definition of a recession.
In that post, I wrote that if one is out of work, it’s quite easy to believe we are in a recession, but that we had likely been out of a recession for as long as a year. We were, and still are, in a down economy that could take a few more years to completely dig out from. But as I noted, a recession ends at the bottom of an economic cycle — “recovery” is the label for what takes place after the bottom is hit.
In that post, I predicted that when the National Bureau of Economic Research got around to making the official pronouncement about when the economy bottomed out, the date would likely be April, 2009 and that the recession, which started in December, 2007, would have endured for 16 months, matching the duration of two previous recessions since 1973.
As noted later in an addendum to that post, a week later the NBER announced they were deferring their decision about the date of the recession’s end — a move for which I labeled them “wimps.” Geez, if there’s a group deserving more jokes than politicians and lawyers, it’s got to be economists.
Well, today, six months later, the star chamber at the NBER finally decided something close to what I predicted, however they put the end-point of the recession two months later, in June of 2009. Those two months allow us all to declare that, yes, this recession was “the longest since the Great Depression.”
Strangest reporting that occurred today: the linking of today’s stock market performance to the end-of-the-recession announcement. We’re always told that the performance of the stock market is a indication of future economic activity. If that’s the case, what’s that got to do with a declaration of something that ended 15 months ago.
Other predictably wimpish CYA action by the NBER: Hedging their announcement by explaining if the economy heads down now, it’s not the same recession, but another one — proving once more that even a committee of economists must resort to “two-handed declarations.”
I don’t know why economists are so fearful of actually making declarations. It’s not like anyone will remember what they said. Political pundit talking heads make predictions everyday that are proven incorrect. Yet still they are asked back onto TV shows to provide their next round of incorrect predictions.
By the way, I have met with the RexBlog committee and we have decided that this is the last post about the 2008-09 Recession. Any future posts about recessions will be about the next one.