It’s time to declare the ‘recession narrative’ over: the ‘recovery narrative’ has begun

Five months ago, I wrote that the “recession may not be over but the recession narrative seemed to be recovering.” Based on the non-science with which I made that correct call, I’m now ready to call a new shift in the narrative — from “recession narrative” to “recovery narrative.”

As I said then, my call had nothing to do with the actual economy, just the coverage of the economy — the popular, traditional media, middle of the road analyst’s narrative of where we are in the economic cycle. That blog post — and this one — comes from scanning hundreds of business-related headlines each day. It is very unscientific, but I believe an educated and informed “guess” of how bloggers, reporters and professional forecasters think the wind is blowing.

Let me be explicit about this: I don’t believe most bloggers, reporters and professional forecasters actually have any idea what the future holds.** I’m merely saying what I believe is the boiled-down, blended goo of what they’re saying now.

Here’s what I believe the current narrative outline is — something akin to what an imaginary talking-points service seems to be giving out to people who are asked to interpret the future of the American economy.:

1. The recession is over. The economy is stablizing. Alternative terms: Hit bottom. Turning.
2. The recovery is going to be long, sluggish and not robust. Alternative terms: Not really a recovery.
3. There are still many problems out there that could affect the recovery in the near term. (This is their standard CYA boilerplate.)
4. Longterm, there are major problems that must be addressed. (Need some? Slate’s interactive “Choose Your Own Apocalypse” is a handy tool.)

*Technically speaking, a recession is “over” when the National Bureau of Economic Research says it’s over — and they won’t call “the end” until about a year after it occurs. Until they issue their proclamation, the quarter in which the GDP stops contracting will be interpreted by most economists and media as “the end.” Thus, today you’ll be seeing reports that the recession in France and Germany has “ended” because their GDP has stopped contracting.

**I’ll be writing a follow-up post later suggesting how (and why) those who forecast the future should start being more bold, or if not more bold, more entertaining, in predicting the future.