Democrats Halted Recovery, Derailed Economy Last Summer
DS:
The burden of proof is on NBER to show why there was, for the first time EVER, a recession with two quarters of positive growth. They haven’t met the burden. They may eventually, but they haven’t yet.
There is NO doubt that the economy tanked in June/July, and that it has continued to do so since then at an accelerating rate. The two quarters of negative and worsening economic growth (3Q08 and 4Q08), i.e., a recession as normal people define it, demonstrate that. I think my explanations as to the causes of the second-half crumble are far more sensible than anyone else’s alternative explanations. Not to mention that I called it when it started, and cited why it had started.
As to your claim that 2.8% “isn’t that much growth,” surely you jest —
- in 62 years, my rough count is that 107, or about 43% of all quarters out of 248, have had growth of less than 2.8%. That’s not too far from the middle. I’m all for high standards, but we’re talking about whether a quarter that was better than 43% of those previously and since is recessionary. The very idea is almost laughable.
- Average reported quarterly growth in the 30 years that ended in 2007 was 3.04%. 2Q08 came in lower than that by a “whopping” 0.24%.
- If continued, 2.8% growth would lead to the real value of an economy’s output doubling in just over 25 years.
At any rate, the issue isn’t whether it “isn’t that much growth,” it’s whether you can legitimately talk about the occurrence of a recession when there’s that much growth. If you want to, you better have a heck of a case. NBER hasn’t made it yet, and I’ve cited three instances relayed by them that contradict such a case.
As to your claim that the Bush years were predominantly “paper growth,” on what basis? There is a case that the last year or two of the Clinton economy was “paper growth,” given how much money was dumped into worthless dot-coms that weren’t real businesses and had no idea of how they would ever sell anything of value (and most didn’t. I don’t see a basis for building a similar case for 2003-2007. The housing runup was nowhere near as overheated as the 75%-plus declining dot-com bubble.
And no, employment is NOT a more rational measure of an economy’s health. If that were the case, Cuba, where Fidel has virtually everyone of working age “employed” doing something, would be the greatest economy in the world. The total value of goods and services produced in an economy, and whether that total value is rising or falling, is much more rational.
