June 06, 2008
FABIUS MAXIMUS IS CRITICAL, in a thoughtful enough way, of the "Dude, where's my recession?" line.
But I've already addressed the point two months ago. Are we in a recession? Possibly -- it's unknowable until the data come in. But that's always true, since calling a recession is a retrospective act, and the media coverage -- which is what I'm critiquing, remember -- is all couched in terms that suggest that the data clearly indicate that we're in a recession right now, or something more like the Great Depression, when that's not what the data we have indicate so far. Meanwhile, contrary to his assertion, my posts aren't just anecdotal, but point to data. As I've noted before, I can't call the economy better than experts -- who themselves can't call the economy very well -- but I can spot a media bulldozing operation when I see one, and I see one now.
That said, this is good advice: "Build savings. Be careful when starting new projects or switching jobs. Carefully watch the risk in their households’ balance sheets." But, then, it's always good advice, to be followed in good times and bad, regardless of what's on the news. If you rely on media reports to set your household financial strategy, you'll have the financial equivalent of bipolar disorder.
On the other hand -- and here's the really valuable part of his cautioning -- as I've noted before, the mere fact that the media are pushing a problem with bogus claims doesn't mean that there's not a real problem somewhere. It's easy to forget that, amid the fun of bursting their bubbles.
UPDATE: Well here's an unemployment jump in the latest figures. To 5.5%. If it establishes a trend that would be bad. Scroll past the copious gloomy adjectives and you get this, though: "The 5.5 percent rate is relatively moderate judged by historical standards. Yet, there was no question that employers last month sharply cut jobs in manufacturing, construction, retailing and professional and businesses services. Those losses swamped gains elsewhere, including in the education and health fields, government, and leisure and hospitality." What does it mean? I don't know. Neither do they -- but they'll tell you they do.
ANOTHER UPDATE: Reader Chris Baldwin emails: "While the tag line is somewhat recent, it is disingenuous to claim that this is all about Q1 and Q2 data. We've been told that we're already *in* a recession for going on a full year now, when it is clearly nonsense. He's right when he says that we might be in a recession in Q2, but we weren't 10 months ago when all this doom mongering really kicked into high gear."