Dan

Calabrese

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May 1, 2008

What Happened to the Recession? Surprise! Bush Expansion Continues

I once heard Rush Limbaugh say the way he deals with a recession is to “not participate in it.” Today we found out that in our current so-called recession, the economy itself is not participating.

You’ve heard, of course, about the “recession.” The Associated Press has been referring to it as an established fact for much of the year. Every day, we see interviews with economists who grimly warn that we are surely already in a recession. The only debate is how bad it will get.

Oops. Some facts just arrived, and they’re not what the media, the economists and the Democrats had long since made up their minds was the truth.

We’re not in a recession. Not. The economy is still growing. It’s not growing at a break-neck pace, but it is growing, and that means there is more per-capita wealth in this country now than there was three months ago. A recession is happening when you have two consecutive quarters of negative economic growth. At present, we’ve had about 25 consecutive quarters of positive economic growth. So, recession? Sorry, we’re not in one.

The economy grew (yes, emphasis on grew) at a rate of 0.6 percent in the first quarter of 2008. Or, as the Associated Press would put it, the economy “limped along.” Everyone’s a critic.

Most people don’t understand what economic growth really represents (especially if they get their economic news from the Associated Press), so let’s briefly review: Economic growth means the nation, as measured by gross domestic product (GDP), generated more value in the form of goods and services than it did during the last period measured.

Most news reports about the economy lead you to believe that if growth is slow, the economy is getting worse. It’s not. If there is any growth, the nation’s output is improving. When growth is negative, that’s when it’s getting worse. That hasn’t happened since early in President Bush’s first term, and it hasn’t happened at all since Bush’s 2001 and 2003 tax cuts went into effect, which is why John McCain, who voted against them, now admits “they worked” and proposes to make them permanent.

But the major media has been so bought into the idea that we were falling into a recession, they saw no reason to actually wait for the numbers. It’s become an accepted tenet of conventional wisdom that the recession was underway. Most of the reporting on the subject has operated under the presumption that the first and second quarters of 2008 would make it official.

Now that we know the storyline was wrong, it’s not hard to figure out why they got it wrong. It happened primarily for two reasons.

First, many in the mainstream media were engaged in hopeful reporting. They don’t like President Bush, and they are eager to discredit his economic policies. Since 85 percent of professional journalists vote Democratic according to most surveys, they see it as their job to speak truth to power, man, so warning people of the coming recession was their job. They thought.

The second reason is less sinister but just as irresponsible. Too much of reporting these days consists of making predictions instead of reporting facts. If a bunch of economists think we’re going to have a recession, that doesn’t mean news has happened. It just means a bunch of people expect something, even though they have no idea if it’s going to happen or not.

Before we had economic growth numbers available, we read about the rather bizarre statistic known as “consumer confidence,” which we were told was down. Gee. Wonder why! Every time the stock market is down, we hear about “jitters” fueling the decline.

Yet all the gloomy predictions, repeated over and over again, still haven’t been enough to produce a recession.

Now, you may protest, a recession could still happen! Sure it could. And if it does, it should be reported as news. We could also get a new pope some day who takes the name Larry, but in the meantime we don’t need to see news stories speculating that it could happen, let alone that it’s a foregone conclusion.

Wait. See. Report the facts. Otherwise you’ll end up like the Associated Press, having to go back and write corrections to all the news stories you’ve written reporting the recession is already under way.

Nope. The Bush expansion continues.

© 2008 North Star Writers Group. May not be republished without permission.

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