Capital Markets

No Depression?

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It's becoming increasingly clear that the battle of ideas over all things related to our newly certified recession and $8.5 trillion (so far) bailout is boiling down to a fascinating revisionist face-off over the Great Depression: its causes, its effects, its solutions. Are we indeed in, or headed toward, the worst economic crisis since the Great Depression, and if so what lessons apply? A Greek-tragedy twist on all this is that Fed Chair Ben Bernanke is an economic historian who specialized in…the Great Depression! As such, his thoughts on the analogy are both fascinating and crucial. Here's what he said yesterday:

"Well, you hear a lot of loose talk, but let me just … say, as a scholar of the Great Depression—and I've written books about the Depression and been very interested in this since I was in graduate school, there's no comparison," Bernanke said in a question period after an address in Austin, Texas.

Bernanke cited "an order-of-magnitude difference" in the current situation compared to the 1930s.

"During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war," he said.

"During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent." […]

Still, the Fed chief said lessons learned from the Depression may still apply today, including the "excessively tight monetary policy" that led to higher interest rates and deflation of about 10 percent a year over the first three years of the 1930s.

"We have learned from that experience that monetary policy has got to be proactive and supportive of the economy in a situation of difficult financial conditions," he said.

"The other part was—the other error, the big mistake that policymakers made in the early '30s was they essentially allowed the financial system to collapse and they didn't do anything about it. The Federal Reserve did no action as the banks failed by the hundreds and the thousands."

More here, including a section about President Bush that seems to contradict Bernanke's this-ain't-the-'30s view:

President George W. Bush said in an interview released Monday that Bernanke and Treasury Secretary Henry Paulson warned him weeks ago that bold action was needed to avert a new Great Depression.

"I can remember sitting in the Roosevelt Room with Hank Paulson and Ben Bernanke and others, and they said to me that if we don't act boldly, Mr. President, we could be in a depression greater than the Great Depression," Bush told ABC News.

What has reason been writing on the Great Depression for the past 40 years?

* In January 2004, Julian Sanchez conducted a brief interview with Jim Powell, author of FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression.

* Four years later, Nick Gillespie interviewed The Forgotten Man author Amity Shlaes.

* In October 2004, Damon Root looked at "How FDR made life worse for African Americans."

* In June of this year, we polled seven market-friendly economic observers, all of whom (unlike me!) pronounced that we were either in or entering recession.

* At the height of bailout panic, we sampled another batch of libertarian economists about what they thought.

* And in a wonderfully prescient November 2006 piece, Brian Doherty discussed among five economic analysts (including Milton Friedman and Ron Paul) whether we can bank on the Federal Reserve, and specifically what they thought of Ben Bernanke's analyses of the Great Depression.

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  1. More here, including a section about President Bush that seems to contradict Bernanke’s this-ain’t-the-’30s view:

    The most likely scenario here is that Bernanke used the word “depression” – as in “there could be a depression,” or “the worse economy since the Great Depression,” and Bush’s brain went “Golly, worse than the Great Depression!”

    If this does turn into a depression, it will probably look more like the ones we had in 1800s than the Big One.

  2. I’m going where there’s no depression
    To a better land that’s free from care
    I’ll leave this world of toil and trouble
    My home’s in heaven
    I’m going there

    The only thing to look forward to in the new depression: a sharp uptick in despondent music and novels. Put all your money in gloom, people.

  3. In June of this year, we polled seven market-friendly economic observers, all of whom (unlike me!) pronounced that we were either in or entering recession.

    Considering the NBER just proclaimed the start of the official recession, we would’ve been just entering it in June. Talk about being spot on with the forecasting there!

  4. All we need is for the federal government to force everyone to take a prozac, then the depression will go away.

  5. madmikefisk,

    The NBER reported that the recession began in December 07.

  6. Recession started July1. NBER is wrong.

    Why do people keep using the word “official” when talking about NBER declaring a recession? They have no god-given rate to be the official arbiter of these things.

  7. I’m happily awaiting depression 2.0, Hallelujah!

    Oh, why don’t you work
    Like other men do?
    How the hell can I work
    When the skies are so blue?
    Chorus:
    Hallelujah! I’m a bum,
    Hallelujah bum again,
    Hallelujah! give us a handout
    To revive us again.

    Oh, I love my boss
    And my boss loves me,
    And that is the reason
    I’m so hungry.

    Well, springtime has come
    And I’m just out of jail,
    Without any money,
    Without any bail.

    Oh why don’t you save all
    The money you earn?
    Well if I didn’t eat,
    I’d have money to burn.

    Oh, I like my boss,
    He’s a good friend of mine,
    And that’s why I’m standing
    Out in the breadline.

    I can’t buy a job
    ’cause I ain’t got the dough
    So I ride in a boxcar
    ’cause I’m a hobo.

    I went to a house and
    I knocked on the door,
    The lady said, “Scram, bum,
    You’ve been here before!”

    I went to a house, and
    I asked for some bread;
    A lady came out, says,
    “The baker is dead.”

    I went to a bar and
    I asked for a drink,
    They gave me a glass
    And they showed me the sink.

    Oh why don’t you work
    Like other folks do?
    How can I get a job
    When you’re holding down two?

    Whenever I get all
    The money I earn,
    The boss will be broke
    And to work he must turn.

    When springtime does come,
    Oh won’t we have fun,
    We’ll throw up our jobs
    And we’ll go on the bum.

  8. The only thing to look forward to in the new depression: a sharp uptick in despondent music and novels. Put all your money in gloom, people.

    SHUT UP EMO ECONOMY!

  9. When are you libertards going to wake up and recognized that the government needs to take the reins and guide this wagon out of the swamp and back to safety.

  10. “No Depression?”

    I’m kinda depressed.

  11. Depression? Jesus, we hype to death even economic downturns now.

    I’m curious why the government seems so interested in fanning the flames of panic. Obviously, they want to have carte blanche to do these various bailouts, but one would think that even if the economy were a total disaster–which I don’t think is remotely the case–that the government would want to avoid panicking consumers. But they are going out of their way to do just that. Why?

  12. robc | December 2, 2008, 9:59am | #

    Recession started July1. NBER is wrong.

    Why do people keep using the word “official” when talking about NBER declaring a recession? They have no god-given rate to be the official arbiter of these things.

    And you do?

  13. Weird, c.o., i never figured you for a Bush fan.

  14. “Are you depressed? Has our interest rates got you down? My name is Meatwad, and today I’m here to offer you a once-in-a-lifetime opportunity. Sell your organs! LIVE! Over the internet! Get money back on your baby! That didn’t sound right. Where’s my sheet?”

  15. I’ve personally been in a recession since my WaMu stock died a lonely and pathetic death.

  16. c.o.’s metaphor makes my brain hurt.

  17. The NBER reported that the recession began in December 07.

    This is what I get from reading headlines, not press releases. Thanks for the correction. Either way, the “heading into a recession” moniker remains accurate.

  18. Try drinking a little less in the evenings joe.

  19. SHUT UP EMO ECONOMY!

    At least it cuts its own interest rates.

  20. Well Pro Liberate – although nothing makes much sense anymore in trhe communist nation we have been living in, the reason is that they need the big money grab to prop up their personal fortunes in the market. So the bigger the screaming about depression, the more money they can steal for their own stock propping.
    Now the other trick involved is making the moola mandating all a big fat secret – so as not to “shock the markets ” when the public “see which players” lined up for the big payola.
    That also of course protects the shady blatantly criminal implementation and waste, no doubt. Plus, all the pig trough pols can claim they enver knew they voted for 100 billion for the retirement stock….
    So you see – there is a method to their madness, on multiple fronts.

  21. ” depression that lasted for about 12 years and was only ended by a world war,”

    Crap. Bernanke believes the “world war two ended the depression” canard. What a god damned ignoramus.

    -jcr

  22. http://faq.bea.gov/cgi-bin/bea.cfg/php/enduser/std_adp.php?p_faqid=485&p_created=1206966790

    Question

    Recession: How is that defined?

    Answer

    In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy. The NBER recession is a monthly concept that takes account of a number of monthly indicators-such as employment, personal income, and industrial production-as well as quarterly GDP growth. Therefore, while negative GDP growth and recessions closely track each other, the consideration by the NBER of the monthly indicators, especially employment, means that the identification of a recession with two consecutive quarters of negative GDP growth does not always hold. For information on recession, or business-cycle, dating, see: http://www.nber.org/cycles/jan08bcdc_memo.html.

  23. Thanks joe! Hallelujah!

  24. I’ll just say to joe:

    You’re welcome.

  25. Personally, while the OMG, BLS, BEA and NBER are fine analysts of economic conditions, I’ve found that the SIV has a good track record in pinpointing the start of recessions.

    To the best of my knowledge, they’re 1 for 1.

  26. Didn’t some guy who co-starred in a movie with a monkey once say that a recession is when your neighbor loses his job and that a depression is when you lose your job whereas a recovery is when Jimmy Carter loses his?

  27. SiliconDoc,

    It’s a mad, mad, mad, mad world.

    libertymike,

    You mean Charlton Heston? “You maniacs!”

    joe,

    One thing about recessions that I’ve observed in my lifetime–they (they who measure such things) are always changing their minds about when, exactly, a given recession begins and ends. In other words, everyone is right!

  28. We need another massive high-profile make-work jobs program at the federal level, preferably one which will drive actual business enterprises into bankruptcy. We need to institute a massive tax on cellphones and computers, to pay for an expansion of AMTRAK. And we can require a TSA agent on every car, to rummage through the passengers’ personal effects. Because they might have bombs, or something.

  29. ProLib,

    NBER doesn’t change their mind. they just wait till they are sure and backdate it to the start.They will do the same thing if and when it ends.

  30. I look forward to forthcoming Reason articles on FDR, including

    The Time FDR Burned Down An Orphanage And Laughed

    The Time FDR Ran Over A Basket Of Kittens And Laughed

    The Time FDR Got Drunk And Raped A 12-Year-Old Black Girl (And Laughed)

  31. If we’re going to start doing stupid New Dealish stuff, can we at least create a useful jobs program? Like building a space elevator?

  32. SIV,

    So they’d like you to believe.

  33. AV,

    The Time FDR signed the law making posession and sale of marijuana a Federal offense.

    The Time FDR signed a law making posession of firearms with arbitrary mechanical features a Federal offense.

    The Time FDR signed a law making growing agricultural commodities, such as wheat for your own personal consumption, a Federal offense.

    I could go on ………

    That SOB FDR infringed the hell out of our property rights.It would have been better for our liberty if he just raped a burning orphanage full of kittens and 12 y/o girls.

  34. Alan, I can assure you that Franklin was quiet serious while raping, but did take a certain joie de vivre in his other hobbies.

  35. The republicrats and evangelicrats must be beside themselves. They were lied into a war, and up to 3 months ago McCain/Palin were telling our country the economy was good, and the “fundamentals strong.” Now, yesterday, we discover their lies again and that the counntry has been in a recession which started over a year ago. The majority of citizens of the most wonderful country on the planet saw thru their lies. Our country deserves a better opposition that the “rats” I have just described. Liars, cheats, hypocrites…..

  36. “Real holographic simulated Evil Lincoln FDR is back!”

  37. If you were to ask me who’s version of a story to believe, GWB’s or helicopter Ben, unless it was baseball related, I’d side with the chopper.

  38. The time that Vanneman blew FDR’s plegical penis.

    Or the time Vanneman and Joe blew each other while FDR watched

    Or the time Vanneman sat in in FDR’s lap as he pushed them through the Rose Garden and sung sweet lullabies,

    Am I accusing any one of Homosexual admiration? I’m Alger Hiss, that is what I do!

  39. We are so fucked

    doom
    DoooM
    DOOOOM

  40. I’m Alger Hiss, that is what I do!

    I see you’re still in the habit of feigning superiority despite seeing your political and economic theories lying in tatters, too.

    You’re Alger Hiss, that’s what you do!

  41. joe,

    And you do?

    Nope. My claim in no more or less official than theirs. The only difference is Im applying a strict, measurable, repeatable standard. They are looking at a bunch of things and deciding if it seems like that is recessiony enough. I think the statistics they look at show what caused the recession to occur 6 months later, it was a definate forewarning of the impending recession, but it wasnt itself a recession.

    But I like strict black and white terminology.

  42. joe | December 2, 2008, 11:13am | #
    I’m Alger Hiss, that is what I do!

    I see you’re still in the habit of feigning superiority despite seeing your political and economic theories lying in tatters, too.

    You’re Alger Hiss, that’s what you do!

    One day there will be a new Stalin who will have you trembling in fear!
    How can you deny the prescience of Lenin this late in the stage of Capitalism?

  43. pro Libertate:

    I’ve never understood why the Left doesn’t like the space program. It’s pretty much a perfect embodiment in their belief that government should run a bunch of companies as inefficiently as possible, so as to employ as many people as possible in manufacturing jobs.

    The only thing missing is that we don’t have a United Space Workers.
    If we did, they’d be bailing out NASA and subsidizing trips to the moon.

  44. If the Federal Reserve did nothing in response to the financial crisis, there could have been another Great Depression. If FDIC failed to meet its obligations, or even if closed too many banks, there could have been a Great Depression. It could be that FDIC will require a “bailout.”

    I don’t think that anything like what Bernanke and Paulson came up with was necessary to avoid another Great Depression.

  45. But I like strict black and white terminology.

    But strict, black and white terminology to describe something as complex as an economy is idiotic. There are different kinds of recessions. A period of time where GDP growth is 0.1% for 2 years and unemployment rises from 5% to 7% does not fit the “2 straight quarters of declining GDP” definition, but will look and feel like a recession. Just because the NBER and other economists can grasp defining something as a confluence of multiple factors, but you can’t (or don’t want to) doesn’t mean that they should dumb down the definition for you.

  46. Calling someone “socialist/communist” is Godwin’s law for conservatives.

  47. robc,

    Nope. My claim in no more or less official than theirs.

    As a matter of fact, your claim is quite a bit less official. Less official, that is, than the body tasked with providing the official measurement of when recessions begin and end.

    I’m supposed to take their analysis LESS seriously because they use more data and look at it closer?

    Look, one measure would call a year that saw 0.8% real GDP decline, which saw -0.4% Q1 annual growth, +0.1% Q2 growth, -0.4% Q3 growth, and +0.1% Q4 growth a recession. The other would not. I know which one I’m going to believe.

  48. People also forget, there’s a difference between the Great Depression and A depression.

    A depression is:

    In economics, a depression is a sustained, long downturn in one or more economies. It is more severe than a recession, which is seen as a normal downturn in the business cycle. Considered a rare but extreme form of recession, a depression is characterized by abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations. Price deflation or hyperinflation are also common elements of a depression.

    A common rule of thumb for a depression is a 10 percent decline in gross domestic product (GDP). The corresponding rule of thumb for recession is two quarters of negative GDP growth. Using these definitions, the threshold for depression is vastly more severe than that for recession. A GDP decline of more than 10 percent has not occurred in the United States since the 1930s.

    A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s.

  49. Bill Woolsey | December 2, 2008, 11:20am | #
    If the Federal Reserve did nothing in response to the financial crisis, there could have been another Great Depression. If FDIC failed to meet its obligations, or even if closed too many banks, there could have been a Great Depression. It could be that FDIC will require a “bailout.”

    I don’t think that anything like what Bernanke and Paulson came up with was necessary to avoid another Great Depression.

    You Social Democrats believe you are ‘saving Capitalism from the Capitalist’, but really you are just fanning the flames of its destruction when the workers revolt when they get hit with the bill. For that you have my thanks.

  50. If we did, they’d be bailing out NASA and subsidizing trips to the moon.

    Ralph Kramden already has the latter covered.

  51. Mo,

    Im quite capable of understanding something as a confluence of mutliple factors, but it they want to “define something as a confluence of mulitple factors” then publish the definition so a committee is no longer necessary, anyone with all the data can plug it into the formula and determine it.

    They dont do that. They look at all the factors, discuss it as a committee and decide if it is recessiony enough to call. Which is all well and good, they are wiser economically than me.

    A period of time where GDP growth is 0.1% for 2 years and unemployment rises from 5% to 7% does not fit the “2 straight quarters of declining GDP” definition, but will look and feel like a recession.

    No, it probably doesnt. The word recession implies something receding. 0.1% growth is growth, it isnt receding. Yeah, employment is receding, but that just means the 93% are being hella productive.

  52. I’d much rather subsidize moon and Mars missions than the H2.

  53. than the body tasked with providing the official measurement of when recessions begin and end.

    Tasked by whom?

    Unless it is God, they are exactly the same level of official as me.

  54. In fact I’d much rather be forced to fund space exploration than be forced to fund 99% of the other things in the federal budget.

  55. “Money doesn’t just grow on trees! You have to get it…from the cloner.”

  56. If GDP only rises 0.1% in absolute terms, it is declining in real terms; that is, it is receding.

    Which is why you’d see unemployment rise 2 points.

  57. If the economy grows 0.1% is real terms, on the other hand, unemployment won’t rise, at least not to any meaningful degree.

  58. joe,

    If GDP only rises 0.1% in absolute terms, it is declining in real terms

    Not if we are also in a deflationary period. In that case, it is much better that 0.1% in real terms.

  59. Tasked by whom?

    Read the link.

    Unless it is God, they are exactly the same level of official as me.

    That’s not what the word “official” means.

  60. joe,

    If the economy grows 0.1% is real terms, on the other hand, unemployment won’t rise, at least not to any meaningful degree.

    It will if there is significant productivity growth. But you are generally right.

  61. Not if we are also in a deflationary period.

    Even then, there is population growth.

  62. That’s not what the word “official” means.

    Sure, it means a person charged with a duty. But, anyone can charge someone with a duty. NBER and I have both been charged with declaring a recession (I did it to myself just now while typing this). To be honest with you, I respect my own charge more than whoever charged NBER with the duty.

    Thus, I am even more official than NBER.

    If God had charged NBER with the duty, I would respect that and deny my officialness.

  63. Even then, there is population growth.

    That doesnt factor into real v absolute dollar value.

  64. You are not authorized to charge anyone with any duties, beyond your own family.

    The federal government is.

    You might as well tell me that you have official clearance to dig up the street, just like the DPW. Hey, man, I trust myself more than the government.

  65. Oooh, a space union. Yes, that would work almost as good as the Lunar Sex Prize.

    The new space workers’ union should be called, of course, The Federation.

  66. Assuming inflation of 0%, you could have a situation where the economy grows at 0.5% and still shrinks on a per person basis. If the economy grows at a lower rate than population growth (0.89%), unemployment will rise, productivity will go down and you could still have positive real economic growth. Per capita GDP, however, would go down though.

  67. joe,

    If this does turn into a depression, it will probably look more like the ones we had in 1800s than the Big One.

    Which one? The depression caused by Jefferson’s embargo was a Big One after all, in light of its length and depth.

    Pro Libertate,

    I’m curious why the government seems so interested in fanning the flames of panic.

    Public choice economics probably explains that at least to some degree.

    ______________________________________

    Milton Friedman makes the point that it was the discretion which the Fed had over monetary policy that was the root of the problem of the start of the GD. Less discretion in other words would have led to a better result.

  68. That doesnt factor into real v absolute dollar value.

    No, but it factors into real vs. nominal GDP per capita. If our economy grew 2% while out population doubled, there would be people starving the streets.

    But hey, the absolute dollar value increased, so it’s a growth period!

  69. Nobody knows
    the troubles I’ve seen…

  70. Seward,

    Which one?

    Let’s hope we don’t find out.

  71. Then again, we may want to skip Friedman’s recommendation and jump right into free banking.

  72. Honestly. Having the government determine or define what the state of the economy is borders on the absurd. Maybe instead of the Censor [insert gong sound, ? la Led Zeppelin’s “What Is and What Should Never Be”], I should be promoting the Anti-Government. A body outside of the federal government that operates in opposition to the government. “Recession in 2007? Ha! Lies!”

  73. joe,

    You are not authorized to charge anyone with any duties, beyond your own family.

    I didnt extend my charge beyond my own family. I appointed myself. 🙂

    The federal government is.

    No they arent. I doubt you can find a constitutional passage that authorizes this charge.

  74. You might as well tell me that you have official clearance to dig up the street, just like the DPW.

    What ramifications are there for robc to contend with the NBER’s assessment? None, and he could be right, for all you know (or depending on the standards set).

    Digging up the street has a direct impact on other people; quibbling with NBER does not.

  75. Pro Libertate,

    Well, I really don’t know how useful the snapshot approach is. We get very little feel for what the economy is doing over time. Indeed, the snapshot approach we seem to get is probably also inherently politicized.

  76. Pro Lib,

    The NBER is a private, non-profit group. So it’s not the government determining the start of the recession.

  77. Mo and joe,

    I assumed we were working with per capita numbers from the beginning.

    If we are working with raw GDP numbers, I concede the point on population growth.

    Lets just assume going foward we are talking about real per capita GDP.

  78. “Money doesn’t just grow on trees! You have to get it…from the cloner.”

    “Well, obviously, I am a drug lord in this scene. Where the hell else do you think a guy like me gets this amount of cash?”

  79. Are we indeed in, or headed toward, the worst economic crisis since the Great Depression, and if so what lessons apply?

    Very probably.

    joe | December 2, 2008, 9:42am | #

    If this does turn into a depression, it will probably look more like the ones we had in 1800s than the Big One.

    Like the Long Depression of 1873-96?

    I’m sure you’re thinking of the Panics of 1873 (which was over by 1879) or 1893-96. It does resemble those a lot. The first of these happened after the Credit Mobilier scandal and the failure of the major bank Jay Cooke and company. The second started off with the bankruptcy of Philadelphia and Reading Railroad and was pretty nasty. The period between the Panics wasn’t all that bad unless you were a farmer, but there was a severe shortage of currency which is why the Populists wanted Free Silver and got so many votes in 1892.

  80. TAO,

    You have just demonstrated the robc’s quibbling does not victimize anyone.

    You have not demonstrated that he is authorized to make official statements about recessions. That, btw, is what we were talking about – whether the NBER’s pronouncements are official.

  81. TAO,

    Thanks, you get the point. This seems to all be a “gotcha! I was right” thing for joe. When I tried to make a bet with him over start of recession back early in the year, I specifically defined recession as the textbook definition. He should have taken the bet, I think he ends up winning it (although I cant remember the cutoff, but I think 3rd and 4th quarter receding would have given him the win).

    I personally dont care how you define recession, whether we are technically in one or not changes nothing at all. Its just a label. A simple formula, a complicated formula, a committee, they all work, none are any more or less legitimate than others.

  82. That, btw, is what we were talking about – whether the NBER’s pronouncements are official.

    1. Why in the world does that matter?
    2. Isn’t this a mere logomachy at this point?

  83. joe,

    Stepping out of the specifics of your discussion, as a general rule, the source of a statement by itself is not determinitive of its accuracy. The government is often wrong after all. So the fact that a claim is “official” shouldn’t lend that much weight to it by itself.

  84. Syd,

    I hope not.

    As you note, both of those panics/depressions started with collapses in the financial sector, which caused cascading failures throughout the economy. Well, we’re seeing one of those right now. I certainly hope there isn’t another in a few years.

    robc,

    If you were talking about GDP per cap from the beginning, why would you write: Not if we are also in a deflationary period. In that case, it is much better that 0.1% in real terms?

  85. joe,

    Its just a fucking label. It matters none at all whether it is official or not. Different people define it differently.

    Why does there even need to be an “official” recession definition? It doesnt change the underlying economic conditions at all.

  86. Pro Libertate | December 2, 2008, 11:43am | #
    Honestly. Having the government determine or define what the state of the economy is borders on the absurd. Maybe instead of the Censor [insert gong sound, ? la Led Zeppelin’s “What Is and What Should Never Be”], I should be promoting the Anti-Government. A body outside of the federal government that operates in opposition to the government. “Recession in 2007? Ha! Lies!”

    Libertarians can’t even prevent establishmentarian Social Democrats from dominating your message boards, how do you propose to set up a counter authority? Have libertarians ever been at the helm of a country, large or small? Well, we have!

  87. Of course there’s going to be a depression. After 8 years of libertard wingnut policies it was bound to happen at some point. 20’s and 30’s all over again.

  88. TAO,

    1. Why in the world does that matter? I don’t know. robc insisted that they are not an official recession-calling body, and I pointed out that they are.

    2. Isn’t this a mere logomachy at this point? Umm…yes.

  89. Using only GDP as a measurement is still a blunt instrument. It’s like trying to use BMI as a measurement of health. Sure if you get relatively fatter, often times you’re less healthy. Sometimes it just means you’ve put on more muscle mass. Or you may have been too thin before.

    If real, per capita GDP goes up 2%, but nominal GDP is flat and you’re in a nasty deflationary environment that doesn’t indicate a healthy economy. If you get 15 economists in a room, you’re going to get 15 different opinions of what different sets of data mean, which is why you can’t go by simple black and white rules. We don’t live in a Manichean world rob, get over it.

  90. And robc seems to be spouting off about how he is more official than someone else unless God makes someone else more official. Great fun.

  91. joe,

    If you were talking about GDP per cap from the beginning, why would you write

    Deflationary doesnt depend on per cap. If the economy is growing at 0.1% absolute (per cap) and the inflation rate is -3%, then the real GDP (per cap) is much higher.

    Two separate issues – per cap and real v absolute.

  92. Mo,

    If the government designates a private actor as the official spokesman for an issue, then the independence of that organization is a matter for consideration.

    Incidentally, I don’t necessarily have a problem with the NBER or its conclusions.

  93. Look at me! Lookatme! Lookatme!

  94. Stop spoofing me wingnuts! If you fuck with bull you will get the horns!

  95. joe,

    Its just a fucking label. It matters none at all whether it is official or not. Different people define it differently.i>

    Then why have you spent all of this effort insisting that the NBER’s definition is wrong, and your right?

  96. God I hate my life!

  97. Mo,

    I never claimed that a non-recession equaled a healthy economy. I dont think we had a healthy economy during the boom days of the 90s, because of underlying issues that wouldnt rear their heads for another 10 years.

    I just think if we are going to use technical terms they should have technical definitions.

    Repeatability is a hallmark of science. Anyone with access to the same data that NBER has should be able to determine “recession or no” with exact same results as NBER. 100% of the time. There shouldnt be a need for a committee. Just plug and chug.

    Now, that may mean that sometimes it gives silly results and the formula needs to be modified and NBER may have a different formula than some other group of economists puts together, but at least both of them will have repeatability on their side.

  98. joe, will you be my friend?

  99. robc,

    Do you do your own judging at home of gymnastics and figure skating competitions and award imaginary gold medals to the “real winners” ?

  100. All this spoofing is childish and immature. And there is a precedent for suing for online harassment.

  101. Then why have you spent all of this effort insisting that the NBER’s definition is wrong, and your right?

    Because that proves the point. My claim of the label is just as legitimate as NBER’s. Actually, since mine is repeatable and theirs isnt, mine is better science.


  102. Repeatability is a hallmark of science.

    I thought we were discussing economics here?

  103. It hurts to get pwned! Stop it!

  104. I’m curious why the government seems so interested in fanning the flames of panic.

    The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
    -H L Mencken

  105. Pro Libertate | December 2, 2008, 11:56am | #
    Mo,

    If the government designates a private actor as the official spokesman for an issue, then the independence of that organization is a matter for consideration.

    Incidentally, I don’t necessarily have a problem with the NBER or its conclusions.

    It may be of value to you for historical accuracy but NBER numbers coming out now would have served you no real useful purpose in conducting your economic affairs in the Summer of ’08, or the previous Winter. You are quibbling over mere econometrics in a matter worthy of a USA Today editorial board meeting.

    (back in character)

    Death to capitalist pigs!

  106. robc,

    I’ll take that as a “Yes” to my 12:02 EST question.

  107. SIV,

    Do you do your own judging at home of gymnastics and figure skating competitions and award imaginary gold medals to the “real winners” ?

    Actually…no comment. However, Colorado’s “half” of the 1990 national championship in football is completely bogus and I dont acknowledge it.

    The olympic committee owns the olympics, they have the authority to create officials to award the medals. The US Government doesnt own the economy. No one does. It just exists.

  108. I just think if we are going to use technical terms they should have technical definitions. Wait a second, is it “just a fucking label,” or is it a technical term?

    “Recession” isn’t originally a technical term, but a common term. From the NBER, In general usage, the word recession connotes a marked slippage in economic activity. Different measures have been used to describe the relationship between GDP (and many other economic measures) and a recession. There is no official formula, though one common rule of thumb is 2 consecutive quarters of negative GDP growth. That’s a big, blunt measure, though, and bringing in additional data can help you make a better decision about whether there has been a marked slippage in economic activity.

  109. joe,

    There are many common terms that have technical meanings in specific fields: “work” in physics, for example.

  110. It may be of value to you for historical accuracy but NBER numbers coming out now would have served you no real useful purpose in conducting your economic affairs in the Summer of ’08, or the previous Winter.

    Nor would figures about GDP growth in the previous two quarters.

    To figure out if you’re in a recession in real time, there are measures like unemployment applications, new home starts, and the like, but what you gain in timeliness, you lose in precision.

  111. Nobody owns the weather, but I’ll take the figures on weather and climate given to me by meteorologists over what my gut says.

  112. There are many common terms that have technical meanings in specific fields: “work” in physics, for example.

    I’d say the economists at the BEA and NBER are conversant with the specific, technical usage of common terms that have specific meanings in the field of economics. From the link I provided: While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation…The NBER recession is a monthly concept that takes account of a number of monthly indicators-such as employment, personal income, and industrial production-as well as quarterly GDP growth.

  113. joe,

    I swear, if you don’t learn how to close italics tags, I’m going to do a special on you over at Urkobold.

  114. Actually…no comment. However, Colorado’s “half” of the 1990 national championship in football is completely bogus and I dont acknowledge it.

    I’m in full agreement with you there.Nice to see them beat the ‘dawgs this year.

    NBER is not the government.The government does measure GDP though.

  115. BDB,

    To compare this to meteorology, one doesn’t even need to go into argument from authority.

    No one owns the weather, but I’ll take the predictions of somebody looking at air pressure, wind speed, wind direction, relative humidity, temperature, and the change over time for each of those measures over the prediction of someone who only looks at temperature.

  116. Only way to settle the argument of Recession/Depression is the democratic way. All in favor of:

    Recession-Press 1

    Depression-Press 2

    Business as normal/Government screwing things up with regulation/taxes-Press 3

    If 3 caused the Recession/Depression you may vote more than once. There, now everyone can feel better, it’ll be settled, just like abortion and gun control.

    Now, back to regular programming.

  117. “No one owns the weather, but I’ll take the predictions of somebody looking at air pressure, wind speed, wind direction, relative humidity, temperature, and the change over time for each of those measures over the prediction of someone who only looks at temperature.”

    Yeah, that works too. Better, actually.

  118. [bushfart]

    C’mon, people. Everyone can see the recession began in January of 2009. They even have the exact day – the 20th. What to make of that?

    [/bushfart]

  119. It’s the OBAMA RECESSION!

  120. Nice to see them beat the ‘dawgs this year.

    Revenge against LSU in the Peach seems likely too.

  121. Notice that despite the official name as the “Chik-Fil-A Bowl” I still refer to the bowl game in Atlanta as the “Peach Bowl”.

  122. My tags are fine.

    Nuthin’ but quote.

  123. robc | December 2, 2008, 12:27pm | #

    Notice that despite the official name as the “Chik-Fil-A Bowl” I still refer to the bowl game in Atlanta as the “Peach Bowl”.

    You got me there. That’s a pretty damn good argument.

    Chik-fil-A Bowl. Uh, can I get mine with a side of dignity? No, no you may not.

  124. I haven’t even posted on this thread yet, wingtard libernuts!

  125. joe,

    My tags are fine.

    See your 12:00 post.

    You got me there. That’s a pretty damn good argument.

    I knew you would come around. I just hadnt made the right analogy yet.

  126. joe,

    Tsk, tsk. Your mind tricks don’t work on me. I quote:

    joe,

    Its just a fucking label. It matters none at all whether it is official or not. Different people define it differently.i>

    Then why have you spent all of this effort insisting that the NBER’s definition is wrong, and your right?

    Clearly evident in your posting is the unclosed and improperly constructed italics tag! For the world to see! J’accuse!

  127. Before there was such a thing as macroeconomic policy, or the notion that the Federal government ran the economy, there was a private research organization called the National Bureau of Economic Research that collected information about economic performance over time. They were especially interested in the “Business Cycle.” The data was pretty poor, but such as it was, they collected it, and analyized it. What is pro-cyclical? What is counter-cyclical? What is noncyclical? What leads? What lags? They came up with the expansion, contraction, peak, and trough terminology.

    They are still at it, with the much better economic data generated by the government.

    If you had read your econ text carefully, you would have seen that two consecutive quarters of negative GDP growth was never the definition of recession. It has always been a bit vague what it would be exactly. Broad and sustained reduction in economic activity.

    In my opinion, if _real_ GDP is below long term trend growth bath, then there may be a problem. Generally, with growing productivity and labor force, real production “should” grow at about 3% a year. Now, perhaps the labor force might grow less for a time. Maybe there is a slow period for productivity growth. But.. generally, the economy should be “growing” at about 3% a year.

    But, the NBER doesn’t define recessions as the economy failing to grow at capacity or excessive unemployment. They instead look at the direction of economic activity. Is it expanding or contracting?

    It is always “real” and never “per capita.”

    As for Wiki’s theory of the difference between
    recession and depression… I don’t believe it.
    They were all depressions before the great depresssion, and then we started calling them
    recessions.

  128. Oops, missed that one.

    Not just the right analogy, the precise example. Chik-fil-A Bowl? Who’s going to defend that?

  129. J’accuse!

    joe’cuse?

  130. In the old days, the Poulan Weedeater Independence Bowl was the one to make fun of. But, yeah, Chik-fil-a Bowl (as tasty as they are) is just bad.

  131. joe,

    I thought of that, but I decided it was too cutesy for this particular posting. However, in a fit of generosity, I’ll give it to your regular opponents hereabouts. In fact, I demand that they use that (with italics to illustrate its foreign origins and contempt for your non-italical ways) to open all diatribes against you.

  132. Look, they have a fucking Flomax Bowl now. Chick-Fil-A is hardly the worst offender.

  133. I still call it the “Citrus Bowl”. “Capital One Bowl” is laaaaaame.

  134. “Citrus Bowl” ? Is that what they call the Tangerine Bowl now?

  135. Can’t spell Citrus without “UT”.

    Man, am I bitter at the idea of friggin’ Tennessee stealing the God Coordinator Monte Kiffin from the Bucs. Egad.

  136. Pro Lib,

    BWAHAHAHAHAHAHAHAHAHAHA!!!

    Disclaimer: I HATE the Bucs.

  137. Hate the Bucs? Whatever for?

  138. Pro Lib,

    They know what they did!

  139. TAO,

    As SIV points out the Florida Citrus council bought out the Tangerine Bowl and changed the name. So, it changing to Cap 1 Bowl isnt really any different.

    Pro Lib,

    Im hoping Monte Kiffin means one extra loss for ugag every year.

  140. Pro Lib,

    Seriously though, I have clout at the Superdome. I’ve been waiting to call in my chip for a wildcard game involving the Saints. Impossible this season thanks to the Bucs recent win.

  141. wow lots of comments.

    “More here, including a section about President Bush that seems to contradict Bernanke’s this-ain’t-the-’30s view:”

    Not really. Technically Bernanke said we’re not in the next Great Depression currently at the moment.

    Bush said Bernanke and Paulson told him we will enter the next Great Depression if we do nothing. Bush ain’t as bad as the peaceniks believe.

    In other words, they were contradicting John McCain’s Baghdad Bob moment during the campaign when he said “the fundamentals of the economy are sound” right before Lehman brothers failed.

  142. Perversely, I only ever desire to eat Chik-Fil-A on Sunday.

  143. Ah, it’s interdivisional hatred. Well, that’s okay.

  144. I think if the Obama’s would just announce their dog, the gloom would lift and we can all be consumers again.

  145. Look, they have a fucking Flomax Bowl now.

    Flowmax…Bowl? Bowl?!?

    Noooooooooooo!!!!!!!!!!!

  146. Still, the Fed chief said lessons learned from the Depression may still apply today, including the “excessively tight monetary policy” that led to higher interest rates and deflation of about 10 percent a year over the first three years of the 1930s.

    There is about as much relation between a tight monetary policy and the current bailout spree, as there is between a bout of constipation and an enema with a firehose.

  147. Even the republicrats and evangelicrats are now supportive of this great general, who stood up to be counted and for America…not like Powell and the other Bush/Cheney cronies. Another super addition to a team that will turn out to be the greatest administration that this country has ever had. And Lord knows that this is what our country needs. The “rats” now don’t even talk about the Pres Bush, who seems missing, but keeps harping on about Obama who has not even taken the oath as yet. I remember how talk radio kept referring to him as the “messiah” and their wishes will come true on 20th Jan. That is what this country needs now to lead our great nation out of this abyss.

  148. As a “Brit” visiting Panama City I am particularly interested in the debate about your government’s healthcare plans, and if some of your readers may not be familiar with our UK National Health Scheme perhaps I can give you some idea of how it works, based on my own recent experiences:
    1 Some five years ago I collapsed at home and had to be admitted to hospital suffering with an internal bleed. I stayed in hospital for nine days, on a drip and having a blood transfusion, until an exploratory operation cured this diverticular problem, and out I came ? all this being free of charge (FOC).
    2 I am now called back to that hospital annually to undergo an exploratory check to ensure that all is well and that there is no sign of tumors ? again, FOC.
    3 Three years ago I was diagnosed with high blood pressure during a routine visit to my doctor; I now take a daily tablet to ensure I’m OK and visit him every six months for blood tests, a blood pressure check and to renew my prescription for tablets ? again, FOC (although if I were under 60 years old this prescription would cost me about $10 per month and really make me grumble!).
    4 I can normally get an appointment to see my regular doctor within a week or so; if I have an emergency, I can be seen the same day by either him or one of his colleagues in the practice ? FOC. My records are on computer and can be called up by any of the doctors.
    The income tax and National Insurance contributions that I’ve made during my working life go towards, among other things, maintaining our National Health Service, and I can look back and think what wonderful foresight our post-war government had ? against many odds ? to set up this service; and by the way ? I’m not one of your dreaded socialists! Not only do I personally have good cause to feel grateful for this system, but I also recognize what a boon it is for everyone, in particular for those ? and there are many ? who are unable to afford healthcare. I think it is the mark of a civilized society when government sees it as a duty to provide all its citizens with a degree of free healthcare. I realize that our two systems have developed in different ways, and that there is strong opposition to changing yours. Ours is by no means perfect, but we have much to be thankful for!

    Pete Fenn

  149. believe DOD and the Army have crossed the line. Why did Sarah Palin get special dispensation to go on a military establishment to sell her book. This is a political move against the Copmmander in Chief, and the military leaders at Ft Bragg should pay the price and be fired.

  150. The Teabagger Socialist-Free Purity Pledge I , ________________________________, do solemnly swear to uphold the principles of a socialism-free society and heretofore pledge my word that I shall strictly adhere to the following: I will complain about the destruction of 1st Amendment Rights in this country, while I am duly being allowed to exercise my 1st Amendment Rights. I will complain about the destruction of my 2nd Amendment Rights in this country, while I am duly being allowed to exercise my 2nd Amendment rights by legally but brazenly brandishing unconcealed firearms in public. I will foreswear the time-honored principles of fairness, decency, and respect by screaming unintelligible platitudes regarding tyranny, Nazi-ism, and socialism at public town halls. Also. I pledge to eliminate all government intervention in my life. I will abstain from the use of and participation in any socialist goods and services including but not limited to the following: Social Security Medicare/Medicaid State Children’s Health Insurance Programs (SCHIP) Police, Fire, and Emergency Services US Postal Service Roads and Highways Air Travel (regulated by the socialist FAA) The US Railway System Public Subways and Metro Systems Public Bus and Lightrail Systems Rest Areas on Highways Sidewalks All Government-Funded Local/State Projects (e.g., see Iowa 2009 federal senate appropriations- – http://grassley.senate.gov/iss…..-73109.pdf ) Public Water and Sewer Services (goodbye socialist toilet, shower, dishwasher, kitchen sink, outdoor hose!) Public and State Universities and Colleges Public Primary and Secondary Schools Sesame Street Publicly Funded Anti-Drug Use Education for Children Public Museums Libraries Public Parks and Beaches State and National Parks Public Zoos Unemployment Insurance Municipal Garbage and Recycling Services Treatment at Any Hospital or Clinic That Ever Received Funding From Local, State or Federal Government (pretty much all of them) Medical Services and Medications That Were Created or Derived From Any Government Grant or Research Funding (again, pretty much all of them) Socialist Byproducts of Government Investment Such as Duct Tape and Velcro (Nazi-NASA Inventions) Use of the Internets, email, and networked computers, as the DoD’s ARPANET was the basis for subsequent computer networking Foodstuffs, Meats, Produce and Crops That Were Grown With, Fed With, Raised With or That Contain Inputs From Crops Grown With Government Subsidies Clothing Made from Crops (e.g. cotton) That Were Grown With or That Contain Inputs From Government Subsidies If a veteran of the government-run socialist US military, I will forego my VA benefits and insist on paying for my own medical care I will not tour socialist government buildings like the Capitol in Washington, D.C. I pledge to never take myself, my family, or my children on a tour of the following types of socialist locations, including but not limited to: Smithsonian Museums such as the Air and Space Museum or Museum of American History The socialist Washington, Lincoln, and Jefferson Monuments The government-operated Statue of Liberty The Grand Canyon The socialist World War II and Vietnam Veterans Memorials The government-run socialist-propaganda location known as Arlington National Cemetery All other public-funded socialist sites, whether it be in my state or in Washington, DC I will urge my Member of Congress and Senators to forego their government salary and government-provided healthcare. I will oppose and condemn the government-funded and therefore socialist military of the United States of America. I will boycott the products of socialist defense contractors such as GE, Lockheed-Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, Humana, FedEx, General Motors, Honeywell, and hundreds of others that are paid by our socialist government to produce goods for our socialist army. I will protest socialist security departments such as the Pentagon, FBI, CIA, Department of Homeland Security, TSA, Department of Justice and their socialist employees. Upon reaching eligible retirement age, I will tear up my socialist Social Security checks. Upon reaching age 65, I will forego Medicare and pay for my own private health insurance until I die. SWORN ON A BIBLE AND SIGNED THIS DAY OF ____________ IN THE YEAR______________. ___________________________ ___________________________ Signed Printed Name/Town and State
    Posted by antizealot

  151. Reminder that Bush and the GOP took 8 years to dig a deep ditch for the country spending like drunken sailors on unbudgeted wars, spying on Americans, not supporting Hurricane victims, torturing people, not capturing Osama Bin Laden, causing 9/11, unregulating the banks and then bailing them out of a crisis and the list goes on and on. Americans have a very short memory. Now, they expect the new Pres to dig the country out in less than 2 years. It will take time America and you all should have been making the same noise while Bush/Cheney and the GOP were on their rampage. In November, it boggles the mind that some folks would want to vote for people from the party which put us in our present unsavory state (which is now improving) in the first place. Pres Obama brought change to America and many Americans just don’t embrace change which is un-American as America leads the world in creative thinking and vision. Pres Obama (and that is what he should be addressed as in the news….not Obama) is a visionary and will lead all Americans, even those screaming and kicking, to more greatness in the 21st century.

  152. If the GOP is successful along with the Tea Party in buying our government power, it will signal that it is time for American workers to rise up as they are doing in Europe and take our country back…thanks to the Supreme Ct

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