Larry Summers: Recession Is Over Because Everybody Agrees


Regular readers know that I am madly in love with the Great Recession. At first it was just a casual thing. Before I knew it I was feeling the kind of goofy, exhilarating crush I hadn't felt since I was a teenager. Now it's a full-blown amour fou.

Leave it to Larry Summers to insert his carcass between me and the object of my desire. Here is the director of President Obama's National Economic Council declaring the end of the affair to George Stephanopolous:

During my "This Week" interview, Summers said that "everybody agrees that the recession is over," but he did not say when the unemployment rate could be expected to drop further.

Can the greatest genius of all time be wrong? Revised third-quarter GDP growth is said to be 2.8 percent. That's within the margin of GDP-boost that Council of Economic Advisors chairwoman Christina Romer claims has been created by government stimulus, but it's still growth. We have also seen two consecutive quarters of growth in net worth. Inflation may finally have been achieved, as the Consumer Price Index increased 0.3 percent in October and is expected to rise again for November. November retail sales were up slightly over last year. (Though I have yet to see a more-than-half-full parking lot at a shopping center this Festivus season.)

Meanwhile I'm down to "you can't leave; all the plants will die" pleading: The transportation services index is still tanking. (Zzzz!) Unemployment continues to exceed expectations. (Better luck next time, suckers!) Is the recession really over? Can something this magical just up and runnoft?

Love hopes all things. Over there, in that German paper, look! It's Mr. Right: former Fed chairman and current U.S. Economic Recovery Advisory Board Chair Paul Volcker, giving a non-prediction prediction that more pain is still to come:

SPIEGEL: But even though there are still more people being fired than hired, the Chairman of the Federal Reserve Ben Bernanke is saying that the recession is technically over. Do you agree with him?

Volcker: You know, people get very technical about these things. We had a quarter of increased growth but I don't think we are out of the woods.

SPIEGEL: You expect a backlash?

Volcker: The recovery is quite slow and I expect it to continue to be pretty slow and restrained for a variety of reasons and the possibility of a relapse can't be entirely discounted. I'm not predicting it but I think we have to be careful.