If it looks like a recession and feels like a recession …
“Quite frankly,” said Senator Charles Schumer, peering over his glasses at the Fed chairman, Ben Bernanke, “I think we are at a moment of economic crisis, stemming from four key areas: falling housing prices, lack of confidence in creditworthiness, the weak dollar and high oil prices.”
He asked Mr. Bernanke, at a Congressional hearing Thursday, if we were headed toward a recession.
An aide handed the chairman his dancing shoes, and Mr. Bernanke executed a flawless version of the Washington waffle. He said: “Our forecast is for moderate, but positive, growth going forward.” He said: “Economists are extremely bad at predicting turning points, and we don’t pretend to be any better.” He said: “We have not calculated the probability of recession, and I wouldn’t want to offer that today.”
With all due respect to the chairman, he would see the recession that so many others are feeling if he would only open his eyes. While Mr. Bernanke and others are waiting for the official diagnosis (a decline in the gross domestic product for two successive quarters), the disease is spreading and has been spreading for some time.
Do you know what bothers me most about these stories? It is that there is an expectation of no suffering. Unless the economy is booming and literally drafting people into a wage war workers paradise, we think that something is terribly wrong.
I think something is terribly wrong with that attitude.
Don, there is something wrong with the article: The author is criticizing the Federal Reserve Bank and other “elites” for not recognizing that there is (allegedly) a recession in the US. However, the anecdotal information he cites largely has little to do with the technical definition of a recession. Instead, the author substitutes his own non-technical definition of “recession”, which appears to be, generally “economic hard times.” In essence, he creates the rhetorical straw man of a clueless and harsh government by using words to mean what he says, not what they really mean. Nothing that Bernancke said contradicted the op-ed writer’s anecdotal information. Nothing the op-ed writer wrote contradicted Bernancke’s precise answer that the US economy is not in a “recession”, as that term is defined by economists, who are the ones who devised it and use it (definition: two or more consecutive quarters of negative growth of the aggregate gross domestic product).
These are two people talking past each other, at least one of them intentionally. The op-ed writer finds it to his advantage to portray the policymakers in the Administration and in the Federal Reserve as stupid and lacking in empathy. To do this, he re-defines the term “recession” to mean something that Bernancke did not mean, and thus gets Bernancke to “say” something he did not say.
Ummm…
[blockquote] In an interview after the hearing, Representative Hinchey discussed the disconnect between official government reports and the reality facing working families…. [T]he most popular measure of inflation, the Consumer Price Index, does not include the cost of energy or food, “the two most significant aspects of the increased cost of living for the American people.â€[/blockquote]
This is just flat wrong.
I don’t know whether to fault Herbert as equally as Rep. Hinchey, but this is a stupendous level of ignorance.
http://www.bls.gov/cpi/cpifaq.htm#Question_7 explains, in terms even a reporter can understand:
[blockquote]
7. What goods and services does the CPI cover?
The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, service meals and snacks)
* HOUSING (rent of primary residence, owners’ equivalent rent, fuel oil, bedroom furniture)
* APPAREL (men’s shirts and sweaters, women’s dresses, jewelry)
* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
* MEDICAL CARE (prescription drugs and medical supplies, physicians’ services, eyeglasses and eye care, hospital services)
* RECREATION (televisions, pets and pet products, sports equipment, admissions);
* EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
* OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).
Also included within these major groups are various government-charged user fees, such as water and sewerage charges, auto registration fees, and vehicle tolls. In addition, the CPI includes taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services. However, the CPI excludes taxes (such as income and Social Security taxes) not directly associated with the purchase of consumer goods and services.
The CPI does not include investment items, such as stocks, bonds, real estate, and life insurance. (These items relate to savings and not to day-to-day consumption expenses.)
For each of the more than 200 item categories, using scientific statistical procedures, the Bureau has chosen samples of several hundred specific items within selected business establishments frequented by consumers to represent the thousands of varieties available in the marketplace. For example, in a given supermarket, the Bureau may choose a plastic bag of golden delicious apples, U.S. extra fancy grade, weighing 4.4 pounds to represent the Apples category.[/blockquote]
Forgive me, but what a total idiot…
Since the source is the NY Times, this is obviously another attack on the Bush administration. I guess the recent positive news from Iraq has them looking for other news to carry on their vendetta against the administration.
2. KevinBabb:
I agree with vigor.
What I ask was, “what bothers me most about these stories?”
There is also #s 2, 3, 4, 5,…..
The lateset unemployment figures for the U.S. is 4.7%, one of the lowest figures in recent history.