Ben Bernanke Has Claimed The Recession Is Over. Do You Believe Him?
In strict economic terms, which is what you can expect from any man in his position, a recession is two consecutive quarters of negative economic growth. The economy is no longer experiencing negative growth, therefore the recession is, in fact, over.
In more human terms, people are still losing their jobs, the housing market still sucks, businesses are still closing and credit is still playing hard-to-get, so for many, the recession is still wreaking havoc.
Just depends on your perspective.
Fortunately for my family, the biggest effect of the recession (my husband's lay off of 6 months) is over. However, the job he was able to get is a two hour train ride away (each direction). He is on-call on the weekends as well with this more global software engineering job, and seems to be dancing quickly to be sure he doesn't lose this job at least. The pay seems less because of our increased expenses: train $300 a month and new used car payment. (Our 1992 Toyota with 245,000 miles broke down during this period, so we had to buy a new car with monthly payments). We were hoping to get a house during the lower prices in California, but all the investors are buying up the homes before they hit the market. So the recession, in and of itself, seems less relevant to me than the system of changes that has made the wealthy even farther ahead inspite of the recession and the rest of us further behind. (And I didn't even see Michael Moore's movie as yet). But we're grateful for the chance to work and to continue trying. It's just work.
This is like George Bush's proclamation of "Mission Accomplished".
Nope! This is a case of only one shoe falling... the other shoe hasn't hit the floor yet, and it may be a centipede we're talking about.
Good, old Ben is admittedly an "expert" on the Great Depression. Unfortunately the current economic situation is NOTHING like that of the 1930s: we no longer have a gold or silver standard, we operate in a GLOBAL marketplace (when America sneezes the world catches a cold, but when China farts... oh my!) AND governments around the world have allowed their Treasuries to simply print $Trillions and dumped it into the global pot.
Impossible to say the recession is over when we haven't even started to release the mechanism of the consequences: increased taxation and inflation... and woe betide us, if the ObamaHealth actually gets voted in.
Forgetting all of the above for a minute... If it took them over a year to actually admit OFFICIALLY that we were in a recession, can you really beleive ANYTHING this governement says? Really??
Yes, but it is like a child who falls in a hole. When he hits the bottom he is no longer falling (thats good!) but he is also at the bottom of a hole. Technically, our economy is no longer falling.
The NBER BCDC (the people who define when a recession begins and ends) say the following:
"A recession is a period between a peak and a trough, and an expansion is a period between a trough and a peak. During a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year. Similarly, during an expansion, economic activity rises substantially, spreads across the economy, and usually lasts for several years."
By this metric, the recession is over. Economic activity is picking up and people are (slowly) being hired. Unfortunately, we are in a very deep hole.
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