It's the economic version of the kids in the backseat asking "Are we there yet?" The masses would like to know already whether the Great Recession is over yet. The short answer: Not officially. At least not according to the National Bureau of Economic Research, considered the U.S.'s semi-official recession arbiter. (Problem is, of course, that this same committee took about a year longer than the rest of us to even figure out that we were in a recession.)
This high-falutin' committee wasn't ready to officially pronounce us out of the economic woods today. But unofficially, the answer to whether the recession is over resides a little closer to home. Simply put, if you're still asking the question, it probably hasn't ended for you personally -- which frankly, is the only answer that really matters at the end of the unemployed day.
What makes the situation so laughable -- that's laughable in a maniacal kind of way -- is that the world is so eager to have this misery end that publications and experts have been proclaiming the recession over since the spring of 2009 -- with most of the proclaimers hoping to be recorded in history as the one able to say "I told you so first."
First we had Forbes telling us that the recession was over in May 2009. That's when weekly columnists Brian S. Wesbury and Robert Stein wrote "When the NBER eventually gets around to declaring the recession end date, we think it will be May 2009." Fellas, you're off by a year. So far.
Their logic was that new unemployment claims were "the very best single indicator of the end of a recession." They wrote that the monthly average for claims normally peaks a month or two before the economy bottoms out, and that claims appeared to have peaked in March 2009 at 658,000 versus April's 635,000 unemployed bodies hitting the unemployment office. Maybe they want to tell that to the 23 million or so people who opened new unemployment claims since then. Remind me not to go to the track with those two.
Then came the summer of 2009, where Newsweek's cover declared the recession officially over. That one caused more than one head to be scratched and I suspect ranks right up there in journalism's bloopers with with the "Dewey Defeats Truman" headline in the Chicago Tribune. Writer Daniel Gross pegged the end of the recession to the end of the economic output contraction. To simplify what he said: No new jobs were being created, people were losing the ones they had, but the federal government had a plan so this was a good thing. Not even Obama agreed with him about the recession being over. Gross wrote, "Having survived a near-death economic experience, Americans now need to focus on surviving what's likely to be a pokey, painful recovery." Got that part right, Dan.
Fed Chairman Ben S. Bernanke jumped on the "recession has ended" bandwagon in September 2009. To be fair, he couched it as "likely to have ended," which is a good thing since just last week his No. 2 -- Fed Reserve Vice Chairman Donald Kohn -- allowed as to how the economy appears to be on a sustainable path but not growing "as quickly as we all would like."
And today even one member of the NBER committee dissented and issued his own viewpoint that things are looking plenty rosy. Robert J. Gordon of Northwestern University said it was "obvious" that the recession is over because the GDP has made such a strong recovery. My guess is Mr. Gordon still has his job.
Now I admit that when writers use terms like "stagflation environment" they kind of lose me, but I admire the candor of one leading economist -- Mark Zandi, chief economist at Moody's Analytics -- who while proclaiming flat-out that "The Great Recession is over" in January 2010, was quick to add that it was "over" in a way that probably only an economist could love.
"Not until we start to see jobs will, I think, people believe that the recession is over," he said. Amen, brother.
If you are still among the unemployed, it matters little whether the economy at-large is doing better and even less whether it might turn downward again in a so-called double dip recession. The bottom line: The recession will be over when people personally find themselves with full time time jobs, can finally sell their homes, and restore normalcy to their own lives. Until then, it's struggles as usual and maybe a cancellation of their Newsweek subscription.
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