It was with great giddiness that the word spread throughout the land yesterday: The recession is over! The recession is over! One half-expected Paul Revere to dismount at the end of the news report.
The National Bureau of Economic Research deemed the 18-month recession officially ended in June 2009. There are only a few pesky problems with that declaration: What to do with those 14.9 million or so people who still don't have jobs (more if you count those who have given up looking out of futility)? Or the foreclosure plague that has wiped out entire communities? Or the fact that food banks are stressed to the breaking point with hungry families? Or that more than a few people can't remember what the inside of a shopping mall looks like and panic when they misplace a grocery coupon?
The recession may have ended, but the recovery is refusing to be born. Back in April, the high-falutin' NBER declined to say the recession had ended. Mind you, this is the same group that finally declared us in a recession about a year after everybody else -- including my gardener -- knew it. The NBER normally takes its time declaring a recession has started or ended. It announced in December 2008 that the recession had actually started one year earlier, in December 2007.
It's just words, people, just words. The recession is over when you say it is, not when the National Bureau of Economic Research says so. According to the Bureau, the recession lasted 18 months and the calendar shut on it in June 2009. That's the point when the economy started growing again, in the July-to-September quarter of 2009. The NBER did make this concession to reality: "The committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity." Really Sherlock?
So what's really the point of NBER's proclamations? They are primarily of interest to economic historians and political leaders. If a recession occurs on a politician's watch, it's a political liability. By saying this recession started in December 2007, it becomes President Bush's problem -- at least in theory. Unfortunately for President Obama, nobody nearing their 99th week of collecting unemployment benefits or waiting in a soup kitchen line for dinner cares. Bush's policies may have caused the problem, but Obama's haven't fixed it.
The numbers don't lie. The nation's official poverty rate was 14.3% in 2009, up from 13.2% in 2008. That's 43.6 million Americans living in poverty in 2008, up from 39.8 million in 2008 -- the third consecutive annual increase. The number of people without health insurance coverage rose from 46.3 million in 2008 to 50.7 million in 2009. That's an increase from 15.4% to 16.7% over the same period.
And as for unemployment? Given that the government only counts those who are filing claims for jobless benefits, the numbers they bandy about are bogus. They don't count the long-term unemployed whose benefits have run out. Nor do they count those who are eking out livings through a string of part-time gigs -- none of which provide health insurance, paid time off, disability insurance or a retirement plan.
The recession is over? That's nice. Let's tell Paul Revere to bring us some real news.
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