Is the Recession Really Over?
Posted by John Cassidy
Just when you thought that the public’s esteem for economists couldn’t go any lower, along comes a panel of “experts” from the and announces that the recession that began in December, 2007, ended in June, 2009 . Apparently, we have been enjoying fifteen months of economic recovery.
From San Diego to Portland, Maine, the howls of derision could be heard—or read online. “Did we hire the three stooges in the National Bureau of Economic Research? I bet they hit themselves in the head every minute,” wrote Jane on Yahoo News. “Must be ‘Harvard’ brains,” added Proud American. “Recession ended? B.S.,” chimed in Roy.
On the face of things, it is hard to argue with Roy’s succinct conclusion. With roughly one on six Americans jobless, too discouraged to seek employment, or working part time because they can’t find a full-time job, suggesting that the economic slump ended more than a year ago sounds absurd. It isn’t just the dire state of the labor market. Industrial production fell in August; the number of home foreclosures reached a record; and the core rate of inflation fell to 0.9 per cent, raising fears of deflation. No wonder another Yahoo commenter suggested that the N.B.E.R. panel be given an award for science fiction.
So, what planet do these guys live on? Proud American was right: the answer is Planet Ivy League. Three of the seven members of the N.B.E.R.’s Business Cycle Dating Committee—Martin Feldstein, Jeffrey Frankel, and James Stock—teach at Harvard. The others are at M.I.T. (James Poterba), Northwestern (Robert Gordon), Princeton (Mark Watson), and Stanford (Robert Hall). But before you call up your local Tea Party representative and try to organize a march on Cambridge, Mass, you might want to download the official announcement from the N.B.E.R. and read it in its entirety. For that is where you will find the get-out clause:
In determining that a trough occurred in June 2009, the committee did not