Why Not Just Change the Definition of a Recession?
January 9, 2008
During the past decade, there has been this push to change the definition of words. Don’t like the definition of marriage? Go change it.
How about the definition of an expulsion? When I was in high school, if you got expelled, you were expected to never step foot on campus again, period. These days, a expulsion is expressed in a number of days. That used to be a suspension didn’t it?
In The Hartford Courant’s business section today, they are pushing the recession theme again. If not redefining a recession, they are certainly promoting that fact that we’re in the beginning phases of one. Run for the hills!
With all of the media gloom and doom during the past seven years, you’d think that we’ve been in-and-out of a recession since GWB took office. Here’s the link to the full article.
“Recessions are only apparent with hindsight,” said Nicholas Perna, economic adviser to Western Financial Corp.
It’s likely that when “we look back at the first quarter of 2008, we’ll see we are in a recession,” said Nariman Behravesh, chief economist and executive vice president of Boston-based Global Insight, an economic consulting firm. A recession is commonly defined as a decline in real gross domestic product over two consecutive quarters.
Well, in my day it was three consecutive quarters, but who’s counting.
If you look back at GDP percentage change based on chained-year 2000 dollars, you’ll see a bump in the road in 2000 and 2001, the biggest bump in the third quarter of 2001. (Do you remember why?)
2001 Q3 = -1.4 percent
2001 Q1 = -0.5 percent
2000 Q3 = -0.5 percent
You have to go back to the fourth quarter in 1990 and the first quarter in 1991 to find two quarters back-to-back with negative growth in GDP, and all the way back to the winter of 1974-1975 to find three quarters of negative growth – the true definition of a recession.
- Every single quarter since October of 2001 has shown a positive growth in GDP.
- The GDP has almost tripled since 1991.
- Personal income has doubled since 1991.
There certainly have been bumps in the road, and there always will be, but come on!
So why change the definition of a recession? Well if you can’t get what you want, you might as well lie or change the rules of the game. Right now, the liberal press and college indoctrination centers want power and control, so they will changed definitions at will to fit their agenda – simple as that.
Last month I posted commentary concerning the fact that Massachusetts will most likely loose a congressional seat after the 2010 census. It’s the same game plan. Since the current rules – on how to count people – don’t work for them, they want to change the rules of the game and find more people to count; maybe change the algorithm or something.
All they need is a calculator; and a dictionary.
Related Links:
- U.S. Department of Commerce, Bureau of Economic Analysis has all of the information you need for reference.
If You Can’t Afford It…
December 24, 2007
The Hartford Courant – along with a bunch of other MSM outlets – released an AP news story detailing how more and more people are falling behind on their credit card debt.
The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP. That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.
At the same time, defaults — when lenders essentially give up hope of ever being repaid and write off the debt — rose 18 percent to almost $961 million in October from a year ago, according to filings made by the trusts with the Securities and Exchange Commission.
Serious delinquencies also are up sharply: Some of the nation’s biggest lenders — including Advanta, GE Money Bank and HSBC — reported increases of 50 percent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.
Of course…
Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.
Yeah right. Now that the people – who were not smart enough to realize what an ADJUSTABLE rate mortgage is – got the government to force banks to cut them a break, they figure now is the time to start complaining about the high interest and payments that they have on their credit card debt.
Borrowing words from James Tolkan’s character Stinger in Top Gun, “Son, your ego is writing checks your body can’t cash.”
And as Michelle Malkin has stated.
Suck. It. Up.
Right on. Maybe these folks should just stop spending money that they don’t have. All indicators tell us there will be a federal bailout coming to cover the credit card payment crisis that is most certainly around the corner. Start spending now!
What Happens When Less Seats are Available?
December 19, 2007
I fondly remember struggling through my first economics class in 1987 or 88. At the time, economics was a pretty difficult concept for me to grasp even though my dad was an economics major in college. The subject was not in the genes. But over time, I have been able to figure out some of the basics that most Americans – and government officials – can’t seem to handle.
Two of the more simple concepts are the law of supply and the law of demand. When you artifically mess with the laws, you need to expect an artificial change that will be bad for consumers.
Today, the transportation secretary announced that after months of discussions with airlines that service the New York City area, the airlines agreed (were forced) to reduce the number of flights flying in and out of the three major airports surrounding the city.
With less seats available during the peak travel times, what do you think is going to happen to the price of an airline seat out of New York? It’s going up. Let’s see what happens in the future, will my prediction come true?
By limiting the number of airline seats available, the government – as usual – is not dealing with the problem. All they are doing is interrupting the supply and demand curves artificially.
