Talkback: ‘Recession…or not?’

No alternative public transportation – but you can not afford to buy gas. No alternative to Foreign oil because the politicians are well paid for which means food, utilities are higher – but no increase in pay and actually the pay scale of 7 to 14 dollars in my area is the same as it was 15 years ago.

Recession? Hell no! Survival!

Wow . . . The current administration and Congress say the sky is falling and everyone just believes it. What a bunch of gullible people.

It is an election year!!! They need a terrible crisis to blame on the other party. You think no one saw this thing coming? Ask Greenspan!!! This is all pure spin.

The DOW dipped 777 points and the NASDAQ dipped almost 200 points because the President, Congress and the media are all claiming that the sky if falling.

Congress created the situation!!!!! They don’t need our money to fix it. Just change the banking laws that allowed this to happen so that it can’t happen again. But, oh, no . . . that is too simple.

Congress wants to spend $700 Billion to save the tax-payers from something they created.

we’re borrowing more than we could afford
to pay . We’re saving way less than asian
countries . Those financial companies
suffered because of thier own greediness.

Let’s be honest. At least here in California, we’ve been in a recession for at least 18 months and a depression for almost 2 months. Check the numbers, check the facts, we’re already rolling in poo people.

I say that everyone who believes that we are in a recession/on the brink of total economic collapse needs to band together. We must create conscious-raising groups so we know that we are not fighting this battle alone, just like activists have done in the past to create social change. We must come together as people. By the technical definition we may not be in a recession, but if the people who believe there is no recession would go and have their eyes opened to the way many people in this country live, maybe they would think otherwise. Why not take the 1% of the population who are so ridiculously wealthy it’s sickening, and have them write some checks. They may say, “that’s not fair, it’s my money, I’ve worked for it,” which may or may not be true, but let’s just call the bailout plan what it is: taking from the poor/average joe to support the rich. I guess I’m advocating the Robin Hood Doctrine. Obviously, our country’s current doctrine is not working. We need to stop this top-down economy. We’ve had a fake one for awhile now, an economy that makes us think everything is fine, when it’s not. This article just further supports the attitude that “We’re America—we can’t be failing.” Democrats and Republicans must come together now more than ever. We must stop the rhetoric and disdain toward one another and think logically and rationally. We need to start caring about our people, our environment, and our future. A sound decision must be made—the Depression II, like one we’ve never known before is right around the corner. The question is: how will we deal with it?

Whatever decisions are made in the next days, weeks, and months ahead, including the presidential election, will forever seal the fate of this nation.

You can’t truly call it growth if the money fueling the growth is coming from ill-advised loans!

A terribly flawed article. The federal government has, for political reasons, manipulated the numbers used to calculate GDP for some time now. Heck, CNN reported just today that real incomes were down 0.9% in August alone. Consumer confidence as reflected by consumer spending is a far better indicator of whether we’re in a recession–which we’ve obviously been in for at least the past 18 months.

Narrowly trained people have tunnel vision. 1) We are in a recession, the books are cooked until after the election. 2) does it matter when we are heading towards a cliff due to the trade imbalance funded by foreign money which will not go on forever. Nor does it matter when the boomers retire and there is insufficient retirement money nor does it matter when Climate Change makes Ike & Rita look like the good ole days.

The party in power cooks the books election season so the numbers do not show the recession. Duh. This always becomes obvious after the election. Duh

With all that has gone on, to say there isnt a recession is frankly frightening. What else will have to happen to state that there is a recession? If it looks like a duck, quacks like a duck, on the street, it is a duck. The bigger issue is a viable recovery plan

First, I think we need to re-define the word recession. Obviously, the definition has changed. So you mean to tell me, our economy needs to collaspe more to be called a RECESSION? I totally disagree with this article. We have been in a recession for at least a year.

As I had stated about a Financial Armageddon, here in Fortune back in February, I am urging everyone to stand behind this bailout plan: otherwise, we will another depression. Timing was the essence for Congress to pass this over the weekend before the European and Asian Markets commenced trading and they blew it big time! Now we are seeing that the investors from abroad are taking out their investments at a very rapid pace. And if you think this doesn’t affect the little people, like you and me, then you have another thing coming. The failure of Congress to act over the weekend has inflicted a larger wound that would take a very long time to heal. Even if they pass a plan today, it’s a little too late. But a plan passed over the past weekend would’ve staved off the turmoil we are seeing today. As usual, hear me now, believe me later.

Personal debt, low interest, failing companies, failing banks, inflation, printing more money, excessive speculation, falling currency, debt obligations to foreign countries…Can we say Wiemar Republic anyone?

Recession by definition maybe or maybe not, but what most people fail to recognize is that there are two aspects of the current situation completely over looked: Under-employment and
People going off unemployment benefits who are no longer counted. The house of cards is collapsing.

As with the rhetoric of the past, the politicians are now telling us that they are so much more intelligent than we are that we, “don’t understand the complexities of the modern economy”. We do understand what it is like to live in recession as we have been enduring the loss of jobs, the minimal (if any) raise in pay, the increasing costs of tring to just survive, for the past 5 years.
Recession? Where have these people been? Depression? Yes, it well may be just around the corner. Having struggled up from a poor childhoood, I will gladly “Spare a dime”, a piece of bread, or a helping hand to any American in order that we bring backk a TRUE AMERICA!

LOL recession , we have been in one for about a yr. this will tell ture in the future when we look back at this time. A depression is in our future believe me, this goes way beyond just America Asia, Europe, even in the middle east are feeling recession in their finical systems. Americans seem to look the other way and ignore the signs of a recession. Again this goes way beyond just America. All it would take for America to go down is for China to say no more money. what is America going to do print more money , bring the dollar down even further ?

We are on thge eve of a CRASH, not a recession, which is a slowdown. The difference is that between a slow leak which brings a ar to a gradual stop with a flat tire, and a blowout, which at high speed, can cause the car to lurch out of control and be fatal. It’s the red light which suddenly lights up in your car (say, after a heavy loss of oil pressure) and if you continue to drive you blow your engine. This is why the faces of Paulson and Bernanke (and Se. Gregg) – are so fallen – they are not sleeping well. When they do fall asleep they have nightmares of 1929 and the thirties – remember “brother, can you spare a dime”? This is what’s at stake, nothing more nothing less.

As we have seen over the past 10 years or so, the ’slight of hand’ manipulations of numbers can make even the sickest economy look relatively healthy. If the Carter Administration had the current crop of ‘economic chefs’, he probably wouldn’t have the poor reputation he does regarding his handling of the economy.
Come on, do you really believe that we are not in a recession? Do you believe that the largest government bailout since the Great Depression was not a last ditch effort to prevent a repeat of the 1930s?! If you do, then I suggest you take your head out of sand, stop hiding behind Pollyanna accounting procedures, and talk with the people of this country.

It’s cute how the Bush administration says, “…the economy is fundamentally strong, but is using hundreds of billions of our dollars to bail out a bunch of fat cats…I’m voting democrat.

I personally don’t know what to think. I am making the most money now than ever in my life and all I have is a high school diploma. I go to get coffee everyday and the place is jammed most of the time. It seems everywhere I go I have to wait in line.

There is economic activity out there everywhere. Prices have gone up but I get pay raises. I guess all this about the economy is all on who you ask.

We are in a recession! It is always the rich and well-paid, well-educated people who say its psychological. There is no recession, what are you talking about as they play golf, take home paychecks of $200,000 a year. Its the wealthy that tell the poor your not poor it is your frame of mind. Simply do more with less. The reason why we are told by many of our well-paid counterparts we are not in a recession is because their neighbors house is not being foreclosed on, their buddy in the cube next to them are not taking degrading collection calls from a credit card company, there spouse was not laid off and has been looking for decent paying work for weeks, their were not passed up for a 3% raise 2x in a row, and they are not constantly hearing the buzz word right-sizing while the top management continue to recieve higher raises and bonuses. They don’t have friends who make minimum wage with no healthcare and are expected to pay high rents, high food prices, high gas, and on top of that make sure you save to retire.

Because the risk is put on the middle and lower class, look at Fannie Mae and AIG, in today’s America lets our wealthy privatize profits and socialize risks.

The GDP isn’t shrinking… but the money doesn’t buy as much and money isnt rising as fast as costs. So, technically not a recession but all that tells us is that the definition of “recession” is outdated and needs to be revised or disregarded.

Technically, we are not in a recession that is 2 consecutive quarters of negative growth. The economics term of what we are currently in is called stagflation, a period of stagnant wages and growing product prices. The overall felt effect is similar to a recession with out the job losses. We are in a time with the highest income differential between the poor and the rich since the grate depression of the 30’s 40’s. The lower halve of the economy is in a negative growth while the upper halve is in positive growth with the over all growth in the small positive numbers.

In closing we are in a stagflation and almost in a ression a double whammy for times I think will be for the next 5 or 10 years. The solution to this mess is easy, pay off your debts. The hard part of this is actually getting it done.

Of course we’re in a recession — soon to be The Great Depression II.

The GDP and other numbers put out by the government are totally manipulated in order to fool people into thinking all is well. REAL GDP is negative. REAL inflation is running at 14%, as is REAL unemployment. With the Fed printing funny money at a breakneck pace to cover not only Bush’s deficits but Wall Street’s excesses, inflation will go through the roof leading to a hyperinflationary depression.

SEE: http://www.shadowstats.com for the REAL numbers.

Technically speaking, we may not be in a recession, but if the government had not taken control of AIG, the world economy would have ground to a halt, which would have been a lot worse than a recession. We’re just about three steps from economic disaster, so I don’t see much reason to rejoice.

Are you serious? Things are bad and getting worse. Everything is up except income…I don’t know how many are getting by right now. Food,Gas,Housing, and just wait til winter…things are going to go downhill fast when everyone has to by heating oil. Just Wait. But the Bush administration will tell everyone that things are fine!

There are a few points, which are worthy of emphasis here. First, (as with discussion on “money supply” or “income”) “recession” (even in the technical definition) could be discussed in the “Real” or “Nominal” Contexts. For example, $50 today is more than $25 at any point in time in ‘nominal’ terms, but worth far less than $25 in 1930 in “real” terms, that is, in purchasing power terms, as a result of inflation over time. It may be an accurate statement that in “strict nominal sense” the technical measurements indicate that we are not in a “recession”, but (as with the $50 example) it is the “real” definition that is relevant… that is, as adjusted for illusory affects, so as to reflect the real impact upon standard of living. The biggest illusory effect (in this case) is government spending. The prevailing “nominal” definition of a recession is a decline in GNP for 2 consecutive quarters, which includes government spending. So, technically then, no matter how deeply we were into an actual recession, the government could simply increase government spending until the total outflow finally exceeded the previous quarter, and “magically” the technical existence of a “recession” could be averted. This means, that the government could spend at record deficit levels, until we were literally driven into a national bankruptcy, and until that moment, we could continue to deny that we were “technically” in a recession. Hmmmmm…. kind of looks like what’s happening, doesn’t it. This shows how subject to manipulation the recession stats are. Of course, if all that money were being spent within our borders… it might actually stimulate a recovery, but since the bulk of that deficit spending is being spent overseas… we get the negatives without the positives. The primary POINT is that this “recession denial behavior” is little more than a “deceptive shell game”. It is unequivocally clear, that IF the overseas deficit spending were removed from the “Recession” equation, we would be left with a much more “true” reflection of our domestic picture, and there is little doubt that it would show that we are in a true recession (if not depression) in the “REAL” sense of the term… that is, as adjusted for illusory number influences. That being said…. the bigger point is… this illustrates the root problem… that we cannot trust our leaders to speak honestly to us… (even if the denial was defensible as a single statement, good faith ethics (as required by force of law) require a “full disclosure of relevant context”, when a single statement of truth has a misleading effect)… in otherwords…. our leaders are being intentionally deceptive… revealing a lack of intent to take corrective action, which would logically be tied to a recognition of the truth. It is also not fair, reasonable, or accurate to blame “the people” for causing their own problems by being fiscally irresponsible, themselves. It may be that some did make weak decisions, regarding mortgages, but the vast majority of people suffering today… are not suffering because of their own actions, they are suffering because of bad faith actions on the part of business and government. Most people are not asking for the same socialistic bailouts that too many business are getting… they are simply asking that we hold our leadership in government and business accountable for their bad faith moves, and their own irresponsibilities. We need to be able to rely upon our leaders to act, truly, in the best interest of the people… and not in the interest of pandering to political sponsors, or lining their own pockets at the expense of the common man. Finally, while the Real Estate Bubble, contributed to this problem, the real culprit was the tripling (quadrupling) of oil, and the downstream effects. We need a new Manhattan project (similar to the one that solved the Nuclear Fission problem in the 1940s) to quickly resolve the Cold Fusion Problem so that we can quickly develop clean, safe, abundant, cheap, nuclear energy, and make our dependence on oil (and most other energy sources) a thing of the past. This is a matter of grave national security, which is being overlooked in favor of alternatives that can never deliver on that same promise of 85% replacement of our dependence upon oil (including solar, wind & biofuels). Let’s keep our focus where it needs to be. I’m ready for election reform, and accountability for congressional fiscal responsibility. A good start would be to press for a “Truth in Government Reporting Act”, which among other things, would require that Congress report the TRUE budget deficit, instead of reporing Social Security receipts (a receipt of a temporary deposit, which carries an attendant liability) as “income”, and thereby avoiding a reporting of the TRUE level of national debt, which exludes Treasury Notes held by the Social Security Fund from most reports of “National Debt”, which Congress Reports Out (acts which would get a business leader criminally indicted. We have a right to expect honesty in disclosure from our government, and should press that right.

“as people try to gain some sense of having control through knowledge, they increase their fears and sense of vulnerability by seeking out and therefore EXAGGERATING the bad news?????!!!!!!! WHAT? my father and my best friend’s father got laid off 3 months ago and haven’t been able to find a job since then. I barely make the monthly rent, where as a couple of years ago i was taking vacations right about now! my sister is a mechanical engineer and she has babysitting as her side job! and i’m NOT EXAGGERATING!!! these are all facts.

“So the feeling of vulnerability trumps the statistics” are you kidding me??? so the whole US economy is messed up cause people are feeling vulnerable! That’s just stupid!

Everything Jim says is true. What is going on? I don’t understand. first 9/11, then the housing crisis, then bailing out wall street, then what FEMA coffins?
I’m tired of fearing my govt.

Where to begin?
First, the NBER (the agency that traccks recessions), does not define a recession as 2 – declines in GDP. From their website – “The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement on how the NBER’s Business Cycle Dating Committee chooses turning points in the Economy and its latest memo, dated 07/17/03.”
http://www.nber.org/cycles/cyclesmain.html
Secondly, the export growth is wiped out by increased inports, as our worsening trade deficit shows: http://www.mbginfosvcs.com/
We have lost privates sector jobs for the last 9 months. You wonder why people are nervous?
Consumer spending is in recession. So is business inverment. Real household and weekly, and hourly wages are declining. No recession? Yeah, right!

How in the world can the author argue we are not in a recession with a straight face? A strong economy requires GROWTH. Where, exactly, are you seeing this growth? Every sector in the country is in decline. The two areas that WERE propping up the economy for the past 10 years were the retail sector (financed by credit card spending) and the housing sector (financed on the belief prices would always rise). Well, those are gone thanks to a “correcting” economy.

Wake up. All the spin in the world can’t hide the fact that times are bad and getting worse.

The government has revised the cpi, gdp, gnp, and unemployment figures to the point where nobody can rely on the data. It’s been done by both Democratic and Republican administrations over decades. It’s classic Orwellian doublespeak. The government says everything is great and fixes the numbers to abate any societal upheavel regarding what’s really happening with our financial system. They create a system that has become so complex that even the experts have a problem figuring out what’s really happening in our economy. The other issue is we have an Ivy League class structure running our economy that has no real world work experience. They are taught by people who read books all day and create theories for text books but have no practical experience. How many professors or CEO’s have actually worked as a teller in a bank or sold a home loan and performed basic banking functions such as reconciliations? You have to learn to crawl before you can walk. Do you really think the professors in our universities have the necessary ground level experience to train our buiness leaders or direct the direction of our economy? They don’t and that’s exactly why we’re in this gigantic mess. Nobody used common sense beause they have been trained by poeple who have been stuck in an ivory tower for years and not been trained in the real world and how business operates. The banking system relied on automated underwriting systems and guidelines that were setup by computer models. That made a lot of sense. What happened to real people making real decisions. We let greed takeover common sense. Our country has turned into one of false profits and false promises and commercial paper that’s over valued and worthless. The problem is people aren’t forced to work their way up in business. They take a short cut called an MBA and get a an even bigger boost by getting degree from a prestigious university. So you ask, are we in a recession? Let see, the income growth for people ages 18 to 35 is negative. The savings rate is 0%. The average credit card debt is about $12,000. The average person in this country is doing great if they have no debt and can pay their bills. When young people should be getting married, having kids, and buying homes they are instead forced to work themselves to death just to make ends meet. I wonder why the cancer rate is up? Stress my friends! Stress will kill you. Young people in major cities aren’t getting married or having kids. They spend way too much time at work and have no hobbies and think they should live to work and not work to live. Are these American values or has corporate America found a way to create more productivity and more profits while not payng livable wages and simultaneously making people believe this is the right way? Just a get a credit card and don’t worry about anything. Things will get better. Right, that’s great advice. The people who have college degrees and have done everything right are just breaking even. This isn’t progress or growth my friends. What about the less fortunate who don’t have a degree or anyone to show them the way in these perilous times. They are doomed. I walked down the street last night in San Francisco and had ten pan handlers approach me in five minutes. We’ve always had pan handlers but never happened to that magnitude. I realized last night how bad things have become. Are we in a recession, you ask? We might just be in a depression. We are a bankrupt country who has borrowed and borrowed and would be in financial ruins if China decided to stop buying our Treasuries. The fact that we’ve got an admistration and a republican candidate for president who thinks that low to moderate income earners don’t deserve a tax break and the economic fundamentals are sound is only showing the insanity of themselves and the people who elected them and continue to vote for them. This is about America and working hard and getting rewarded. Instead we pay CEO’s millions of dollars for failing while squeezing the little guys and girls. I wonder how many CEO’s worry about that bank teller not being able to pay bills or eat three square meals? I wouldn’t sleep at night if my people weren’t paid a livable wage. The elite get paid while everybody else gets squeezed is what has happened and our politicians and CEO’s have done with a smile. Yes, it’s a recession stupid. Isn’t this great.

This is ridiculous, people! Who cares what we all think this should or could be called. It is time we all worked together (each of us – get it?!) to get ourselves out of this. It is easy to cast blame. How boring – and expected. Let’s take some initiative and personal responsibility. Our forefathers worked together and accomplished incredible things. Why can’t we? Really. It is time we all take responsibility as U.S. citizens and stop griping. No more political spins. Politicians are treating us like idiots. Do you know why? It is because we are. It’s time for all of us to grow up and unite.

Truly we’re in a psychological recession. Whether it’s true or not, people are losing money because of greedy people and the lack of oversight by government institutions. As of this writing, there should be millions of people screeming near the Capital telling Congress how disappointed the American people are in their performance.

LOL — If America’s banks going bankrupt and the Fed running out of money isn’t a recession then it’s a depression.

I quess that is what the writer meant to say we are not in a recession rather we are in a depression.

But you have remember this is the same media that claimed we won the war in Iraq 4 years ago.

The economy is an ever changing beast just the world of technology. Unfortunately, we’ve not been able to keep up with the financial changes and anticipate the outcome of corporate actions. One person comments that we’ve been in a recession since the 70’s. I would take it a step further and state that we never fully recovered from the depression of 1929. That with surge of government welfare programs that followed those and the financial up/downs since would indicate such. My opinion is that we are much closer to a depression at this stage than a recession or we should reclassify the scaling.

You’re right, it’s not a recession, it’s a depression. Except it’s a “selective” depression, where not everybody gets hurt, and therefore it is not universally believed to be what it is.

We “technically” aren’t in a recession because the goverments data is skewed.

When you look at the goverment’s employment numbers for example, they use that life/death model to account for jobs that “they think” were created.

Now for the past few months, they have kept adding housing construction jobs, and financial sectors jobs in large numbers. Yet, anyone with a brain would notice that for the past few months, those are two industries losing jobs.

Same thing goes for the GDP and the CPI. The goverment uses two inflation numbers to calculate each one.

Reminds me of that old adage about needing to keep on lying, once you lie once.

i’m sorry … but this whole “psychological recession” talk is pure bunk. we’re in a world-wide deepening recession and we’re headed toward a global depression.

We are not anywhere near the bottom!

Cities & Counties depend a great deal on property taxes.
What will happen when all the foreclosed homes don’t have people paying property tax on them?????

Even though property values go down , property taxes will probably go even higher for those that still DO own homes. As the cities & counties try to regain that property tax money they depend on.
This will again force more foreclosures , as people are already strapped & cannot afford higher property tax.
Unless something is done to head it off, City & County governments will be hit hard too! Schools, roads, city/county jobs…. they will all have to get major cuts.

My income is not falling. But it’s also not rising; and hasn’t since 2003. The only expense that has not risen in five years is my 30 year fixed mortgage. But my monthly payment goes up because property taxes and insurance have gone up. With the exception of a computer and an LCD television, everything I have bought this year is 10-20% more than 2003.

That’s why I feel we are in a recession.

“wer’re not in a recession it just feels like it”……..Right!! And the guy in the desert is not dying of thirst……. it just fells like it. What a joke. This is really the “pig and the lipsitck” thing.

Actually we have been in a long lasting recession since the late 70s and early 80s. The government, with its blank checkbook, the Federal Reserve, has printed trillions of dollars and pushed it into the monetary system. Real GDP if you measure it in real money (not the shadow government numbers), M3, TMS, gold, or other commodities, etc, has declined. Need a chart?

http://sigmaseek.blogspot.com/2008/09/real-gdp.html

The traditional measures of a recession are just not hitting the mark in this “recession.” Colvin hit the reasons for that in his comments but missed the point behind the facts. People are feeling pain. Prices are up, real income is down, job losses are on the rise. You can call it what you want, but it is an economic catastrophe for the average working class American. It was in 1992 as well. Bill Clinton was not making it up. People were in pain then and they are now. Colvin and the others like him are out of touch. He needs a reality check!!

We have transfered our wealth to oil countries, we have no money left . The world banks are trying to help us but there is little hope. Our government is helping transfer our manufacturing to China. Our nation spends more and sell less every day, we are in huge trouble.

We have been in a “recession” for months, it started with the housing collapse and continued with the oil spike, now we are in a “Depression.” It deserves a new name since all the investment groups and banks are falling like dominoes. Not to mention we are in a costly senseless war that has no end in sight and our two presidential candidates are both enormously dissapointing and do nothing to promote confidence here in the U.S. or abroad. Can we get some new candidates running for president, I know there has to be better qualified candidates than what I’m seeing on television. Whatever happened to Ross Perot? Can he run now, we need you. Can we find someone who is not full of B.S.(obama) or starting to suffer from parkinson’s dementia(McCain) in the white house?

Folks that keep shouting the mantra that this isn’t a recession because there hasn’t been two consecutive quarters of negative growth remind me of Kevin Bacon’s character in Animal House imploring everyone to remain calm as pandamonium reigns.

During midsummer we might not have been in a recession. However, I think we all can agree that we are sliding into one.

With the holidays around the corner, American people are going to tighten their belts and that will continue to add to the pain of the economy.

There appears to be no end in sight, not now. All the US people, companies, banks, etc just need to ride it out.

It is going to hurt all of us badly, but just like the flu you have to just ride through the pain.

I’d say that people in glass towers shouldn’t try to pass themselves off as all-knowing and all-seeing when it comes to what is or is not going on at street level. If you can’t find a job because your company has moved offshore; if you can’t feed your kids store-bought food because you need the money to buy gasoline to look for a now non-existing job; even if you have a college degree, but can’t even buy a job because there are people in India doing your kind of work at 3 cents a day…then it’s a recession.

If the economy is growing at a rate lower than inflation, it is hard for me to consider that growth at all.

Let me see…
The Fed goes in hock just shy of one trillion dollars to shore up the financial institutions – no recession.

PIMCO’s Bill Gross’ economic outlook for September 2008 has a chart indicating the worse loss of capital since the great depression – no recession.

Many of the worlds markets are also collapsing – no recession.

There is no bottom yet in housing, job loss, stock market down turn. Geoff Colvin still has a job – no recession.

Lending rates will keep going up as liquidity shrinks, food prices will keep going up because of global population demographics and higher oil prices, income and salaries will fall as there is a glut of employees on the street – so obviously we are in a recession and will continue ot be in one for a while.
the real question is how do we solve the credit crisis so we can get out of this recession one day? we will need help from China and Japan and Middle east to bring US debt down, sell some of our best companies and then maybe we will rise again.

This firefighting business isn’t working, what is needed is a solution similar to the Resolution Trust Corp in the 80’s. I’m not defending mgmt but if all these venerable companies are on the brink, doesn’t that indicate a systemic problem? Keynes said that when situations like this happens, the government has to reverse the vicious cycle. The only way to do that is to take the crappy mortgages and insurance policies off the hands of these companies, not let it destroy them – cure the cancer. A regular business would file for Chapter 11 but these are not regular businesses. Shareholders should suffer some pain but not be completely wiped out as that also creates fear uncertainty and doubt ie which company is next? Again, there is a greater moral hazard in who’s next than in bail outs.

The FED already paid USD 900 billion (900.000.000.000) to keep everything going!!!

AIG 85 billion
Fannie and Freddie 200 billion
(Re)financing home owners 300 billion
Morgan Chase 116 billion
Liquidity into the financial markets 200 billion

Why don´t you hear this kind of information on CNN, Fortune or CNBC????

Who is going to pay for all this????

Where is this money coming from????

The world isn´t stupid you just can´t keep making free dollars! The whole financial system will come to an end when China and The Middle East stop buying these wortless debt papers.

Have you ever considered that it´s pay back time for Americans living to large to long????

Oh yeah, one more thing. Do you really think the gov’t is gonna put out recession numbers right before a presidential election? Seriously, please think before you speak. Why do you think fuel prices go down right before elections EVERY TIME. If you don’t believe me, go back and look.

Yes were in a recession and to make it worse media is helping distort the facts…ie my last post was removed probably cause i quoted some real figures about the payouts to the ceo’s who are making a bundle while crippling their companies. why we the american people suffer at every turn

What do I think? I think if you don’t think we are in a recession, you are a sheep just like all these others. Try plugging in the real inflation numbers, instead of the low one’s the government has thrown out there. why would they ever put out wrong numbers? Really? Do you have to ask that? Try, because we are not only in a recession, but we are on the brink of a depression. If it weren’t for these bailouts, we would be sitting in a depression as we speak. Now, don’t think I’m all rosey about the bailouts, because I’m not. try, it’s their faults in the beginning, that got us here. With the fed lowering the rates to 1%, duh, banks said, hmmm, we can get a lot off of loans. Thus they rushed loans out, to package them later. They offered the sheep, or the dumb people, to buy houses they couldn’t afford. Then of course, now we bail out the same one’s who screwed us in the beginning, and give the ousted CEO’s their billions. Gotta love it. Along with GWButtheads war that made our fuel prices skyrocket and our deficit go up even more. What do I think. I think the bank of China is about to call and try to collect, and there isn’t anything to collect. The rise and fall of all great nations.

We are in a recession and have been for some time. The figures Colvin cites for real GDP growth are distorted by the flawed way the federal Bureau of Economic Analysis adjusts nominal GDP for inflation.

If the total amount of goods & services produced was exactly the same from one quarter to the next, GDP would still grow because inflation causes the same things to cost more. In reporting GDP, the BEA adjusts inflation out of nominal GDP. The result is called “real GDP” and the adjustment factor is the “GDP deflator”.

The GDP deflator is currently calculated with two assumptions that understate inflation. First, the substitution effect assumes people switch from higher to lower cost goods when prices rise (e.g. we buy chicken when beef gets expensive.) Second, the hedonic effect assumes that as certain goods (e.g. digital cameras) become better & better, so price comparisons between time periods are misleading.

BEA adjusts for substitution by shifting the makeup of the basket of goods & services towards lower-cost items as inflation rises. This lowers calculated inflation. And they adjust inflation downward to account for the hidden price reduction from “hedonic improvement”.

Both practices understate inflation. Understating the inflation estimate results in a smaller adjustment to GDP, which causes real GDP to be overstated. In effect, real GDP looks larger because you are assuming that relatively less of GDP increase is due to inflation, and more to actual growth.

After what has happened – the bailing out of AIG, Fannie Mae and Freddie Mac; the collapse of Lehman Brothers, Bear Sterns, and Country Wide; the reports of Airlines going bust over high oil prices and cutting back on employment in the financial sectors, airline industries and automobile industries; the increase in delinquencies and foreclosures in mortgages and the forever decreasing in property values; Washington Mutual being on the block for sale; the national debt is piling up at ever increasing pace topping over 9.6 trillion US$ and the list can go on and on — and this psychologist can say that it’s all in the mind??? Either the psychologist is totally blind orelse it must be in her mind that thing’s are still as rosy as ever before. She needs to open her eyes to look at hard cold facts of what’s happening in the world nowadays. There is clearly a limitation on how these GDP figures can accurately reflect the true condition of the economy. As far as I’m concerned, we ARE in a deep recession and things goes the way it is, the whole world can fell into a Depression. Just imagine if Iran successfully develop their nuclear arsenal (it’s a matter of time because it’s only a technological matter) and a war broke out and they stop all oil shipments from that gulf region what would happen to oil prices then? Depression? It’s only a tip of the scale.

I think that you miss one very important point. Aproximinly 3.4 million (That’s less than 1% of the American population) make almost 50% of the money in this country. So while that minority is getting richer, the rest of us “poor folk”(99% of America) are getting poorer and for us it is a recession.

After the “jobless recovery” of the early Bush II years, we now have a”recessionless panic” on Wall Street, caused mainly by BUSh II’s reckless deregulation of the markets. The head of the SEC doesn’t believe in regulation! The fox is guarding the chicken coop, and the inmates are in charge of the asylum. But, no cause for worry, folks, the free market will take care of everything. EXCEPT YOU AND ME! We, my friends, are on our own – without a paddle, if you take my meaning. Oh, and McCain (”the Deregulator”) is going to make it all well. Yeah, right!

If this isn’t a recession, it’ll do until a real one comes along. The nation is in a panic over the housing and stock market meltdown.
Unemployment up, jobs down, banks going belly up, gas and food prices going out of sight, the dollar down; what have I missed?
This election will be a landslide, but in what direction?

There is no such thing as terrorists; we created an enemy to go mine oil money in the middle east. Somebody is getting paid as we toss US troops away.

We live in a scary time. This is going to be a great divide in our country: the have and the have nots. You are likely to never recover if you just went into foreclosure or have bad credit and no savings. Hate to be all doom and gloom, but these numbers are all cooked folks. How can you possibly believe anything that is printed in the media? Just a matter of time before they come get our guns too.

Something is clearly wrong with the measures of the economy. I can’t think of a single major company out there which isn’t in the middle of some kind of a restructuring, downsizing, or at least a “hunkering down” due to decreasing profits. Yes, where I work, we are all hunkered down, waiting for the inevitible third layoff announcement in the past two years, and yes, the value of my benefits package is way down from what it was back in the “good old days.”

Somehow, I just have to believe that the economic statistics aren’t really measuring the reality of the economic situation here in the USA. The numbers are growing, but most “regular folks” are hurting, and some are hurting big time. Is it illegal immigration which causes the overall numbers to grow while “regular folks” see their own personal economies slide into recession?

Certainly the housing market is in the toilet, and for at least the past six decades, the housing market has driven the economy more than any other single factor. Many indicators of housing activity are hitting multi-decade low values. With the key position housing holds within the overall economy, why don’t the overall numbers reflect the housing collapse?

Could it be that somebody high up in the Bush administration has ordered that the numbers achieve certain objectives when announced regardless of reality?

I don’t know WHAT is going on, but I sure can smell a stinker of an economy, and it stinks worse now than it has at any time in my six decades alive on this planet!

IMHO, the biggest problem is that the talking heads on the TV news are acting as if we’re going through something worse than the Great Depression and are scaring the crap out of the public in order to change the outcome of the fall elections. They did the same thing in 1992 and practically immediately after Clinton was elected, the tone changed and everything was just peachy. When the dot-com crash began in 2000, it was largely ignored until Bush won. Then it became big news.

Wow! Not in a recession. Technically, yes we are. A recession is defined (by the NBER) as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Ladies and Gentlemen… we are there, and have been there for several months now. The banks are failing, thanks to insidious fools (creditors, appraisers, bankers, etc…) who make ridiculous decisions and greedy ones at that.

I am going to be very blunt, we are headed for an financial crisis as a country… and let me be clear, it will hurt every working American. And it is coming sooner than you think. This is only the beginning.

The only advise I have for us all, is to have a redundancy plan. Stop spending/wasting your money. Stop buying with credit… CREDIT is what is killing this country! That, and the housing crisis (those fools!)

And while we are in fact a very rich (financially) country, all these hundreds of billions of dollars we are throwing away in foolish attempts to save greedy companies, and a greedy Wall Street (where they need billions pumped into their system by our frivolous FED so that it does not crash again as it did decades ago)… well, it’s quite frankly pathetic and disgusting… to know that our richness will become worthless… guaranteed.

so, if a housing crash and $4 gas and a global stock market bear market won’t cause a recession, what would have to happen for that to be the case? Its basically impossible to have a recession (officially anyway).

Who made the MBAs of Wall Street the brokers of economic soothsaying? People, go with your gut! Isn’t it obvious nobody knows what they’re doing, and the Fed is asleep at the switch, or drunk maybe.

Recession… or not? Are you kidding yourself???

Oh yeah, this is worse than a recession. Not because it can’t get better, rather if the American economy get a few more big hits, the results could be a Global Depression. A real possibility in world that what has gravitated towards a Global economy.

The cold reality is the cops are not going to come help you. You have to save your own butt in a pinch.

If a major disaster happens, tough. Your 401(k) just got toasted? Tough.

You have to take responsibility for yourself and your family.

I am not trying to be disrespectful to anyone’s pain and suffering, but I think my family and I are better off then we were 8 years ago. My husband is in the military- 24 years- we have 7 children, 3 in college… but financially we are doing great. I do not carry a balance on the cc- never have. If I can’t pay for it, I usually don’t buy it. 26 years of personal fiscal responsibility have left me breathing easier than most right now. We are not wealthy, but we are a one income family and we are able to help with college, save for the future and still enjoy our weekends!

Ok, so we’re in a recession… we all seem in “agreement” here.

How do you climb out?

Make yourself a BETTER PERSON.
Right now. Are you a better person than you were this morning? If so, I congratulate you for your contribution to making both your world and mine a little nicer.

Better people make a better world. We can play financial games all we want, but the fact is, no matter how many portfolios you have, it is likely you will never rock on guitar like I can.

So, what is it you do? How can you do it better? How can you help others to do it better? How can you make this world a better place?

If we all kept asking this question, day in and day out, for breakfast, lunch and dinner, and never ever let up – we will have a better world, my friends… and so will everyone else.

I can promise you one thing… no matter what else happens, I will be a LOT better at what I do by this time next year…

Will you?

James Musser
Peaceland Music
http://www.peacelandmusic.com

clearly out of touch. too many people are inverted and will be losing this homes. I live in the 46th highest highest income town in the us. my area is fairly well off. my zip code currently has 1200 foreclosures in progress. most of the are ones that need refinancing and will not be able to get it due to the credit crunch. people will lose homes. things will spiral. this will be the toughest winter i have seen in my 41 years.
unfortunately the only way out is going to be strong arm regulation tactics by the government. not bailouts, just that those investment vehicles with those awesome returns are going to have to get to reality. refi those people to 30 year fixed.investors sorry, you are not going to get 10% on them. more like 6%. somehow the cyle has to be broken.

I Recently Found An Old Paycheck From 9 Years Ago. I Was In Shock To See That My Current Bi-weekly Check Is Only $90 More After Taxes & Benefits Are Deducted From It. So I Guess An Average Of $10 Extra Per Year, On A Bi-weekly Basis, Is Enough To Offset The Increased Cost Of Utilities, Gasoline, Insurance, Food, And Housing. Well You Must Be Right, We Not In A Recession Anymore, It Now Better Represents Our Current State Of Mind – Depression !

Economically speaking, we are NOT in a recession. Once the ‘big guys’ used the word, however, people panicked. Many people just don’t understand what recession actually means. Mentally speaking, though, we are in a recession, because people believe us to be. People who already understand the truth and stable reality of the situation should be explaining and teaching it to those who don’t.

No, we are definetely not in a recession.

Talk to anyone who was around during the 1930’s and they will tell you that we are clearly seeing some indicators of the “Great Depression”!

Banks failing, high unemployment rates, inflation out of control, stagnet growth, home foreclosures, established companies going out of businesses over night, etc, etc….

Should we continue to list the reasons why we are not in a recession?

Wake up America, hard times are here to stay for a while, the recovery will prove to be long and it will claim many more financial losses before it gets better.

Seems like the good ol’ days are over.

Can I ever dream to work for a company all my life and receive a pension plan like my Grandfather did?

Can I trust my corporate bosses to make the ethical choices that keep American jobs?

Can government be trusted to catch the bad guys? The guys that make the headlines in handcuffs or golden parachutes as their risky investments fail us?

Government doesn’t have to enforce anything. It can do nothing. It can “bail out” wall street and refuse to “hand-out” to people who truly suffer. In the end justice catches up to the system, and it fails.

Calling this a mental recession is not only inappropriate but incorrect. It is a loss of true value in the American spirit which has been sold out like Anheuser Busch.

Hey! Heres a thought… How about if our government actually pays alittle attention to what minimum wage is, and increase it by a few bucks. Thats one step. Also, I thought by reading the column, I would gain some insight from a neutral stand point. But, apparently it was more important for the writer to use the last two paragraphs to promote their candidate. Pretty disappointing. But, since he did… Let me say… EVERYTIME our economy starts to gain legs and our deficit starts to dwindle… Guess which party steps in office? It’s not a hard question. Just check the history of your savings accounts, and then timeline it with the president at the time. Talk about a fluctuating graph! This is priceless: What’s so insidious about it, she says, is that “as people try to gain some sense of having control through knowledge, they increase their fears and sense of vulnerability by seeking out and therefore exaggerating the bad news. In this way the psychological recession is self-fulfilling.” So… You are saying that by educating ourselves, WE ARE CREATING A SELF-FULFILLING PAIN!? Speachless!!! I can bet what color tie you wear. Just sad…..

I have three questions.
1. Why should I a taxpayer be forced to pay the wages of a men who earn $500 to a $100 an hour. That is what this bailout means and they pay no penalty for the incompetents they have shown.
2. If the Executives and managers of these company’s still receive their multimillion dollar salary’s and perks after driving these company’s into the ground.
3. And what is wrong with raising the taxes of these people and lowering the taxea of the middle class.

Using Enron accounting standards for CPI, GDP and all other government stats, the numbers show we’re not in a recession.
For those of us more grounded in reality we are nearing a depression 1929 style.

Recession? Dunno, but what is absolutely true is that America has become the land of banking and fast food, WE DON’T MAKE ANYTHING HERE ANYMORE. With the dollar down as far as it is – we should be exporting like crazy. (we are exporting, but what? oh, lumber, grain, rocks, scrap metal – the biggest problem with our exports is that they weigh too much for the containers – so we are out of containers since we cannot fill them all the way with heavy raw materials!).

Def’n of a third world country: export raw materials, import finished goods.

Our candidates need to focus on job creation through business creation. I’m not sure how raising taxes on business is going to help that.

What happened to our industry? steel – gone overseas, driven out by high labor costs. automotive – lack of innovation, cannot compete with toyota and honda. High tech service – gone overseas – driven out by high labor costs. Heavy industry – overseas. HiTech – overseas. hmmmm – I’m seeing a pattern here.

Forget recession. Its been a while this country is in one. Now, its time we call it a DEPRESSION. Who are we kidding here.

WE’VE BEEN IN RECESSION SICNE 2000! IT NEVER ENDED!

Jobs cut, wages cut, costs increase, debt goes crazy as does the deficit, and the economy is doing OK?

Not on Main Street!

And Wall Street’s games screwed over Main Street, and now the cows are coming home, and this is the ugly result.

Support your local small businesses, who need all the support they can get, and not the corporatist scum.

The author of this article does not appear to be economically savy. Just a couple of points. First, the two QTR rule of thumb for conteraction is just that, a rule of thumb. It is not a definition and there are many other meaures that indiciate a recession (other indicators included from the same folks who gate us the 2 QTR rule of thumb by the way)

Second the author makes the assertion that “most people’s incomes aren’t falling”. What fact backs this assertion? Compare income growth to inflation and buying power is indeed falling and to be clear, you value money by what it can buy, not how much you have of it.

Third, all economics is local. A recession, depression, or a great economy is a very local issue. For me, the economy is the strongest it has ever been. All economic indicators at my house are up. I am lucky. For many other the trends are down.

The broader ecnomy is great for wonks but the real economy for most people is household economics.

It is my estimate the author wants to make politcal points vice economic points and he should know better than to talk about things he clearly does not understand.

The only reason we are not “technically” in a recession already is China. In the last 8 months or so we have become enabled by China’s loans. The government keeps sinking money into the economy to no avail. The recession has been coming for years now. Lay-offs, stock market dives, foreclosures and bankruptcies are all obvious signs. We need to wake up and change our spending habits. We need to quit the buy now pay later habits we’ve developed. Get out of denial so we can come up with a plan to strengthen our economic status instead putting more bandaids on it!

“The rewards of economic growth are going disproportionately to those with the best educations” – translation:
the rich/powerful are getting more and the rest of us are getting less – par for the course America!

I have a simple question that no one seems to have asked/answered. Why is the thought that we are in recession, and that there will be a recovery. My thought is that the overheated period is over and we are back in normal period. It seems to be clear that the housing market overheated and its generally accepted that transactions were at a pace that could never be maintained long term, maybe the answer is this normal and there isn’t a big recovery coming. Thoughts ?

Your technical definition of a recession makes me sick. 6.61% unemployment? No big deal? Here in Michigan we have been running at OVER 8%! Flint Michigan is at OVER 14%! Of course Washington says it’s all in our minds. Hey, they got their “golden” retirement plans, their fun and games with oil company friends. I am fed up with BOTH the Republicans AND Democrates running this country. They are ALL in their own little worlds of the rich and famous.

Fed up in Detroit.

Suuuuuuuuuuuuuuuure we’re not in a recession. Maybe, in the very strictest business sense, perhaps. But when I’m paying $4 a gallon for gasoline (give or take, a 200% increase in paying rate over the last 2 years), paying almost double for the same groceries, and my pay hasn’t gone up (or down admittedly)- I don’t have to be Keynes to know that while the ones who are big-time players with $500 million or more in personal assets and private fortunes may not be in a recession…

But the rest of us damn sure are. This article is such a lip-service sham. The emperor has no clothes on, and I’m calling it.

John kurish, if you think that this credit crunch is primarily about expectations changing YOU need to learn economics. It’s a R E A L I T Y check. Much of the growth we experienced with the housing bubble was built on escalating house values resulting from faulty underwriting, bad credit ratings standards and the securitization of risky mortgages. With everyone’s balance sheet weaker and bad home loans defaulting at an accelerating rate real losses are being incurred. This has to impact the consumer. They can no longer tap into their home equity, they can not buy and sell thier homes easily(not to mention build new ones) which is a major source of economic activty. Banks have to tighten their standards because they do have not capital on which to leverage. Sure things will improve over time but the expectations are a result of reality.

You cannot compare unemployment today 6.1% with unemployment in 1990 7.8%. The issue is how quick the jobs were lost and the fact that the workforce is much larger than in 1990, so 6.1% of today’s workforce is a much larger figure than 7.8% of 1990’s workforce. Yes this technically is not a recession and the economy does need to correcdt itself after corpoarte america got fat and greedy, I just wish the little man didn’t have to pay for all of it!

The core messsage of the article is great. Reality isn’t important, perception is The part that is missing, or at least silent, is perhaps the definition of a recession should be changed or at least updated. Way back when the classic 2 quarters of negative growth was adopted it was flawed in that it didn’t recogonize that zero growth year to year is actually negative growth in a growing globe economy. As the article touches on just because a locally based corporation is growing, but that growth is due to out of the country sales and revenue does not mean that the in country economy is growing. Perhaps more importantly is the expectations of growth; people now think that the comparitively low unemployment rate is high because the economic boom time accompanied by ultralow unemployment created the expectation that is normal and expected. The true problem with the unemployment rate is that the jobs that are being lost of in sectors that are changing (e.g. the automotive sector). Those jobs are gone and they are not coming back. The people that worked in relatively high paying blue-collar jobs are facing starting over at the bottom of the ladder in a new sector, and they are facing that prospect with an upsidedown mortgage in locations without new job opportunities and with high debt both present and future (e.g. College for the children etc). Those problems are not going away anytime soon. The analysts can crunch numbers in any of hundreds of ways and spin the message in a dozen directions and will not change the underlying fact that the economy is correcting itself, just like a hang over after a late night drinking. The problem is that real people are caught up in the problem, losing their hard fought retirement saving, their homes, their jobs, etc while the people who got rich during the boom by writing the mortgages that should have the hang over don’t

Our economy has been redefined as global. It’s time they redefined recession.

No recession? You must be joking. I’m less worried about a recession than our entering a depression.

The GDP stats are cooked and have been since the Clinton administration. So is the CPI, so the combined effect shows a small “growth,” but we actually have a large drop in true economic activity, even as the population increases. Just look in the stores– they are emptying out.

Speaking of stores, have you tried to buy anything lately? Besides a small drop in gas prices recently (probably temporary) just about everything is lots more expensive.

Unemployment is much higher than the phony statistics, which ignore the underemployed, people whose unemployment benefits have run out or who have given up on the labor market, self-emplyed people who have no or greatly reduced sales, etc.

To make matters worse, the level of debt and impending foreclosures are creating a finnacial tsunami that will wash away great portions of our economy. the implosion of tax revenues that has already begun will force a contraction of government (with resulting reduction in employment, reduction in services and loss of economic multiplier effect) that will create cries for still more deficit finnacing and higher taxes– counterproductive.

No recession, huh? See ya on the bread lines next year.

I would think at least we are in the majority that the Government and other GSE’s love to play fiddle with the numbers. Recent case in point is Fannie and Freddie’s assumption that their capital reserves consisted of write-downs from future tax carry forwards of 20 and 18 billion respectively. How can anyone assume that this does not constitute “shadow” revenue. To the simple lay person their assumption would be simular to us saying we have 100k in our checking accounts based on our future earning potential. My question is how do audit and accounting firms actually certify these results? Have we not learned from the original tenets of what Sarbannes Oxley was trying to achieve? Did Enron and Worldcom teach us anything?

More to the point, as we move out of this mess, which we eventually will, the need for transparency on a Gov’t and Corporate level is more tantamount to having us good citizens have a restored faith in “the system”. Walk away from the idea that it was a democratic or republican ideology that got us into this circumstance, and understand as others have expressed here today that the numbers can be molded to fit any need. Let’s go to a deeper level of granularity, does the explosive growth of GDP in Q2 08 reflect resources used to finance a war? It becomes troublesome to realize what a great country like our own is using to classify as exports (great to see we can still manufacture airplanes).

Finally, pertaining to some of the earlier hype surrounding the media’s play in all of this, I would find Mr. Colvin’s opaque reliance on the numbers to play in accordance with what the government wants us to believe, but I certainly respect good old fashion journalism to ferret out truth from fiction. I for one haven’t lost faith in the forth estate.

Sometimes you just have to do the food shopping yourself to see how much the bill comes to.

I wish it was only a recession.
There has never been a time in our recent history when banks had no money to lend, (except Great Depression?).
Late ’80s, early 90s: unemployment shot up, homes went into foreclosure, however, banks had plenty of money to lend and by 93-94 home prices up.
Market crash of ‘87, nothing like this.
Banks had plenty of money. Dot com bust, so? day traders lost a ton of money, but banks had plenty to lend.
Homeowners had equity lines or they were obtainable. Nothing now,no cash no credit no positive wealth affect.Why didn’t the Fed ease? remember Iraq and the billions we spend monthly, oil prices? just wait.
In California tens of thousands of Real Estate agents,(factual) are not making and spending the big bucks. Yes most of them had no idea what day it was, but they made big numbers. Construction? suppliers, autos? suppliers?
At least Paulson,and Fed chairman, NY Reserve Bank Pres. know what’s on the horizon. You are in a sad state of denial along with many others.
That’s right…”prosperity is just around the corner”.

Yes we are in a recession, not by definition but the problem is what many have said here…the definition and the government will only include certain numbers and stats when discussin the GDP or cost of living ect. There are many factors that the average person has to deal with daily that are not inlcuded in these numbers. Fuel and Consumables are a mass drain on the average Joe on the street.
Get one thing straight, the govt will tell us what they think we need to hear and not what really is. and for the person who posted this quote….
“Its funny how “economy” is such a buzzword now when so few actually have knowledge of how economics work. Take some classes before you criticize someones assesment of the economy”
Economy is a buzzword for the rich and the media, which by the way control most of the countries money, so these “classes” you speak only support what the govt thinks we need to hear. You might want to revisit your classes and realize the real world is vastly different from the classroom world!
Anyway you slice it, we are in a recession and could be getting worse if continue to bail out the rich and leave the average person to take the fall.
Great example is Merril Lynch, B of A transaction, does anyone realize that 20 months ago Mother Merrill paid Stan O’neal 160 million to retire after he lead the company into a spiral of death, then Paid John Thain 100+ million to guide the company to a lowball buyout of 29 dollars a share….oh yeah about 44% of merrill’s 50k + employees will be laid off over the next 18-24 months…how did this help anyone but the rich???
Maybe someone should consider re-defining a recession, depression, slowdown that might consider the entire nations needs and not just the rich and big business.
Keep your head above water and swim, who knows where we will end up!!

Panic–Bologna!
Major financial Corp. failing, Home forclosers,largest US debt in history,
a war we can not afford, (including lost of life). Its not a question of recession but are we headed towards a
depression?

Not a recession??? Nope… How about Depression???

YES, Fellow Americans! We are definately in a RECESSION! But where and who is feeling it I believe is geographical. Trust this small-town girl when I say its geographical. Bigger towns and cities aren’t exactly feeling the squeeze as much as smaller towns. We drive farther, have no taxi or bus services, maybe 1 or 2 small grocery stores, no manufacturing companies or industries, crops are clouded with drought. Gas-stations can’t afford the price-per-barrell, And only extremely Large cities will receive supplies. People here are trying their best to conserve, but that doesn’t mean diddley-squat when you still can’t afford to pay electric and gas bills. Our milk is close to $5.00 a gallon. It’s a recession and a recession by anyother name is a Depression. But the difference in the two in laymen terms is that Wall Street has not yet locked the doors. Washington gives us the public numbers that satisfy Washington and sugar coat the predictions of so-called experts. What have we as a rational society learned thus far- that we should not believe all those so-called predictions because what I’ve been reading this last week puts all the expertsnumbers far off the beaten path of the true numbers. There will be a rise and fall of that great nation, and all the merchants across the way will cry out for her. THE END.

Resouces on this planet are limited, finite. The population of the planet continues to grow at three people per second.

China has ascended into the world’s dominant power and owns the US debt.

They are the ones “rescuing” these failing financial institutions, as they are the ones financing the war in Iraq.

You can call it whatever you like. But the United States government and it’s primary financial institutions are broke and getting broker by the second.

Breed, consume, get into debt. Now the party is over and China is collecting on the bill.

We are not in a recession because the term is defined by BACKWARD LOOKING at PAST quarterly GDP.

We are, we just haven’t noticed yet because we’re LOOKING BACKWARD.

In this new world economy the definition of recession being used as the metric in this discussion is obsolete.
According to that old metric, we may not “technically” be in a recession but if we don’t watch out we’ll certainly be in a Depression before anyone acknowledges the severity of this situation. Just like a person trying to sell his favorite guitar on Ebay, there’s a big disparity between the opinion of the seller and that of the buyers out there – the seller wants top dollar for his guitar, and he doesn’t want to believe that his guitar is merely one of thousands for sale in a busy and competitive market. Sellers are in denial of exactly how badly their property has been devalued – and I think Market Analysts and economists (especially those on the government tab) are in denial of how bad the problem really is. It is true that what people believe will eventually become real, but it is also true that what people deny cannot make things become less real.

Finally an article that makes sense…

Home builders bankrupt, car dealers going out of business, commercial real estate down 40%, unemployment up, over $500 billion spent bailing banks out of their bad loans, yet, no recession? Obviously, the definition of “recession” needs to be adjusted to the reality, not vice versa.

Again, not so sure I’ll add any insight here that hasn’t already been said eloquently….but I would like to add my voice the discussion. In my opinion basing a recession on some technical definition has no bearing on how the current economic environment is being felt at the local level.

Sure GDP is growing, sure exports are still on a good trajectory, but our neighbors are losing their homes, jobs and financial security over the last several months starting with the real estate melt down, bank failures all the way to this week’s stock market melt down.

We can define this all you want, but the real test is how are we faring as American citizens on the street?

We’re unsure of our jobs, in debt to our necks and very unsure of the future for our families.

I started a business a little over one year ago. I’m looking at closing it because of the very soft economic climate we’ve encountered. I’m not optimistic at this point. I’m about to dip into a 401(k) that has lost 45% of it’s value over the last 12 months. Good grief…

So postulate all you want, we’re in a very challenging economic environment, defined as a recession or not!

This is a recession, but things will get much worse. In two years, we will recall this as good times.

As far as the growth of the economy not meeting the definition of the recession, here is what I think. The trick is in the definition “growth”. If a supermarket made more dollars – that must be reported as “growth”, right? But if they sold the same amount of potatoes, but at a higher price, this is not really a growth. It is inflation. If the same condo is sold twice in one month, each time at a profit – is this “growth”? I bet you that the huge numbers of Leahman Bros and other Enrons have been counted as GDP and contributed to “growth”. That is not growth, that is BS.

The party is over – for a long time, until our workforce becomes competitive again. Our education system is not better than in the rest of the world, the workforce is largely unskilled. The salespeople in financial sector were good in selling our debt abroad or to each other, but no more. Manufacturing sector is in shambles. everything is outsourced. Scientists, engineers, programmers and even doctors are imported. What do we have in our economy? Retiring baby-boomers and the sick health care system, that is full of parasites in the insurance companies. High school dropouts, full prisons and the recent Miss South Carolina for the next VP.
We also have a war, a new arms race on our hands, and a lot of religious nuts and hockey moms.

Things will get better after the US invests in education, technology, infrastructure and gets out of all the wars and arms races. In the meantime – tighten your belts.

Geoff, you really are out of touch.

Most of Main St America hasn’t seen a significant raise in over a decade, while the real costs of living have been increasing steadily. Mortgages and Health Care alone have eaten a larger and larger portion of my paycheck.

End result? I’m a well educated, middle class worker who is flat out poorer than I was a decade ago. My paycheck is a bit larger, but the fixed costs of living have increased far more over the same period, and my expendable income has plummeted as a result. It seems to be the same across the country.

Square THAT with CEO’s walking away with hundreds of millions as Wall Street collapses.

Finally, take your pop psychology lesson and stuff it. My stress comes from the simple arithmetic of balancing my finances and seeing where the money goes today vs 1998 – I don’t need talking heads to tell me how to feel about that!

I’ll tell you to prepare for winter. Prepare for a downturn both in economics and confidence. We’re headed for a depression that will make the 1929 depression small. Energy is the key to this economic failure. Energy in any formula for economics has got to stay cheap. And two reasons why energy is not cheap; the constant pounding of hurricanes on the oil infrastructure and the Iraq War. Now if you want to know how to fix these things then call me. I have some ideas.

I agree that emotionally we are in a “recession”. But as a person who works in the financial business (and not a fat cat on Wall Street) I can say that a lot of the problem that we are facing is the consumer debt that the average person has. When someone walks in for a loan and they fill out the loan application and their income is far less than what they owe monthly already ie. mortgage pmt, car payment(s), credit cards with balances in excess of $10,000.00, a boat loan, a 4-wheeler loan and any other loan to satisfy the “instant gratification” society we have and they want more to keep up with the Jones’, then we have a problem.

The average American needs to save money. The rule of thumb is to save 10% of your income. If you can’t save that, then look at your budget and see what you can do without to survive (like going out to eat, getting your nails done, getting a tan and etc.) If you get a raise, determine how much of it you can save for bad times such as these. America lives way out of its means and we need to get back to the basics.

If you don’t have the money saved, don’t buy the fluff stuff on credit!

Clearly, the definition of “recession” is out of touch with the factors that most affect the quality of life for average Americans.
It is such a phony tactic to try and hide behind the idea that this economy doesn’t meet some technical definition of a recession. So, is the idea, then, that if we are not in a technical recession that we ought not worry or have concern?
This particular situation is extremely serious. It cannot be wished away by prooving that our economic condition does not meet some specific definition regarding growth.
Okay, so perhaps it is not a technical recession.
Still, our banking system is weak and in need of some serious regulatory overhaul to ensure the proper curbing of capitalist excess. Millions of families are in homes that they fear they’ll have to leave because they cannot afford the payments. Whether you believe it was their poor judgement that got them there or not, it exists and is a pressing issue. Their neighbors’ home values are plummeting because of how cheaply the foreclosed houses are going for, plus the lack of demand.
Prices are rising, whether the CPI shows it or not. It is simply true that it costs more to go to the grocery store for your family than it did a few years ago. It costs more to fill up your gas tank to drive to work. Everything is more expensive, everywhere you go.
And, as people get a load of the fact that they can no longer borrow their way out of financial tight-spots, they are eliminating non-necessity items. There are millions of people employed in industries that have built their business on laoning money to people… the auto industry, to name one. Car dealerships’ numbers are down huge this summer and this month isn’t looking any better. The same is true of other industries that rely on people borrowing to pay for their purchase.
Companies all across this country have been announcing lay-offs for the past couple of years and they are still increasing. The author cites the unemployment figures, but those are hardly an accurate reflection of people who are unable to find employment. Once a person has received the maximum in benefits, they are no longer counted on the list. That doesn’t mean they have found a job. And, for the many people who do find jobs after being on unemployment, they are finding that they must take lesser jobs than they are qualififed for. Folks are taking part-time jobs, or a couple of part-time jobs to make ends meet. They are taking jobs as greeters at Wal-Mart for minimal pay when they used to be professionals, making decent salaries.
So, the author can twist words to make it seem as though the people of this country are creating a psychological recession. That is ridiculous.

Not sure I can add anything that hasn’t already been said eloquently by others except to add my voice to the chorus expressing my disblief that the question is evening being asked. Looking at the responses here (mainly from from well educated and knowledgable people no less), its pretty clear the overall opinion supports the notion that we are in a recession. Maybe the question should be rephrased: “Do you think we are still in an recession or do you think have we entered a depression”?

From my personal Blog. Think it says it all…

It’s a different time than what was 1932… So, you’ll never hear a single word (from an official) about “depression”…in fact, they’s smart rich folk in Manhattan are still not even sure we’s in a “recession”.

Let me clear something up for you folks on Wall Street. Yup. It’s a recession.

What’s even worse…You supposedly smart people that bought into an overheated and bloated housing market…

And what is even worst… you’re still thinking you can get away with not learning a single lesson from history.

I think lots of you are missing the point of his article. At the start he points out that people are hurting. Our overall ability to produce is strong in the face of all these negative factors. Were only feeling the ebb (and flow( of money in the faced paced economy of the tech world. Its not going to get better soon… but it WILL get better! Has anyone taken economics 101? We have a strong base compared to the world.

I hate the idea that McCain or Obama gets to take credit for the impending upturn in a few years. The worldwide economy is a behemoth that will not be lassoed by a US president. So when those guys say they have a plan to fix the economy, don’t give them blame or credit them for what happens next.

Its funny how “economy” is such a buzzword now when so few actually have knowledge of how economics work. Take some classes before you criticize someones assesment of the economy. I think one of the points he made too generally is the large consideration that is paid to “expectation” as an economic variable. Do you expect food and gas prices to double this year? If you share that belief with enough people than the price will certainly double.

How do you think oil goes from 75 to 150 and back down to 95 in a matter of months? Expectations change!

Here’s the problem . . .

Both politics AND recessions are LOCAL.

They are experienced individually.

If I lost my job, I’m experiencing a recession. “Growth” – the holy grail of many in the financial sector – just doesn’t hold much water for folks that are too busy feeling their own pain to notice who is or is not feeling it for them.

And REAL INCOMES HAVE NOT RISEN IN THE PAST EIGHT YEARS.

That’s an important point, because the author here seems to be asserting that most folks are enjoying unprecedented financial well-being. NOT SO. Sorry, but not even the sacred numbers bear this out.

So, the problem is with our definition of recession and of success in terms of our national economy.

We are not economically successful if working Americans are experiencing job loss and falling incomes. We are not economically successful if the wealth of this great nation is concentrated in ever-fewer hands. We are not economically successful when our middle class is shrinking (over 70 percent of Americans earn LESS THAN $40 thousand per year!).

The American people aren’t wrong on this one.

And those of us that work for a living aren’t out dancing in the street along with the wealthy elites. In fact, we don’t share the same streets – OR the same America – in common with them.

no it isn’t a recession, it is a depression. Oh yes, and the factors people have used to determine what a recession is most certainly don’t apply since many people have dropped OFF the unemployment list, are UNDERemployed, or have given up. What is left to shrink? It’s this kind of trying to keep people from panicking talk that makes me totally panic

“The rewards of economic growth are going disproportionately to those with the best educations, bypassing many of the more numerous workers without college or higher degrees.”
OK, so it is a recession for most people except some rich guys. I know there is no recession for people making over $1 million per year. But if you are in middle class, GDP growth disproportionately passes you, and you are definitely in recession.

As an about to be retiree, I can tell you one reason the baby boomers might think there’s a recession is that losing a huge chunk of your retirement savings in the last 2 qtrs makes you feel a lot poorer, and there are a lot more pending retirees at the moment than there have been ever before.

This is a recession kids. I live in California. The only people who are buying are the Europeans and those who make over $500K annual income.

The rest of us are suffering.

Like everyone else here, I feel there is a disconnect between the people like Colvin that argue on the numbers they get and rationalize for us. The trouble is, you can’t compare 1981, 1991, and 2008 numbers. The methodology for calculating has changed drastically. If you go to one economist’s attempt to show this at shadowstats.com, he calculates the current rates based on the older formulas. I am not sure how accurate he is, but if he is even close, we have been in a recession for most of Bush’s years as president, the inflation rate is at least 10%, and unemployment is also over 10%. THOSE numbers are what ordinary people intuitively see every day in our economy.

Look. No matter what the stats tell us, the mood and the contagion effect is telling us recession. And, in some sectors and communities, it must feel like a depression. If you are not in the elite group of individuals sitting on a lot of cash who will never be effected by what’s going on, you are personally feeling it in a very severe way. Go talk to anyone, who lost employment with little prospect to find a new job in the next 90 days, or lost their home to foreclosure or is threatened with foreclosure, or adding credit card debt accruing at 26.99 %, or not having health insurance to cover basic medical necessities. For the vast majority of people in our country, we are hurting very bad and prospects of coming out of this without financial ruin and devestating psychological effects is likely with each additional bankruptcy declared. This era of vulnerability, as the era of the great depression, will foreover influence our childrens’ lives in how they will live.

I love statistics and economics. I love strategic management and business development. I am a CPA and market watcher, and we are in a recession, with real threat of a depression!

I find these comments interesting, but a sign of what is wrong when we only rely on statistics. Numbers only represent a two dimentional measurement. Wall Street’s weakness is exactly that, a 2-dimentional perspective. Value has historically been created off one ratio, earnigs per share, and risk measured by on ratio financial materiality. As a CPA, let me say that accounting only illustrates one dimention of performance and risk management. Quantifying strategic and business vulnerability is much more meaningful, but has not yet been standardized into meaningful public reporting. The maturity of an organization can be measured and can represent its vulnerability to a variety of market risks. Maturity is measured over Strategic Development, Process Development, People Development, IT Development, and Control Structure Development. Together these factors tell us the vulnerabilities the organization faces in the daily economic battle. What kind of armor are they wearing?

In the case of the overall economy we have just collectively realized there has been little plan for engine maintenance. That has woken us up to the realization that the Fed is still comparing the car performance to an outdated road system built when the US dominated the world markets without effort. Can the car even travel on the global network?

So in short, Geoff, yes the car is still rolling. It has some stores of global energy. But the reality is we have a 1929 Catalac with engine trouble. We have to build a 2010 Hybred Toyota if America plans to realistically compete in the future of the global economy. America will emerge with serious global competition if this becomes a depression.

if we aren’t in a recession, then we are definitely headed for one. prices of everything are rising – food, gas, healthcare – and salaries arent increasing as the cost of living increases, not to mention all the layoffs that have been happening lately. this “psychological recession” could drive us into a real one, a real BIG one. Our economy is unstable right now do to the fact that its relying on sources outside the U.S. to sustain itself (imports, exports, trade). Nobody inside the U.S. is going to invest into our economy right now if they can barely keep food on the table and gas in their car. the economic stimulus package last year did nothing, if anything people saved that money or spent it on gas instead of “investing in the economy”. The education gap is growing, but financial aid is shrinking, so the gap is going to continue to grow wider. something has to be done.

I don’t trust the numbers that the current administration puts out for the public. We’ve been lied to too many times before.

I believe that we are actually in a recession, and if we had real numbers from the liars up above then it would be clear how dire our situation is.

What is clear is that I pay almost $5.00 per gallon for gas now. I pay almost twice as much for staples such as milk at the grocery store as I used to last year.

My ex-husband’s job instability caused him to stop paying child support several months ago, causing me to use up what savings I had for expensive childcare during the summer.

My best friend’s company was recently “acquired” and 95% of the workforce is being laid off. She was just told that her last day of work will be the day before Thanksgiving.

I was lucky to get a cost of living raise this year, but it does not begin to cover the real cost of living challenges that I face today as a single working mother.

Mr. Colvin needs to re-think his theory, because it doesn’t apply to the average American like me.

Geoff is technically correct it is not a recession .Its a train wreck .

Typical economic mumbo jumbo. As long as average Americans like me, are working harder than ever to get half as far, we are in a depression. I don’t need stupid textbook definitions of recession and depression to know we are in pain and future generations are at risk.

Everyone who represents this government, does not know what it is like to work all week just to make ends meet.They should try living on an average salary in todays economy,only then will I believe them when they say they understand. It is very hard for a lay person to understand how this can happen in such a rich country.The dopes who run this country should all be fired and the country should be run by all women with P.M.S……..Stop giving our money to other countries we need it.Stop trying to get all the other countries to like us.. not going to happen.
Stop trying to win the war in Iraq when we know it will never happen.
Stop trying to brain wash the American people into thinking it can be won we know better.Instead of spending All our money in Iraq and else where, give out another stimulas packet this time make it worth while.All the hype over this I would spend this on a good night out.
This to will pass and we will go on with our lives as usual .letting the dopes in the white house rule our lives with us having little or no say in anything that happens here.Everytime the dopes make a move the people of this country should be allowed to vote before anything goes into play.We are the country so how come we have no say in how it is run.
It is only a matter of time befor the people of this great nation stand up against this regime.Let the people talk.let the people show them the error of there ways.Let the people help run this nation.Wake up America we are all as much to blame.It is time to stand and be counted I have seen marches to Washington for b…s../the state of this country is in dire straight right now,and I dont see one organization trying to do anything.We talk the talk but dont walk the walk.
America is the greatest country in the world,what kind of example are we setting.

I thought the article was thought provoking. What the article made me think about was statistics and manipulation.

Over the past month, there have been a bunch of announcements for layoffs. The unemployment rate considers people not currently working who are actively looking for jobs. A lot of the layoff announcements aren’t going to hit the unemployment rolls for another few months. Another thought that crossed my mind is there are a lot of two-earner households. I wonder how many of these people are families that can no longer afford child care that have decided to exit the job market for the benefit of raising kids (cheaper than daycare). Is the current unemployment rate understated? I don’t know the answer.

The other statistical question is with relation to the GDP. In case folks don’t know…

Gross Domestic Product = consumption + gross investment + government spending + (exports – imports)

We all know consumption is down. People are cutting back. That’s old news.

Gross investment I’m willing to bet is about even. Interest rates are low so companies in a high cash position are either holding onto that cash or are going to start the merger and acquisition thing soon (as B of A has). Obviously foreign investment in the U.S. has spiked with the commodities market over the past year.

That gets us to government spending. Government spending includes:

The war in Iraq
The war in Afghanistan
Your “economic stimulus payment” (which if done right counts as consumption AND government spending)
The Fannie Mae bailout
The Freddie Mac bailout
The AIG bailout
The Bear Stearns bailout
Aid sent to Georgia
Aid sent to Myanmar (still costs money to move that equipment and put it in place even if it isn’t accepted)
Hurricane Ike cleanup which G.W. stated the Feds are going to pay for
The drought relief to farmers in Colorado announced in the Post today
etc., etc.

The last portion of this calculation….exports-imports. Are we really exporting more durable goods? Corporations are scaling back like crazy (again with budget cuts and layoffs). If production is down, then how are exports up? Are inventories that high? Doubtful.

Generally, when a company creates financial statements, in the footnotes, there are entries relating to “unusual events”. Surely, these aren’t things that the U.S. Gov’t does in a “business as usual” fashion…why aren’t there any footnotes? Should these “statistics” be trued up based on the U.S. deficit which is an indicator of what the government is spending?

Is the government manipulating these statistics with government spending? Are they following in the footsteps of Worldcom and Enron? You decide.

The GDP numbers, along with CPI and other indicators, are manipulated by the government for the benefit of the Republican administration. People know what is happening, and they are not fooled.

I agree with many of these comments. Although we may not officially be in a recession and we will ultimately ride out this storm, there has been a massive loss of assets for the average person. Losing houses or the value in whatever stocks may be owned. Granted, some of these investments are long term, but those ready to retire or who need to pull money out for their kids education are in trouble. Not to mention inflation and gas prices.

So keep adding net exports to the other components of GDP to tell us everything is fine. Too bad GDP does not account for deflation of assets.

I think the author of this article is right that there truly is no recession. Slowdown, Yes. Recession, No. His diagnosis is correct that it is a self-fulfilling psychological disease. But, he does not talk about the main culprit that caused this disease. It is the MEDIA, which continues to highlight the bad news because of its anti-Republican bias. Fact is that the mess in the housing and banking sector is being equated to the entire economy without any real reasons. Another example is that increase in gas prices and subsequent increase in inflation is considered as catastrophe, without considering the growth momentum of at least 3% plus increase in real income in last decade. Anyone who thinks it is a recession, must compare their financial situation 10 years ago to current situation and then objectively answer whether he/she has done better or not. Chances are that 90% will say they have a higher standard of living than 10 years ago.

Let me get this straight:,retail sales are down, the auto industry is in trouble, fannie, freddie and aig had to be bailed out. Major companies are filing bankruptcy. for sale and forclosure signs are the new lawn ornaments all across the country. people are losing jobs…

here’s my take on all this…..

extra money left over after I’ve grocery shopped for my family and filled up my car…zero dollars

equity in my home…zero dollars

listening to the government telling me we are not in a recession and everything is okay…..priceless

Doesn’t matter what you call it, it is much worse than most recessions that I have lived through. Almost retirement age with all retirement savings gone, my home gone, my job gone, all things I have depended on for any measure of security…gone… does not feel like a recession. It feels like a depression ( not to mention that I am feeling so depressed).

Americans Are tired of hearing the nonsense that we are not in a recession. Some are tired of hearing that we are. The simple truth is we are in one. A deep one. This just the begining. Next comes all of the credit card defaults that people are living on. Because there salaries are not enough. So wait for that one buddy! Amex, visa, mastercard are all going to get nailed for all for there unsecured debt portfolios. With everyone going into bankruptcy or simply walking away from there debt to survive. Not to mention food prices, gas prices,realestate,bank falures,war in Iraq, possible conflicts with other contries, All in the middle of an election year. So forget all your technical bull. Who ever does not call this a recesssion. May just end up calling it a soon to be depression. I am sory but this has gotten way out of control. We the people are fed up with goverment bailing out big corporations after they have filled there pockets at our expense. Yes in some cases they had no choice. Its for best given the situation. But where is our help. For example. Why not stop foreclosures for six monhts to give home owners and banks time to work things out. It might cost billions in the end. But hey big brother can just cut a check if it does not work out. Can anyone say good by to Medicare. Good bye to Social Security. Wake up people. Americans are burning there furniture to keep there houses warm. God bless America. We sure do need it.

I think that Wall Street en masse need some Cognitive Behavioral Therapy. The hysteria and negative framing are pathetic.

This article ridiculously and irresponsibly overlooks the radical changes implemented in Clinton’s administration that affect how unemployment, GDP, and inflation are calculated. What we’re seeing in the numbers is that the numbers aren’t telling us anything.

Recession is just another term, and obviously not one founded in reality. And whether we are technically in a recession or not, what is happening in our country and in our economy is scaring those people who don’t have seven houses.

The truth is most growth that had occurred in the past 7 years was fueled by debt. People were not making more (a max 3% raise, with a min 5% increase in health care? Do the math), the government is not collecting more, and corporations have not embraces true sustainable growth. Being that we had an explosive economy built on debt, some day the dollar will hit the road. Currently, government spending and exports are saving this country from a technical recession. Problem, I do not want to join the military. We don’t actually produce that much anymore, (I have a Chevy with a lot of Chinese or Japanese -I can’t tell- on it). So, back to the non-recession. Give me a break. Please tell me who is better off now than last year? People are pulling back to support their debt, and thanks to the same greedy financial companies, I can’t even file bankruptcy to put things back in order after loosing my job. By the way, unemployment #’s are also a joke. I worked two jobs prior to being laid off. Because I still have one job, (as a server), I am technically unemployed. I do generally get a full unemployment check because those wages are so small and hours are minimal. Look at the reports the government actually puts out. Add back underemployed and discourage workers, and we are around 9% and above. Remember, it 00-01, it was called a jobless recovery! So, something must have changed to go from 7%+ to the 5%’s (it’s called read the disclaimers, unemployment #’s have been recalculated, it’s on the report)! We all know that whomever gets in office will recalculate the GDP and prove that the recession started with Bush! Statistics are great, you can find any number you are looking for depending on how you want to calculate them. The truth is, debt is not fueling the economy any more. Even if you have a great credit score, assets have to have value. It hasn’t been since the 70’s when people had such a low equity in their homes. And vehicles. Sure I could buy a new one at 4.9%, but why? The car companies are not making the vehicles that I want. So buy your SUV with employee pricing and low interest and pay for it at the pump. But, in a few years from now, when manufactures actually produce what people want, your 2009 model will be junk. Why, because unless it’s a collector, nobody will want it. So, were not in a recession. Whatever. I know things are not psychological for the people who have lost their jobs and their assets, trying to figure out how to dig themselves out. I know I am not the only one in this situation. Don’t tell me that the wait for an unemployment rep hasn’t gotten longer, and say it’s in my head. Oh, and as a server, I must also say, it we aren’t in a recession, then why am I serving half the people, and the people I serve are leaving half the tip. It’s not in everyone’s head. What would be nice is if maybe, somebody says hey, times stink, were in a recession. Lets find a way to get out.

If it’s not a recession, it must be a depression! Deregulation has been great.

The reason people thought we were in a recession when we were not is very simple.

The Business Media needs an upturn/downturn economic cycle so that it has something to write about. Articles asking when Bush will use the ‘R-word’ for example (another catchy little media buzz ploy in itself) inevitably leads to doubt about the economy.

This is indeed a self-fulfilling ‘psychological recession’.

What Fortune Magazine is careful to omit however, is that it was started deliberately by the media.

I hope media jobs are at least proportionately as vulnerable as the rest of the economy’s.

The GDP may not have declined by much, but that is before inflation is taken into account. Inflation is set by the government, that chooses a “basket” of consumer items and how much the price of these items have increased over the year. The only thing is, to avoid increasing social security payments, they switch out goods that have had a large increase for “equivalent” goods. So real inflation is never reported. Conclusion: If GDP is negative before inflation, then it must have really taken a blow. This year food and gas prices have soared along with the cost of living. And the value of the dollar sank. We are in a recession. How can there be any question?

We have a twofold problem:

1.) In terms of US dollars we have growth, but the devaluation of the dollar on a glabla scale means that we’re spend more increasingly devalued dollars, not that we’re actually buy more or producing more.

2.) Psychlogy is irrelevant, and definitions created by economists and the feds are too: peoples’ wealth is tied to their homes, their savings accounts, and their retirement funds. That said, home prices have fallen, equity in those homes is all-but-used-up, interest rates are lousy (mean APR on savings is too), retirement funds are evaporating quicker than Windex on a summer windshield.

True, the wealthy and the corporate vlaues may be fine… but for the other 98% of the country, we’re not.

Stagflation to depression. Job layoff, All prices rising, Unemployment is rising. Credut card companys will soon quit loaning money they dont have, etc, Forclosed property now owned by the gov. Dollar is falling to depression levels and no one wants it overseas. Statistical information fradulant! Eventualy no country will loan the United States Money to include its citizens! America does not own itself anymore and we americans have sold out our country thru welfare and all the other gov programs. Vote against the ruling elite! Vote against socialism and communism!

Obviously, Mr. Colvin makes enough money that gas prices and groceries are pocket-change for him. For those of us with families and middle-class jobs, it has put us on the tightest budget we’ve been on since I was in college. My wife and I earn just shy of $80,000, and with our 2 kids, we are close to struggling because of the price of everyday basics.

My advice to Mr. Colvin: take $100 to your local grocery store and see how far you get trying to buy food for the average American family. My bet is you won’t get far.

We absolutely are in a recession, and no one can tell me any differnet. A recession is defined as back to back quarters where the GDP was shrinking rather than growing, but the calcualtion for GDP is FLAWED. The great ol US of A calculates their GDP without factoring in true inflation. Rather they use the GDP deflator, which I must question, how they calcualte that. Q2 deflator was a mere 1.3%, almost half what it was the previous quarter. With the cost of goods where they are, plus the loss of jobs and income, I really believe that is a poor indicator of true inflation. If our GDP was 4.6% but we assumed what I believe to be accurate inflation of 5% – 8% during the quarter, the nominal GDP should have been – .4% – -3.4%, a declining economy to say the least. Our great country controls the way they calculate the strength of our economy, and bends the truth to paint a better picture then what we actually live in. They do this to build confidence to hoefully once again stimulate spending which really fuels our economy. They lie to us, becasue they are afraid of us locking ourselves in doors with the lights off,, if we heard the word Recession or worse yet, Depression. How can our econmy be growing when people are losing their jobs, and more governemnt money is being spent to bail out huge companies, who made bad decisions?

Unlike most posters, I think the facts are clear that we are not in a recession. However, to me the facts and obvioius consumer sentiment points that we are headed for one.

A thought-provoking article, but keep your political views out of it. The bias now makes me question the credibility of your article.

This is hilarious. The USSA’s mainstream media is sounding increasingly like something produced by the Politburo. I wonder why?

PS: Don’t blame us Ron Paul “kooks” for this mess!

We may not be in a recession in official government terms, but when people see their net worth shrink by double digits than to most people, that is a recession. Investment income, housing prices have plummeted, food, gas and oil prices have all gone up. Less money in the average persons pocket means recession. Maybe we are not in a recession in a business sense, but most people are in a personal recession.

What planet does Geoff Colvin live on? I make a modest living and try to live as frugally as possible, but my salary isn’t rising anywhere near as fast as the cost of food, fuel, my health care premiums and other essential. I just watched a huge chunk of retirement savings evaporate yesterday because of others’ irresponsible spending and speculation. The amount we continue to spend the wars in Afghanistan and Iraq is absolutely mind-boggling. We’re not in a recession??!!?? Give me a break… because the economy certainly isn’t.

why don’t you go to the food store and see the inflated prices on the basics, milk, eggs,etc. fill up at the gas pump or diesel pump and feel the pain. look at the cost of medical care. jobs–look at the layoffs–forget the term recession–we are in somthing more serious–its call “stagflation”

Just reading the columns here, it is clear people are emotionally down and no amount of economic think tank verbiage is going to satisfy the average person on Main street who has lost his job or witnessed the debacles on Wall street.
Another concern I have is that with the fall of every financial icon, our President makes it a point to reinforce that our economy can in fact withstand such shocks. This is clearly a sore spot in the face of all the media attention towards the fall of another big name in the American corporate empire.

Obviously we are in a recession and headed into a depression but the government wont admit it due to electoral concerns.

Defining a recession by full employment numbers we are in a depression.

Using real dollars, average individual incomes have been shrinking since 2000.

Now we have the worst destruction of financial credit in over a century and this will acceleerate wealth and job destruction.

The Fed is going to have to step in with a firm hand to get this runaway chariot back under control.

The reason that government figures do not show us in a recession, is because the government distorts the figures. All the ridiculous games that are being played with inflation stats to fool people into thinking that the government isn’t printing too much money fold into every other statistic. Thus the GDP measures (which is the rough gauge of a recession) is distorted to be positive.

By real measures, the money supply is growing at greater than 10% (which is probably closer to real inflation rate people see at stores) and GDP is negative. And GDP doesn’t measure the wealth destruction caused by the housing and finance industries.

Relatively soon the term “recession” will be redefined to take into account more than just GDP. Computers and automation have led to production gains that almost guarantee a positive GDP even in the midst of slumping auto and home sales – two huge cornerstones of the American economy.

Perception is reality. If the American people perceive a recession, then it’s a recession.

Yes, a recession is defined as two or more quarters of negative economic growth. The problem seems to be that 1% growth does not qualify. Yet what is measured? GDP, GNP, but not GPP (gross personal product), it is not even a part of the lexicon.

We may not be in a recession in technical terms, but Americans feel as if we are. And judging by the situation in the investment world, they too are feeling it. Perhaps it is time to reassess our definitions.

It is wonderful for the author to point out recession data from a high level—clearly you are speaking to the top 5% who are doing quite well and benefiting most. Recession is an irrelevant term for people whose day-to-day cost of living has jumped and those that feel uncertainty around the sanctity of the markets—their life insurance and market investments. Thanks for giving us the high level—perhaps you can also report the experience of those of more modest means one day as well–this time not from the pure GDP perspective. You may also want to comment on the power shift as other countries gain economic strength, while the US lags in some areas. Our country’s balance sheet is not looking so good.

So, because we’re not technically in a recession, everything’s fine? I know this guy thinks he’s making a point about media and rabble hysteria. We’re only just beginning. It’s going to get worse; A lot worse. I’m not a screamer, but I have yet to hear or see one rational argument with a premise for a light at the end of the tunnel in less than 10 years. And it may be 20. We don’t have people in positions of power who would have the fortitude to put themselves and/or their party aside to achieve anything. (Even if there were something to be done)

Keep kidding yourself.
All you have to do is drive down any street. Seems like 20% of the houses have a for sale sign in front. But no one can get a loan or afford a mortgage.
Hundreds of thousands of decent jobs are gone to China, India, Mexico, etc. thanks to vulture capitalism.
Things are not getting better anytime soon without drastic changes which neither political party seems to have the will to make.
Re-regulation, tariffs, good old fashioned protectionism, maybe a CCC type job program, end of Bush tax giveaways, etc. etc.

We may not be in a recession as you say, but that does not erase the fact that un-employment is up, consumer spending is down, housing prices are down as well as home sales, we are in a foreclosure crisis, and our economy is hanging by a thread. I think it is safe we are in trouble… and there doesn’t seem to be an end in sight. Of course people think we are in a recession.

I’m not sure if we are in a recession or not, certainly those people who have lost their homes due to the subprime mortgage mess will feel like they are in a recession. But on the other side, there are responible individuals who did not take on a debt they could not afford and it is those people who are keeping the economy moving and possibly keeping us from sinking into recession.

To say we are not in a recession is like standing at the edge of a rain storm with the wind blowing in your face and saying it’s not raining. We have every indication to expect a reversal of trend growth.

This economy grow on smoke an mirrors for the past couple of years and the exports were derived from those countries rich in cash flow from that growth. With home owner equity shrinking along with bank captial economic contraction is inevitable. The economy may hum along ok but everyone’s balance sheet is impaired and the prospect for future growth has been muted.

We are not in a recession, that was months ago. We are in a depression, at least the american workers are. What do you expect when coorporations ship all of our jobs to countries that allow slave labor? I know a few fat cats are doing fine but we are in a depression folks!

Based on who’s numbers… Official numbers point to everything being rosy! I just know that my cost of living goes up every week, and my paycheck stays static. To me, even though I’m doing the same work, for the same number of hours.. my world is turning backwards at an alarming rate. I don’t get near as much food, fuel, electricity, etc. for my money as I did last year.. or even last month (and I’m a college educated professional, not a lower income hourly wage earner). From my point of view, that spells recession, at least as far as my sphere of influence is concerned.

This article has the same tell-tale selective facts that most politicians like to use. Is this person running for some sort of office? When the increase in net exports is fed by rising inflation, not new production, it is not economic growth. In fact, even the “Core CPI” numbers that politicians like to float around negates food and energy costs, which make up a substantial amount of every single American’s budget. The economic growth we are seeing is purely inflationary, and as energy prices come down so will our economic growth.

Simply put, true economic growth can not occur while there is no credit available to feed that growth. As mentioned by the previous commentor the erosion of purchasing power to the average and above-average consumer is much more a sign of the economic plight we are in over putting together arbitrary numbers that are highly unverifiable and subject to interpretation. And the re-distribution of wealth overseas over the past several years along with political platforms that have been built on whim and fancy have only reinforced those effects.

Bravo to this commentator for completely missing the point.

WHAT A JOKE….!

All the companies in trouble should be looking inwards at themselves because it is their fault they are in trouble.

Exclude these companies and we are not in a recession, it is the greedy, predatory lending companies dragging the rest of the good companies down with them, on top of this they are firing so many people it is pushing up the unemployment rate.

Go and find someone with good credit and ask if they are experiencing a “credit squeeze” because they are not. If your score is over 700 you can still buy a car with nothing down and only pay 4.9% over five years.

No one should feel sorry for these companies; we should feel sorry for the people who got duped by them.

Everyone should stop watching the Business TV programs and perhaps the presenters will stop making a different sensation every day.

How did you measure GDP? If it is in dollars, then you are wrong. By your measurement, even Zimbabwe is not in recession. If you measure in a more stable currency (or even against Gold), we are in big recession. The statistics don’t lie, your interpretation of GDP is wrong. People know this because they see that their income can no longer their lifestyle.

The American economy may not be in a recession, but the American people are. One percent of the population has recently come to own 80% of the economy and thus gains in the economy will no longer benefit Americans. Wages have been not grown for five years. That’s a recession.

I think that the perception is recession even though technically there is no recession because of the zero growth in wages and even negative growth in wages. The growth in profits as the result of outsourcing and cheaper imports from China is part of the mix, I have seen my company not only lay off thousands of people here but hire hundreds of people in India to replace the. Profits are up for the company but thousands of Americans are looking for jobs, taking less money in the process just to make ends meet.

Recession…YES. The government can’t fix the problem by spending more money. Look at the debt as a percentage of GDP!!!!

People may think we are in a recession because of past media discussion. It has been awhile since we’ve had a deep one so a slow down can be sold as a recession.

Are you joking? This isn’t a recession- we are on the verge of a economic crash. We are watching what is left of America meltdown in front or our eyes. When the dust settles, there will be a new world order with China as the superpower of the 21st century.

Get out of dollars while you still can.

I think you should learn what net means. How can you have a rise in “net exports” when you are in a raging trade deficit? What are exports net of if not imports?

If it walks like a duck, quacks like a duck, and tastes good with a-la-orange then I’m willing to bet it is what it is. If the AIG bailout hadn’t happened, I wonder how many people would be thinking Depression instead of Recession. As long as the Chair of the Finance Committee is a Bush mouthpiece, we’ll spin this into merely a significant market correction. I just wonder if the gas prices are going to plummett to below $3.00/gal now that oil is below $95.00/barrel and it has been determined that refining capability is not as impacted as was originally thought?

I think most non-upper class Americans would take exception to the premise of the article. It indicates & infers that there is no recession, and that the reality is that the only recession which truly exists, is an intangeable one, existing solely within the irrational fears of the public.

Absolutely not true. An irresponsible leap in logic, poor reasoning, and offensive to boot.

It may well be true that there is no true Recession in the sense of the current technical definition, but that does not mean that there is not a true Recession, impacting Americans, consistently and broadly, in ways that have even more tangeable effect, than the traditional definition would reveal.

The official definition reflects a measure of Gross National Product, or the production output of the nation. While this had traditionally had a trickle down effect upon the public, it is an effect by extension, only, which has been largely filtered out by the new economy.

A “recession” which would be a more appropriate, as a measure of
the economic well being of the American population, would be one defined as a measure of “standard of living.” That would be a measure of the
trend of income, as a function of the trend of the costs of living. If
average income were measured it would reveal an average increase in median income of something probably on the order of 2.5% annually. If the average cost of living were measured (especially including food, energy,
and healthcare insurance), it has probably increased over the past year by something on the order of 12%, possibly more.

The point is…. what people are feeling is an erosion of purchasing power, which is negatively and significantly impacting them in the most direct and tangeable ways possible. This is “real,” it has
been sustained over an extended period of time, it is very tangeable, and it is a “large” effect. It is NOT imaginary, or irrational. The reason that people are reporting a perception that the recession is real, and already in place, is because they are unconsicously substituting their real and reliable awareness of the more relevant “standard of living recession” in place of (what is to them) a largely abstract notion of “recession”, mostly because they are being asked in a way that elicits commentary on that impact, rather than the impact of the GDP version of the term, and because their commentary is unfairly & inappropriately funneled into that more irrelevant context.

The subject would be better served, if the press (when interested in writing a story on the impact of the economic downturn on average Americans) would recognize that GDP Recession is not a metric, which is primarily (but only secondarily) relevant to this topic, and instead would focus on the more relevant measures, such as a ‘Standard
of Living’ Recession.

Not that stories on GDP trends are not relevant to some enconomic understandings, but, we should see many more stories which continuously report the status of the “standard of living” trend… when supposedly reporting on the state of middle class well being within the U.S. That is, by far, the more pertinent measure.

It is not so much where we are but where we are going once this panic period subsides. Depression or stable bottom are the potential options.

You left out one major assumption. Debt levels. People are uncomfortable, and for a reason. Home mortgage, second mortgages, credit card, auto loans, etc…People are in debt up to there neck, they know it, and they are very, very nervous.