As I read the financial blogs and news sites, I see over and over again that economists and forecasters are surprised by the speed of the decline in global economies. Everything is falling faster than they had expected.
Might this be a function of the Internet? People are able to exchange information much more rapidly than before. This leads to faster decisions and shorter reaction times to external events. It would also seem to indicate that the turnaround might be faster as well.
7 comments:
Well, this is really only the third time something like this has occurred (the previous two were the "Long Depression" after the Panic of 1873, and (obviously) the Great Depression). The Long Depression lasted quite a bitlonger than the Great Depression, and one of the (many) changes between the two was improved communication, so maybe you're on to something.
Which brings up a question of names: if we have a Long Depression and a Great Depression, what should we call this one? Maybe we'll be really lucky, and it will be the Fast Depression.
Is it the speed of communication, or the ability to immediately see through the politicians' BS?
Perhaps this can be named the "Unnecessary Depression" or the "WTF were you smoking depression".
Can we wait to name the depression until we have a depression?
I noted on my erstwhile blog for months that people were saying we were in a recession with nary a sign of a recession (i.e., two consecutive quarters of negative growth).
Now that we're finally in a recession, everybody seems to want a depression.
Perhaps we actually will have one. If paying for free foreign abortions and resodding the lawn on the Jefferson Memorial doesn't stimulate us out of this recession, that is.
But, to my knowledge, we have yet to reach double-digit unemployment, much less 25%.
Patience.
The Dear Leader and his MSM Chorus say things are horrible, so I believe they are horrible.
And the worse things seem, the more we will be able to appreciate the Great One's Greatness.
(it's hard writing this crap, and harder to believe people actually think this way)...
"I noted on my erstwhile blog for months that people were saying we were in a recession with nary a sign of a recession (i.e., two consecutive quarters of negative growth)."
And then, come November, we suddenly get "Hey, by the way, we've been in a recession now since, oh, about this time last year!"
You can't unambiguously state that there is a recession until you are at least six months into it (and more likely seven or eight months, because you have to wait for all the data to come in). That doesn't change the fact that the conditions that made it a recession, have existed for the last six to eight months. Saying that the recession doesn't start until you get all the data in to declare you are in one, is self-delusion. And anyone who pays attention can see when a recession is in progress, even if it hasn't yet been going on long enough to fulfil all the criteria.
If you jump out of an airplane without a paracute, you can say all the way down, "I'm not dead yet!". But, that isn't going to change the fact that someone predicting you are almost certainly *going* to be dead once you hit, is probably right.
Similarly with depressions. The "Great Depression" *started* a long time before it was admitted to be happening. Claiming that it isn't happening until it has run some specified amount of time is dodging the issue.
Looking at the horrific balance sheets at all levels of society, I'm pretty sure this is a Depression.
Tim,
Drawing comparisons like the one between recessions and jumping out of airplanes are amusing, Obamanesque, and all the rage. But, unfortunately, some technical terms have actual definitions.
So it is for recessions. And I quote from the Bureau of Economic Analysis (US Dept. of Commerce): "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.5 percent in the third quarter of 2008,(that is, from the second quarter to the third quarter), according to final estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent." [ital added]
Now you may have been bummed out and felt like we were in a recession in the first and second quarters, and, if so, you had a lot of very vocal company, but we weren't. One can hardly claim "recession" when the economy grows almost 3%.
And, yes, it is true that recessions cannot be officially declared per the definition until more than six months after they begin. That merely reflects our inability to model the economy well enough to predict. Which is a problem with many other complex phenomena. Like election outcomes, for example (much to the delight of Presidents Truman and GW Bush and former candidates such as Messrs. Dewey and Kerry).
Post a Comment