The Recession, the Rich and the Reality of the American Dream

The American public has just received news that the recession is over – and has been over for about 15 months now.

According to a statement released on Monday by the National Bureau of Economic Research, an organization composed of over 1,000 economics and business professors, the recession has been “officially” over since June of 2009.

Surprise!

Before beginning your much-belated celebration, there are several troubling thoughts that come to mind when reflecting on this statement that was just released on Monday.

For starters, the primary economic indicator used to judge whether or not we are experiencing a recession is GDP growth.  If the GDP shrinks for two consecutive quarters – or 6 months – then we are officially in a recession.  The National Bureau of Economic Research also uses Gross National Income, manufacturing and trade sales, and the aggregate hours of work (among other indicators) in determining that the end of our recession was June of 2009.  So according to this organization, which primarily uses GDP, GNI and business output indicators to determine the duration of downturns in the business cycle, the “Great Recession” started in December of 2007 and ended in June of 2009.

Economic Policy Institute analysis

The actual report states the following: “In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.”

Which brings me to my next point: Is it a mistake to measure economic well-being by strictly following patterns of the business cycle (i.e. changes in certain economic indicators)?  I understand the difference between leading indicators (stock market returns), coincident indicators (GDP) and lagging indicators (unemployment rate) in determining the economic performance, but should we continue valuing these indicators over others when measuring economic performance?

I Love Freedom, I’m a Patriot and I Support Our Troops!

And God bless the United States of America!

Okay, I will back off from the hyperbole for a minute.  No, I am not trying to sound condescending (did it work, though?).  I just want to take a minute to comment on the way we use language and how the words that we choose to use reveal a lot about us and our “agendas”.

Barack Obama used the words “hope” and “change” and the phrase “Yes We Can” more times than I care to remember during the 2008 presidential campaign.

One of President Obama's 2008 campaign slogans.

Not to be outdone, McCain and Palin used the nationalistic tagline “Country First” and utilized patriotic sayings, symbols and video clips so often that the next step would have been draping the American flag over themselves every time they spoke.  After watching the 2008 Republican National Convention, I am surprised I didn’t throw up red, white and blue all over the living room floor.