Today the National Bureau of Economic Research (NBER) released the result of their recent deliberation on the grand trends of our macro-economy and a pronouncement that the “Great Recession”, the longest recession in the post-WWII era, ended over a year ago in June of 2009.
It’s important to recognize that the determination of the end of a recession speaks little about the quality of the subsequent recovery or of the future economic trends and merely cites the month and quarter that the overall, economy-wide contraction ended.
By determining the “trough” of the downturn, the NBER has identified the point at which the majority of the economic bleeding stopped… what caused it to stop and what happens beyond that point is only now being fully understood.
These are extraordinary times indeed and one must not forget the tremendous effort that both the Federal Reserve and federal government have had to put forth JUST to establish this “trough” and the subsequent anemic economic trends.
Zero bound interest rates, quantitative easing, hundreds of billions of TARP, hundreds of billions of “stimulus”, cash for clunkers and caulkers, billions for home purchases… the list goes on and on… all in the name of resuscitating our ailing economy.
So the latest “trough” is in but let’s not forget that aside from the insane peak speculative binge years of the housing/financial bubble, our macro-economy has been, more or less, in a trough for better than a decade now.
Declining jobs, flat to declining real wages, lower stock values, massive housing train wreck, widespread off-shoring, aging population and grotesquely larger government are the hallmarks of a grim period whose excesses cannot be righted by one or two recessions however severe.
The past can be studied and deciphered, categorized, labeled and organized but make no mistake, it’s the future you should be concerned about.
On that note, Steve Liesman made a serious blunder this morning on CNBC when interpreting the NBER release as indicating that “technically” there can be NO “double dip”.
Liesman went on to say that “now that this recession is over… the next recession would be a new recession”.
Aside from completely forgetting that the prototype of “double dips”, the back-to-back recessions of 1980 and 1981-82, came in the form of two distinct and completely separate recessions, Liesman’s confidence in his “no double dip” declaration evoked a sense of propaganda on a day where the administration and its interpretation of economic events will be the focus on CNBC.