by Frank James
Presidents and their senior administration officials generally don't like to talk about recession. Don't want to talk down the economy and perhaps make it a self-fulfilling prophecy, the thinking goes.
That's why President Bush today only mentioned recession once in his speech to the Economic Club of Chicago today and that was in a historical context. Bush was reminding the audience that his administration inherited a recession when it took office in January 2001.
But that doesn't stop others from talking about recession, like saying that we're in one or that, if we're not technically arrived there yet, we can't escape entering one at this point in the economic cycle.
Perhaps no publication champions the U.S. economy more than The Wall Street Journal. But the Journal is also known as one of the straightest-shooting, most informed publications around when it comes to economic reporting.
Which is why a lot of people took notice yesterday when the Journal reported that a majority of the economists it surveyed agreed that the U.S. economy had entered a recession.
As the Journal reported:
Economists in the latest Wall Street Journal forecasting survey are increasingly certain the U.S. has slid into recession, a view reinforced by new data showing a sharp drop in retail sales last month.
"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co.
Thirty-six of 51 respondents, or more than 70%, said in a survey conducted March 7-11 that the economy is in recession.
The Commerce Department said yesterday that retail sales fell 0.6% in February; sales excluding the volatile auto and auto-parts categories fell 0.2%. The declines reflect a sharp slowdown in consumer spending, which accounts for more than 70% of U.S. economic activity, as Americans grapple with high gasoline and food costs and declines in home values and other asset prices.
The survey marked a precipitous shift toward pessimism from the previous survey, conducted five weeks earlier. The economists now expect nonfarm payrolls to grow by an average of just 9,000 jobs a month for the next 12 months -- down from a previously expected 48,500. Twenty economists expect payrolls to shrink outright. On average, the economists predicted the unemployment rate will be 5.5% in December, up from the current 4.8%.
Those are the experts who believe we're already in a recession, which is usually defined as two consecutive quarters in which the economy contracts.
Then there are those who appear to be agnostic about whether we're in a classic recession today or not who but see us heading there without any detours.
David Roche, a London-based investment analyst, has an informative op-ed in today's Journal, which makes that point.
Even though the piece is written for someone with a technical knowledge of financial markets, one of its main points is fairly straight-forward.
We estimate that nonfinancial corporate debt ultimately will have to shrink by 11%-12%. This will generate a decline of five percentage points of real U.S. GDP growth and push the U.S. into recession. Europe's real GDP growth will contract by two percentage points.
Globally, total credit losses of $1.4 trillion will cause a contraction in world GDP of 2.5 percentage points, or half the current rate of global growth. So the global economy will become a gray, dull world of semi-recession and sticky inflation that will last a long time. Without major policy blunders, however, it won't be a 1930s-style depression.
I guess we're meant to take comfort from that final line, that we'll avoid a depression if the policymakers don't hit the wrong buttons. Roche certainly lives up to this line on his "Independent Strategy" consultancy web site: "Our research is based on a thoroughly objective view of the world as it is, not as some might like to see it."
Like an American president and his senior policymakers, maybe?
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Comments
"Bush won't say 'recession;' many others do"
No, Bush won't say recession because he'd rather do what he does best, LIE...
Posted by: John Hussein E | March 14, 2008 1:17 PM
Bubble Boy, King FUBAR, worst president ever. Just like the Iraq fiasco, Busco keeps lowering the expectations. When Bush gets through, America will resemble a third world country more than a superpower.
Posted by: d Hussein t | March 14, 2008 1:38 PM
Frank:
Our Dear President spoke at the Economic Club of New York, not Chicago.
--
What Bush says anywhere, about anything, is meaningless. He has credibility only with a tiny fraction of the world's population. He's Mr. Cellophane.
Posted by: a blinkin | March 14, 2008 1:40 PM
Aw, go ahead and say it. It doesn't matter at this point -- you got yours.
Posted by: Grandblvd "Hussein" 03 | March 14, 2008 1:48 PM
"BUSH SPEAKS"
THE STAKES ARE HIGH, A, A, A, A, A, A. $4.00 GAS, AMERICA IS "RESILIENT" AND CAN ADJUST AND MOVE ON.
SURE I'VE VETOED VERY DOMESTIC SPENDING BILL THAT HAS COME ACROSS MY DESK UNDER A "DEMOCRATIC CONTROLLED SENATE"
THIS IS MY GOVERNMENT AND THE DAY AFTER 9/11 WE READ ALL THE MEMOS AND FOUND NO WMD'S. WE ALL KNOW THAT. SO WHAT.
IT'S ABOUT "IMMUNITY" NOW.
IT'S ABOUT "TRIAL LAWYERS"
IT'S ABOUT "SECRECY IN THE HOUSE OF REPRESENTATIVES"
BY THE WAY, THANK YOU "MINORITY LEADER" ROY BLUNT. UNLIKE TOM DELAY, YOU GOT THE HOUSE TO BECOME "SECRET" FOR ME. I'M TOUCHED AND WILL NEVER FORGET IT.
I'M NOT GOING TO SAY "RECESSION" I'M NOT GOING TO TALK ABOUT OIL PRICES.
I'M TALKING ABOUT IMMUNITY, PROTECTION LIABILITY FOR TELECOMMUNICATIONS COMPANIES LOBBIED BY VICKI THROUGH JOHN MCCAIN.
I'M TALKING ABOUT "TRIAL LAWYERS" EXPOSING REAL AMERICANS BEING EAVESDROPPED ON AND THAT CANNOT HAPPEN AND CONGRESS MUST STOP EVERYTHING THAT MATTERS TO THE AMERICAN PEOPLE AND GO BEHIND CLOSED DOORS IN "SECRECY" AND GET ME MY IMMUNITY AND RIGHT NOW.
THANK YOU BUSINESS LEADERS OF NEW YORK CITY. YA'LL TASTE THE "SALSA" NOT FROM NEW YORK CITY HUH!
Posted by: Roger Morris | March 14, 2008 2:02 PM
Dubya won't say "recession" because a) he can't pronounce it and b) he doesn't know what it means.
Posted by: Janstress | March 14, 2008 2:16 PM
Another Frank James error: "But the Journal is also known as one of the straightest-shooting and informed publications around when it comes to economic." Economic, what, Frank? Nice fragment there. Also, it is better to write or say, "also is known as one..." rather than "is also known."
Frank also seems to be learning well from Bill "I love recessions" Neikirk.
Perhaps we are in a recession. Certainly, if we aren't, then we are on teetering on one. But if we do go into recession, that will actually be more bad news for the Tribune as advertising revenue drops in recessions and the Tribune cannot afford more revenue drops. That goes for the Trib's reporters too.
Posted by: John D | March 14, 2008 2:17 PM
This is precisely why we don't need another President who believes Bush policies are best, like McCain.
We need Hillary Clinton. Hillary is clearly the strongest, most qualified, most electable candidate in the race.
Obama is unelectable.
The more Illinois voters find out about him I doubt he'll be re-electable to the U.S. Senate from Illinois. He may even have to exit the state, maybe return to Indonesia?
Obama's ties to Rezko, Crown, questionable earmarks, Jeremiah Wright, etc. have cut to the heart of Obama's character and judgment.
Obama's "pastor" Jeremiah Wright is an avowed anti-white, anti-semitic, pro-Farakaan supporter. Listen to the Wright sermons that are circulating on the web and in the media, it's horrifying to watch, he rails on America, white, Hillary Clinton, etc. It's disgusting. THIS is the man Obama calls his "mentor" and "close friend of over 20 years"??? This is the man who married Barack and Michelle Obama and baptized their children? YIKES.
Obama is so OVER.
Posted by: John | March 14, 2008 2:21 PM
Why don't we learn from our mistakes? We elect a Republican, they give away all our tax money to the richest among us, run up massive debt and deficits, and cause a recession. Then we get a Democrat in the White House, who makes the richest among us pay their fair share, pays down the debt, erases the deficits, and gives us a strong economy. Then for some reason we elect a Republican whose policies cause another recession! We need to learn: massive debt and deficits are not good for the economy! You can't cut taxes for the rich and expect to have a strong economy, it's never happend and it never will. Supply-side, trickle-down Republican economics have never worked. Let's learn from our mistakes.
Posted by: Paul | March 14, 2008 2:23 PM
Bush doesn't know what a recession is...he and his friends have their millions to keep them warm. They have no clue how the rest of us live. $5.00 a gallon for gas would mean nothing to him.
Posted by: lochnessmonster | March 14, 2008 2:27 PM
70% of economists surveyed said recession. That would also include the best of them all Warren Buffet.
Bush was absolutely embarrassing today. He was clearly the dumbest guy in the room.
Posted by: Logic Prisoner | March 14, 2008 3:32 PM
Obama's "pastor" Jeremiah Wright is an avowed anti-white, anti-semitic, pro-Farakaan supporter. Listen to the Wright sermons that are circulating on the web and in the media, it's horrifying to watch, he rails on America, white, Hillary Clinton, etc. It's disgusting. THIS is the man Obama calls his "mentor" and "close friend of over 20 years"??? This is the man who married Barack and Michelle Obama and baptized their children? YIKES.
Obama is so OVER.
Posted by: John | March 14, 2008 2:21 PM
Johnny Squarepants,
You might want to check out your own Republic Party glass house before you start throwing stones.
I wonder if the Republic Party is still considering a McCain/John Magee ticket for this fall?
http://www.crooksandliars.com/2008/02/28/pastor-john-hagee-endorses-mccain-donohue-freaks-out/
...or the Republic Party could run a McCain/Rod Parsley ticket...
http://www.motherjones.com/washington_dispatch/2008/03/john-mccain-rod-parsley-spiritual-guide.html
Posted by: John Hussein E | March 14, 2008 3:32 PM
More slobber from the Swamp's favorite buffoon, Demented Johnnny E:
Johnny Squarepants,
You might want to check out your own Republic Party glass house before you start throwing stones.
I wonder if the Republic Party is still considering a McCain/John Magee ticket for this fall?
http://www.crooksandliars.com/2008/02/28/pastor-john-hagee-endorses-mccain-donohue-freaks-out/
...or the Republic Party could run a McCain/Rod Parsley ticket...
http://www.motherjones.com/washington_dispatch/2008/03/john-mccain-rod-parsley-spiritual-guide.html
Posted by: John Hussein E | March 14, 2008 3:32 PM
Posted by: John D | March 14, 2008 4:52 PM
Geographically Ignorant Dumb Dumb Little Johnnie Dyslin, "the Joseph Stalin of Streamwood", why are you being a coward and attacking the sources in John Hussein E 's post rather than be a man and debate the FACTS that exist within the articles that he linked to?
Or are you too busy trying to push the island of Cuba a few hundreds miles to the west so that it will finally be in the Gulf of Mexico instead of its true location the Caribbean Sea?
BTW we're all still waiting for you to PROVIDE PROOF that John Edward's suits cost as much as Dubya's suits. Linking to a magazine article that says Edwards buys "expensive suits" doesn't cut it. After all you've had MONTHS to back up your allegation - so WHY HAVEN'T YOU?
Posted by: BC | March 14, 2008 6:19 PM
Another Frank James error: "But the Journal is also known as one of the straightest-shooting and informed publications around when it comes to economic." Economic, what, Frank? Nice fragment there. Also, it is better to write or say, "also is known as one..." rather than "is also known."
Frank also seems to be learning well from Bill "I love recessions" Neikirk.
Perhaps we are in a recession. Certainly, if we aren't, then we are on teetering on one. But if we do go into recession, that will actually be more bad news for the Tribune as advertising revenue drops in recessions and the Tribune cannot afford more revenue drops. That goes for the Trib's reporters too.
Posted by: John D | March 14, 2008 2:17 PM
___________________________
Having run out of ways to defend the worst vice president in the history of the universe, dyslien finally cannot help himself but to start quibbling over typos that he can't prove weren't the result of an intern editor rather than a busy blogger. But I'll still take a few typos over the massive crimes and fraud committed against America by the morally and intellectually bankrupt war criminals currently ruining the lives of every American with their ruinous economic policy.
Posted by: rncbs | March 14, 2008 6:45 PM
"IT'S 6PM AND NO IMMUNITY"
NO ROSE GARDEN SPEECH.
CABLE ONLY AMERICA, CABLE ONLY. IF YOU DIDN'T CATCH MY "DELIVERENCE" SPEECH TODAY, THEN YOU DIDN'T PAY YOUR CABLE BILL.
NO ROSE GARDEN SPEECH. NO IMMUNITY, NO LIABILITY PROTECTION, A SENATE WITHOUT A CLEAR-EYED REALISTS VIEW ON "TRIAL LAWYERS"
THEN THE HELL WITH YOU ALL.
FOR SEVEN YEARS, RESOLUTION, AFTER RESOLUTION. VETO, AFTER VETO. 200 POINTS DOWN ON THE STOCK MARKET. THEN THE HELL WITH YOU ALL. GO ON "SPRING BREAK"
I'LL APPOINT JUDGES AND LAWYERS. I'LL RAISE THE "THREAT LEVEL" FOR THE SAKE OF KEEPING THE WORLD FREE AND AT&T / VERIZON WIRELESS, VONAGE, SPRINT, SW BELL FROM BEING SUED.
I DID IT BEFORE, I WILL DO IT AGAIN.
GO BUY SOME GAS FROM MY DADDY. I DON'T CARE. HOW DARE YOU MADAME SPEAKER.
"LONG LIVE NANCY PELOSI"
Posted by: Roger Morris | March 14, 2008 6:59 PM
*****
No, Bush won't say recession because he'd rather do what he does best, LIE...
Posted by: John Hussein E | March 14, 2008 1:17 PM
Actually, JohnEeEeE-Boy,
If Duh'bya said there was a recession that would make him a liar. We are not in a recession.
A recession is a term with a very specific meaning. It means negative GNP numbers – i.e. an actual shrinkage of the GNP - for two or more quarters. We, on the other hand, have had positive GNP growth for the past two quarters – even though it’s been slower than before. But a slowdown does not equal a recession.
This is not to say that we won’t see a recession in the future. It’s just that it isn’t here yet, if it is coming. It was actually a good idea for Duh’bya not to suggest we are in a recession, especially when we aren’t, because we don’t need to scare ourselves into one if it can be avoided.
Posted by: John W. | March 14, 2008 7:03 PM
Oh Perpetually Stupid BC, still harping about John Edwards and his $3,000 suits to go with his $1,000 haircuts? And still clueless about Cuba and the Gulf. I've provided repeated links proving you wrong on that one. And, hmmm, Perpetually Stupdin BC, funny that while I was in the Florida Keys this week, historical info there cites Havana, Cuba as a Gulf of Mexico coastal city!!
But here are some links again (and like the 20th time I've had to do this!!):
http://ipsnews.net/news.asp?idnews=36356
And, from a Havana, Cuba newspaper:
http://havanajournal.com/business/entry/more-countries-drilling-for-oil-northwest-of-cuba-in-gulf-of-mexico/
http://www.1planet1ocean.org/html/cuba_gom.html
http://www.britannica.com/eb/article-9109733/Gulf-of-Mexico
Not sure why I waste more of my time on someone so incredibly stupid and ignorant, but maybe this time BC will learn, though I highly doubt it.
Posted by: John D | March 14, 2008 7:21 PM
John W is the only one who seems to know what a recession is on this blog. What some economists are saying is that in their opinion, this is the opening stage of a recession. In other words, later in the year, we may look back and say this was the start of a recession, but to call it that now without two consecutive quarters of declining growth is premature. That is likely why Bush wont "admit" we are currently in a recession.
We have gone through recessions before and we will go through them again. The market corrects itself, be it with overinflated .com stocks or with housing prices, there will be an inevitable backlash. The sky is not falling, capitalism is not doomed, and the US will get through this just like it has in the past.
Posted by: Herbie H. | March 14, 2008 7:55 PM
Herbie H: Amen!!
Posted by: John D | March 14, 2008 9:37 PM
BC,
Whatever you do, don't crank John D'mime up on propane for coolant. He just won't shut up about it once he starts.
Posted by: C.Hussein.Morris | March 14, 2008 9:47 PM
Thanks Herbie,
[And not just for saying I knew what a recession is.] You were right about the rest too.
That is not to say we won't have trouble, though. Having the FRB attempt to bail out the economy sounds suspiciously like what it did after the stock market crash of '29. Some believe that bail out effort then caused the depression to last longer than needed because the availability of cheap money kept in abeyance the liquidation of bad debts and other necessary economic corrections. Your thoughts?
Posted by: John W. | March 15, 2008 1:37 AM
A recession is a term with a very specific meaning. It means negative GNP numbers – i.e. an actual shrinkage of the GNP - for two or more quarters. We, on the other hand, have had positive GNP growth for the past two quarters – even though it’s been slower than before. But a slowdown does not equal a recession.
This is not to say that we won’t see a recession in the future. It’s just that it isn’t here yet, if it is coming. It was actually a good idea for Duh’bya not to suggest we are in a recession, especially when we aren’t, because we don’t need to scare ourselves into one if it can be avoided.
Posted by: John W. | March 14, 2008 7:03 PM
W.
Yeah....and if you wait until the thunderstorm is officially over your head to announce it is here, you would have already missed it and summer officially starts on June 21 but technically that would be to late.....do you get my drift?
As usual, in a court of law you would be correct but in the court of public opinion you sound crazy.
Case closed.
You lose...again.
No wonder Repugs never have the answers as to how to fix their own screw ups, they don't have the foresight to look at the possibilites outside of their own little ideological bubble.
Go back out on your porch and yell at speeding cars, grandpa.
Posted by: John Hussein E | March 15, 2008 2:23 AM
You deadenders are right on again. It's not a recession -- despite what the economists are saying -- it's merely a lousy economy. Thanks for clearing that up. Bush is indeed the greatest president in history.
Posted by: a blinkin | March 15, 2008 3:36 AM
Not a recession , it is worse . Bailouts piling up more debt . If they continue with these bailouts , the U.S. dollar will will completely worthless , That would lead to a total collapse .
Posted by: pete | March 15, 2008 8:25 AM
C Hussein Morris and B Hussein C: The quicker you folks insert a propane tank into your ac unit, the better off mankind will be. And, please hook up John E and John Chuckman too!
Posted by: John D | March 15, 2008 12:56 PM
*****
Posted by: John Hussein E | March 15, 2008 2:23 AM
JohnEeEeE-Boyy,
What a gloomy outlook you have! I wonder if it comes from all the guilt and hatred you consume with all the political propaganda you eat.
This isn’t a question of possibilities. It’s a question of what’s happening now. What’s happening now is not a recession; and saying so isn’t just a matter of nearsightedness or optimism. It’s a matter of fact. Until we register indicators showing that we have GNP contraction – which we haven’t had yet – it is premature to call our economic phenomenon a recession. Call it a slowdown or beginning to stagnate, but saying it is a recession now is simply wrong.
I do not know what you do for a living, but I certainly hope you have no connection to the medical field. Your pessimism would prompt you to have people pronounced dead for being asleep.
Posted by: John W. | March 15, 2008 2:01 PM
I do not know what you do for a living, but I certainly hope you have no connection to the medical field. Your pessimism would prompt you to have people pronounced dead for being asleep.
Posted by: John W. | March 15, 2008 2:01 PM
John W Bush,
This case is closed!!!
You lose.....again.
Posted by: John Hussein E | March 15, 2008 3:49 PM