Bush: Difficult Times Have Arrived
Months ago we started publishing posts, critical of America’s economy. Immediately some readers accused us of overdoing it. There were some minor issues, but the economy was still quite healthy, and so forth. One problem for these individuals: George W. Bush disagrees with them.
In an appearance in the Rose Garden yesterday, the American president gave an usually stark view of the US economy. He said that the nation is in “very difficult times, very difficult,” adding that there are no “quick fixes.”
“If there was a magic wand to wave, I’d be waving it, of course. But there is no magic wand to wave right now. It took us a while to get to this fix,” the president said.
He didn’t call it a “recession,” but he also didn’t say that the US is not in a recession: “And we’ll let the economists define it for what it is.”
In short: it’s a recession, but he knows that all hell will break loose at the moment he uses that word.
At the same time he accused the Democratic Congress of “being uncooperative on bills that would address pocketbook issues.” Congress immediately hit back “accusing Mr. Bush of trotting out old ideas and of favoring big oil companies at the expense of average Americans.”
Whoever is right isn’t very relevant right now: the result is that nothing is done and that Americans will continue to suffer financially and economically.
Months ago we started publishing posts, critical of America’s economy. Immediately some readers accused us of overdoing it.
Some readers including me. Because you were. And you still are. You said then that the U.S. was in a recession. You were wrong. It was not. Indeed, you do not even seem to know what the basic definition of a recession is, so your insistence on declaring one fails to impress.
He didn’t call it a “recession,” but he also didn’t say that the US is not in a recession: “And we’ll let the economists define it for what it is.” In short: it’s a recession…
To enlighten your obvious ignorance of national income economics, Michael, a recession is two or more consecutive quarters of negative real GDP growth. To date, the U.S. has not had one quarter of negative real GDP growth in the last few years, much less two, yet you keep crowing that the U.S. is "in a recession." Calling a garden hose a snake doesn’t make it one.
Is recession possible? Yes. Are we in one? Not that anyone can show so far using the relevant national income measures that actually define a recession. 2007Q4 showed positive real GDP growth. 2008Q1 showed positive real GDP growth. Are growth figures lower than a year ago? Yes. The economy is certainly in a slowdown, but we already knew that. But a slowdown is not a recession. The U.S. index of Leading Economic indicators is actually up for the first time in several months, as is the coincident index, indicating a bottoming of the downward trend. Lagging indicators also indicate a bottoming has occured, even a reversal of the downward trend. The U.S. economy is weak, but it is not shrinking, and without shrinkage there is no recession.
To claim that the U.S. is in a recession now would require that April have exhibited negative real GDP growth, and that we somehow be Nostradomically assured that at least the next five months will show the same. That’s the minimum requirement. Are you claiming to be psychic? You should play the stock market. Or the horses. Good luck with that. I wish you all the best.
Now, the bad news for you. Except for Spain, European leading and coincident indicators remain on a persistent downward trend. Germany in particular looks weak right now.