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Here is the current definition of recession: "a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters."
This definition worked fairly well when economic growth and employment were fairly well correlated. So the recessions ended for both the rich and the rest of US at the same time. Since the 1990 recession, jobs have taken much, much longer to rebound from recessions than GDP.
By this definition the current "recession" ended in June, 2009. The banks and Wall Street are doing very well, and the incomes of the 1% are at record levels. The "jobs" recession is still going on as we are still below 2007 employment levels.
My personal opinion is that the definition of recession is important for the simply reason that the only contact the elites have with America anymore is through government statistics. So it is important that government statistics paint a fair picture of conditions in the country.
So how would you change the definition?
The current U6 unemployment rate is 13.6% Using a percentage for recessions would that work?? Or should we redefine it similarly to the GDP definition....two consecutive quarters where employment exceeds the previous high. I personally would adjust it for population growth through births and immigration.
Any thoughts on revising this economic data to better reflect what economic conditions for the 99%.
PS. The terms 1%, 99%, elites, Wall Street are for illustrative please don't go off on a tangent. Thanks.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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While the middle class is shrinking, it's still a large number of people that are still in the "99%" who are doing just fine, and a lot better than in the 2008 recession. Homes in middle class communities have been selling in a few days with multiple offers, companies (such as Amazon in Seattle) are building new offices and hiring thousands of new people. New cars are flying off the lots. The people buying Ford, Hyundai, and Kia are not in the 1%. Defining a recession strictly on the basis of the unemployment rate is too narrow. Perhaps the current definition is also lacking, but if there was a recession in December 2008 and you compare to December 2013, there are big differences. The U-6 rate then was the same at 13.6 but there is now a lot more prosperity by those in the 99% that are employed full time.
There is nobody wealthier than a man with a good job in the middle of a Depression.
I like you live in Washington state, the recession was much milder than the rest of the US and the recovery came much earlier. We have been traveling for the past four years and this economic downturn is much worse outside of Washington state. The southern San Joaquin Valley of California reminded me of those movies about the depression. They are getting somewhat better elsewhere in the country, but we still are in much better shape than the rest of the country.
However, I did notice I had friends who were still working but took substantial pay cuts and hours worked. So they only showed up on the U6.
I am looking for metric that will display the economic effects on the average American better than the classical definition of a recession focused on GDP. It does not look like that works very well.
Maybe the average income trends measure that better? Those have continued to show continuing downward trend throughout this "recovery".
Here are the U6 rates from the BLS. They bottomed out at 7.6% in October, 2006. The current U6 rate for Los Angeles County is over 20%.
While the middle class is shrinking, it's still a large number of people that are still in the "99%" who are doing just fine, and a lot better than in the 2008 recession. Homes in middle class communities have been selling in a few days with multiple offers, companies (such as Amazon in Seattle) are building new offices and hiring thousands of new people. New cars are flying off the lots. The people buying Ford, Hyundai, and Kia are not in the 1%. Defining a recession strictly on the basis of the unemployment rate is too narrow. Perhaps the current definition is also lacking, but if there was a recession in December 2008 and you compare to December 2013, there are big differences. The U-6 rate then was the same at 13.6 but there is now a lot more prosperity by those in the 99% that are employed full time.
Yep middle class has always been defined as a standard of living. what is middle class now is far beyond what was in 1950's when have shelter ;having enough to eat was pretty much it. Now we need enough excess to eat out; want luxuries in a home plus adult toys.
No, we need to bring back "Depression," which the media has avoided. We were definitely in one the first several years since the economic collapse of 2008. Characteristics: excessive and prolonged unemployment, check. Declining asset values, ESP. Real Estate, check. Low interest rates, still little borrowing, check. Almost no construction besides government, check.
Here is the current definition of recession: "a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters."
This definition worked fairly well when economic growth and employment were fairly well correlated. So the recessions ended for both the rich and the rest of US at the same time. Since the 1990 recession, jobs have taken much, much longer to rebound from recessions than GDP.
By this definition the current "recession" ended in June, 2009. The banks and Wall Street are doing very well, and the incomes of the 1% are at record levels. The "jobs" recession is still going on as we are still below 2007 employment levels.
My personal opinion is that the definition of recession is important for the simply reason that the only contact the elites have with America anymore is through government statistics. So it is important that government statistics paint a fair picture of conditions in the country.
So how would you change the definition?
The current U6 unemployment rate is 13.6% Using a percentage for recessions would that work?? Or should we redefine it similarly to the GDP definition....two consecutive quarters where employment exceeds the previous high. I personally would adjust it for population growth through births and immigration.
Any thoughts on revising this economic data to better reflect what economic conditions for the 99%.
PS. The terms 1%, 99%, elites, Wall Street are for illustrative please don't go off on a tangent. Thanks.
I see no reason. Employment or lack of it is part of the equation, but overall productivity is the key number. We of course are seeing more wealth inequality throughout the world. And I believe this to be inevitable with basic capitalism. The most important decisions right now should be how to best augment the poor and middle classes if capitalism doesn't do it naturally.
No, we need to bring back "Depression," which the media has avoided. We were definitely in one the first several years since the economic collapse of 2008. Characteristics: excessive and prolonged unemployment, check. Declining asset values, ESP. Real Estate, check. Low interest rates, still little borrowing, check. Almost no construction besides government, check.
The reason economists have agreed upon a definition with numerical parameters is precisely to avoid the kind of vague, amorphous, and subjective definition like the one you propose above. Using yours, we can advance meaningless arguments all day long as to whether or not there was a "depression" following 2008. Let's take a look at your parameters:
1. Excessive unemployment. Exactly how much unemployment is "excessive"?
2. Prolonged unemployment. Exactly how long does it have to last to be "prolonged"?
3. Declining asset values. Exactly how far to they have to decline to qualify?
4. Low interest rates. How low and how does a given level make it a depression anyway?
5. Little borrowing. Sure, little borrowing tends to be a sign of slow economic activity, but economic activity is what GDP measures and it does a better job of measuring it.
6. Little building construction. Same comment about economic activity and GDP.
Sorry, each individual doesn't get to just redefine words to suit his or her own emotional state of the moment.
its all 1984 thinkspeak. the economy is bad. we exported most of our industry.
we are living on credit. 46% of the population works. this is going somewhere.
please dont tell me we dont need to count the 54% that do not work bek they are "exempt".
buddy in china nobody is exempt.
everybody works.
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