"economy failed to grow for the first time in 117 months"
February 1, 2001 8:35 AM   Subscribe

Before the revisionists get all crazy, it should be stated that a recession is typically defined as 2 consecutive quarters with negative growth.

We are not currently in a recession, however much the fearmongers screech to the contrary. (On Morning Edition today, two people were actually bickering about whether we were in a 'mild recession' - to which I could but reply, "Shut UP!", scaring both my radio and my cats.)
posted by gsh at 8:40 AM on February 1, 2001

The greatest part is that GWB and company have been talking the economy down like crazy so BillC gets the blame and he gets the praise when we (inevitably) rebound.
posted by owillis at 10:19 AM on February 1, 2001

I don't understand why Bush and Cheney are so comfortable using the word "recession." You'd think they would stay away from it for fear of eroding consumer confidence even further.

If we do enter a recession at the onset of the Bush administration, no one's going to blame Clinton for it. Considering how many people don't want to give Clinton credit for anything, much less the economy, I'd love to hear theories on why the economy was bad before he took office, good while he was in office, and lagging upon his departure. Did he make some kind of deal with Satan (or somebody more important, like Alan Greenspan?).
posted by rcade at 10:46 AM on February 1, 2001

Good article in Slate from last month on this very subject. It basically posits that Bush IS trying to erode consumer confidence in order to increase support for his trillion-dollar-plus tax cut.
posted by zempf at 10:56 AM on February 1, 2001

Sorry but if you take economics 101 you will quickly learn the the economy is not as quickly changed as you may think.

In other words, it didn't suddenly rise when Bill took office and fall when he left. It simply doesn't work that way.
posted by gtr at 11:05 AM on February 1, 2001

gtr: econ 101 primer, please.
posted by allaboutgeorge at 11:07 AM on February 1, 2001

posits that Bush IS trying to erode consumer confidence in order to increase support for his trillion-dollar-plus tax cut.

Wow, that makes a ton of sense. Slow the economy down, so tax revenues decrease, and then - because of that - cut taxes! Perfect! What a great way to fund the government. Then, because of budget starvation, you can start killing off all those really expensive programs you hate, like aid to overseas family planning organisations, or the EPA, or just about anything but the various military and paramilitary organisations...

-Mars, feeling bleak today
posted by Mars Saxman at 11:19 AM on February 1, 2001

The signs of economic slowdown were visible nearly a full year ago for people who wanted to see them. They had little or nothing to do with Clinton, Bush, the protracted election debacle or any of the easy scapegoats that so many media pundits want to flog. As early as last July, even mainstream people like Bill O'Reilly were even telling us that this was coming.

As for consumer confidence, it is doing fine and well eroding on its own, and the chief reason is energy. People in the colder parts of the country are being hit with heating bills that are double and triple what they were last year. Californians still are without resolution of their electricity crisis. Everyone is still paying more for a gallon of gas than they were a year (and especially two years) ago.

Higher energy costs have a dual effect: people have less money to spend on other needs, and prices for many products go up. That's a perfect recipe for stagnating an economy. People will hold out on major purchases (like durable goods, a great market indicator, btw) because there's no option but to pay the gas/oil bill in January, and buying food.

So long as the market can hold out without a dramatic tumble, we should see improvement once the weather warms up and California has a significant announcement of resolution to their problem.

Or so I think. But what the hell do I know? I was a psych major, I only took one 100-level econ course.
posted by Dreama at 11:22 AM on February 1, 2001

One of Bill Fleckenstein's typically astute comments makes sense here: along the lines that "if what we've just had is a bubble, then what we're about to see is the aftermath of a bubble, not a soft landing or a hard landing."

And another one: "Historically, recessions have not been understood until we have been well into them, and even if this one has been going on for a few months, which is what I believe, it's still pretty early for folks to recognize it."

posted by holgate at 11:59 AM on February 1, 2001

One point those bickering economists made is that tax cuts are a very poor way to stimulate an economy. Sort of like trying to turn a supertanker by encoding your orders as a crossword puzzle, training a monkey to hand-carry the crossword puzzle to the stern and hoping that the sailor on duty has the patience to make friends with the monkey, solve the puzzle and turn the ship.
posted by rodii at 12:38 PM on February 1, 2001

That's a very good analogy :)
posted by sonofsamiam at 1:04 PM on February 1, 2001

Good analysis, Dreama, but FYI, Bill O'Reilly is not "mainstream people."
posted by kevincmurphy at 2:12 PM on February 1, 2001

Kevin -- he's mainstream in as much as he's not strictly an econ flack who talks in "industrial averages" and probabilities and NASDAQs and indices and so forth. He's widely watched, heavily read and reasonably well-known (at least in those areas where people get Fox News) so in that regard. . .
posted by Dreama at 7:40 AM on February 2, 2001

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