4 ms·

That definition was only ever a rule of thumb. The fact is, you can't define it. It's like setting a temperature that is officially "cold". The current economic

by tootie 4y ago

That definition was only ever a rule of thumb. The fact is, you can't define it. It's like setting a temperature that is officially "cold". The current economic indicators are almost completely unprecedented in the growth is weak, inflation is very high and yet employment remains historically strong. As much as GDP represents the broadest indicator of economic health, if you're looking for a headline to apply to the masses, it's going to be when we see broad-based negative wealth effects in which case inflation and employment/wages are the most important indicators and they're flying in opposite directions right now. Declaring that this is or isn't a recession is essentially irrelevant. It's officially cold when you feel cold.

s1artibartfast 4y ago
What is a recession if not loss of buying power and material wellbeing? How is more people working for less pay a counterargument against recession.?
- tootie 4y ago
  All things being equal, more people working is a an increase in buying power. The decreased buying power of wages is only negative relative to the amount people being paid a wage. Which itself is a function of both employment opportunity and size of the labor force. The recent rise in inflation is definitely correlated with a rise in wages albeit at a slightly lower rate resulting in a roughly 1% lag in the past year. If you map out wages paid per GDP you can get an idea of how much of a share of economic growth has been going to workers and it's a been a pretty solid, steady decline since 1970: https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun So, that sucks, but it doesn't make a useful definition of recession. This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.
  - s1artibartfast 4y ago
    Im not sure I follow your argument. >All things being equal, more people working is a an increase in buying power. This isnt an absolute. If you have 1 person working for $1/day and go to 2 people for $0.5/day, buying power hasn't changed. You can have more people working, and people working longer, for less and less material goods. I think any meaningful definition of economic growth/recession must address the fundamental question of is there more material goods and wellbeing in a country today than yesterday. I agree that the allocation of those goods is a separate question entirely. >This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order. I think that what we are seeing is the start of a realization that part of historic GDP growth was actually a fiction, in that more tangible goods were not produced. This is why a small increase in wages sent inflation through the roof. In theory, US real GDP per capita has gone up 33% since 2000[1]. This looks fine on paper as long as the growth is just accumulating in a bank account. Once people actually try to consume more, it becomes obvious that there isn't 33% more stuff to buy.
NeverFade 4y ago
In the US, the NBER is the institution that calls recessions. The NBER has never once failed to call two consecutive quarters of negative growth as a recession. It's a foregone conclusion at this point. But wait, according to the mainstream media now, we shouldn't listen to the NBER either, they're all just a bunch of "white economists": https://www.cnn.com/2022/06/30/economy/recession-economists-nber/index.html https://www.cnn.com/2022/06/30/economy/recession-economists-...
- weakfish 4y ago
  I mean, CNN is basically the left version of Fox News, it’s not representative of center media.
  - DuskStar 4y ago
    It's closer to the center than the other major news network, MSNBC.
    - westmeal 4y ago
      I upvoted you because downvoting to disagree is dumb, but I disagree, CNN is totally way far left.
      - DuskStar 4y ago
        CNN is indeed way far left. But there are three major news networks - Fox, CNN and MSNBC. Of those, Fox is pretty far right, CNN is far left, and MSNBC is farther left than CNN. https://adfontesmedia.com/wp-content/uploads/2022/01/Media-Bias-Chart-9.0_Jan-2022-Unlicensed-Social-Media_Hi_Res-1200x950.jpg https://adfontesmedia.com/wp-content/uploads/2022/01/Media-B...
  - twoxproblematic 4y ago
    Do you have an example of "center media"? Asking because I earnestly want some of that.

by tootie 4y ago

s1artibartfast 4y ago

What is a recession if not loss of buying power and material wellbeing? How is more people working for less pay a counterargument against recession.?

tootie 4y ago
All things being equal, more people working is a an increase in buying power. The decreased buying power of wages is only negative relative to the amount people being paid a wage. Which itself is a function of both employment opportunity and size of the labor force. The recent rise in inflation is definitely correlated with a rise in wages albeit at a slightly lower rate resulting in a roughly 1% lag in the past year. If you map out wages paid per GDP you can get an idea of how much of a share of economic growth has been going to workers and it's a been a pretty solid, steady decline since 1970: https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun So, that sucks, but it doesn't make a useful definition of recession. This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.
- s1artibartfast 4y ago
  Im not sure I follow your argument. >All things being equal, more people working is a an increase in buying power. This isnt an absolute. If you have 1 person working for $1/day and go to 2 people for $0.5/day, buying power hasn't changed. You can have more people working, and people working longer, for less and less material goods. I think any meaningful definition of economic growth/recession must address the fundamental question of is there more material goods and wellbeing in a country today than yesterday. I agree that the allocation of those goods is a separate question entirely. >This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order. I think that what we are seeing is the start of a realization that part of historic GDP growth was actually a fiction, in that more tangible goods were not produced. This is why a small increase in wages sent inflation through the roof. In theory, US real GDP per capita has gone up 33% since 2000[1]. This looks fine on paper as long as the growth is just accumulating in a bank account. Once people actually try to consume more, it becomes obvious that there isn't 33% more stuff to buy.

NeverFade 4y ago

In the US, the NBER is the institution that calls recessions. The NBER has never once failed to call two consecutive quarters of negative growth as a recession. It's a foregone conclusion at this point. But wait, according to the mainstream media now, we shouldn't listen to the NBER either, they're all just a bunch of "white economists": https://www.cnn.com/2022/06/30/economy/recession-economists-nber/index.html https://www.cnn.com/2022/06/30/economy/recession-economists-...

weakfish 4y ago
I mean, CNN is basically the left version of Fox News, it’s not representative of center media.
- DuskStar 4y ago
  It's closer to the center than the other major news network, MSNBC.
  - westmeal 4y ago
    I upvoted you because downvoting to disagree is dumb, but I disagree, CNN is totally way far left.
    - DuskStar 4y ago
      CNN is indeed way far left. But there are three major news networks - Fox, CNN and MSNBC. Of those, Fox is pretty far right, CNN is far left, and MSNBC is farther left than CNN. https://adfontesmedia.com/wp-content/uploads/2022/01/Media-Bias-Chart-9.0_Jan-2022-Unlicensed-Social-Media_Hi_Res-1200x950.jpg https://adfontesmedia.com/wp-content/uploads/2022/01/Media-B...
- twoxproblematic 4y ago
  Do you have an example of "center media"? Asking because I earnestly want some of that.