Not A Recession Yet…
April 30th, 2008 at 12:42pm Matt Margolis
Despite all gloom and doom predictions, our economy grew last quarter, albeit slightly, thus indicating that while the economy has slowed down, we have yet to enter into a recession. Of course, the technical definition of a recession is two consecutive quarters of negative growth, so, all you liberals hoping and praying for the economy to tank didn’t get what you wanted.
That said the report isn’t all good news. The real lingering question is what is Congress going to do to prevent a recession and speed up the economy again. Unfortunately, given that it is a presidential election year, I am not confident the Democratic Majority is even interested in doing anything that will move the economy in a positive direction. Their standard operating procedure is to propose crippling tax hikes, not more tax cuts — which brought our economy out of the Clintonian recession and into the longest record of economic growth in history.
Entry Filed under: Economy
28 Comments
1. Rana Quijotesca | April 30th, 2008 at 1:40 pm
now, when you say that liberals want the economy to tank, are you basing this on empirical evidence… or are you basing it on some sort of hallucination caused by a combination of kool-aid and your foil hat being too tight?
2. OhioOrrin | April 30th, 2008 at 1:59 pm
ooo ooo I know -
lets borrow more $ from the chinese then…
use it to buy imported toxic chinese crap and…
call it consumer choice while US jobs & tax payer subsidized profits go back offshore!
oh wait, what am I thinkin (doah)?
that’s the OLD ECONOMY. of course, the economy where steel, cars, n refrigerators aren’t made anymore !?!
and the OLD ECONOMY jobs were replaced by $10/hr warehouse jobs w no bennies which are sooo much better 4 us all !
oh wait, what am I thinkin (doah)?
everyones gonna be a rocket scientist, brain surgeon, or software engineer!
yeaaaaaaaaaa!
no I got my ck in hand & I’m lookin 4…
…toxic chinese crap!
3. Just Another Taxpayer | April 30th, 2008 at 2:05 pm
Really,
It’s not a recession. And all the foreclosures have stopped, Mr. Noonans loss of 100k in equity has on his home has dissapeared along with everyone elses , and all the jobs lost over the last 3 months have suddenly reappeared, consumer sentiment is now not the lowest in 26 years, the march decrease in home prices hasn’t brought the housing market to its worst condition in 20 years.
I think Bush said it best yesterday when he said (trying to avoid using the R word) that “it doesn’t matter what you call it”, people are hurting.
For once Bush is right.
4. Parker | April 30th, 2008 at 2:18 pm
That said the report isn’t all good news.
I guess a 0.6% growth in GDP is good news…
The real lingering question is whether the upcoming economic stimulus package will have any effect.
I truly hope so.
5. Bigfoot | April 30th, 2008 at 2:36 pm
which brought our economy out of the Clintonian recession and into the longest record of economic growth in history.
The longest record of economic growth in history is not the period we’re now in. That superlative belongs to the growth period that started in mid-1991 and continued until early 2001. Of course, if we pull out of the present troubles, the current period (which is now the 4th longest ever) could eventually become the longest, but we are not there yet.
(The recession of 2001 occured after Bush took office, but before he enacted his policies, so the term “Clintonian recession” is still correct.)
now, when you say that liberals want the economy to tank, are you basing this on empirical evidence
I’ll offer some evidence. One of the biggest drags on the economy these days is the cost of gasoline and diesel, which have been rising for several years. One way to put downward pressure on the price of oil and its products is to allow supply to increase with demand, which would entail opening more of our domestic and offshore oil fields to drilling. See any liberals advocating this? Neither do I.
Likewise, another drag on the economy is rising food prices, an unintended consequence of our misguided ethanol mandate. Do you see Pelosi, Reid, Murtha, etc., saying, “This was a mistake, let’s get rid of it”? Again, neither do I.
On the other hand, a week or two before their controversial Iwo Jima tree cover, Time (hardly a bastion of conservatism) had a cover story about the negative effects of the ethanol mandate. So maybe there’s hope.
6. Canadian Observer | April 30th, 2008 at 3:18 pm
The economy is just one more failure of the Bush presidency.
This individual has wrought more damage to the America people than any terrorist could dream. They must love the guy.
I wonder if James Allegra has gone into hiding as he never posts his mantra - “God bless George W. Bush, the greatest President in American history” anymore. Change of heart, JA?
7. js | April 30th, 2008 at 3:24 pm
“Likewise, another drag on the economy is rising food prices…”
shoot, food prices are increasing as fast as fuel is…it dont take much grain products to make pepsi, yet pepsi product has increased over 50% in the last 60 days…get that, the economy is being played for suckers while the rich get richer…about the only think that doesnt cost more these days is stupidity, and you get that for free from TV!!
8. js | April 30th, 2008 at 3:25 pm
6. Canadian Observer | April 30th, 2008 at 3:18 pm
The economy is just one more failure of the Bush presidency.
—————————–
actually, the economy was doing just fine until the 06 elections when the Demoturds lied thier azzez off to get elected…now the economy is tanking….
9. DBM | April 30th, 2008 at 3:52 pm
Damn, Bigfoot, that’s a pretty selective memory you have there. Ethanol is a democrat program?
Let’s play “Name that Quote”:
Quote #1
Quote #2
The fact is that there’s enough blame to go around on both sides of the aisle on our energy policy. The Republicans could have had ANWR if they had given up on CAFE. And CAFE could have done *alot more, more quickly* than ANWR.
Politicizing the issue only perpetuates the problem.
10. RickRoll | April 30th, 2008 at 4:01 pm
“actually, the economy was doing just fine until the 06 elections when the Demoturds lied thier azzez off to get elected…now the economy is tanking….”
That is rich ,js. A bold face lie but rich nonetheless.
11. Danish Artist | April 30th, 2008 at 4:07 pm
Speaking of Ethanol:
You do know that food prices are rising around the world. If you’re paying attention you will know that much of this is caused by the heavy subsidies the federal government pays to farmers who grow corn and maize for ethanol production. It has been several years since any new acreage has been planted in corn for food in this country. Well … I just thought you might like to know just who it was in the United States Senate who broke a tie on a Senate vote to prevent an EPA mandate for ethanol. Louisiana Democrat Senator Bennett Johnson tried to prevent that mandate from becoming law. He said that American consumers would need a few extra bucks to pay for their corn flakes every morning if the mandate made it through.
Now .. here’s what you don’t know. The Senate was tied 50-50 on the bill to prevent the EPA from going forward with the ethanol mandate. The tie had to be broken, and it was, by the President of the Senate. The bill was defeated and the EPA was allowed to proceed with the mandate. That was 14 years ago. Now we have these increasing food prices.
Who was the President of the Senate that broke the tie and led the way to ethanol mandates?
Al Gore.
Finally, somebody in DC is addressing the fact that ethanol production may have something to do with the increase in world food prices. Gee, ya think? I wonder what their first clue was.
Just yesterday Condi Rice said, “There has been apparently some effect, unintended consequence from the alternative fuels effort.” Unintended consequences? Food costs rising 8% since 2005 … People, even members of Congress, have been warned for years about the consequences of mandated ethanol production. Then there’s this article from CNN Money dated back to 2006, or this one from almost one year ago warning us about ethanol’s affect on food costs. Still not convinced? Go back to the 2004 election where ethanol was a really nice talking point for politicians. The New York Times even pointed out the problem of rising food prices due to mandatory ethanol production in January of 2006.
To give you one more piece of information, take a look at this article printed in the Science Daily back in Aug. 8, 2001. Here is what scientists have known since years:
The approximately $1 billion a year in current federal and state subsidies (mainly to large corporations) for ethanol production are not the only costs to consumers, the Cornell scientist observes. Subsidized corn results in higher prices for meat, milk and eggs because about 70 percent of corn grain is fed to livestock and poultry in the United States Increasing ethanol production would further inflate corn prices, Pimentel says, noting: “In addition to paying tax dollars for ethanol subsidies, consumers would be paying significantly higher food prices in the marketplace.”
Back in 1994 when Al Gore cast the tie breaking vote in the Senate that led to a methanol mandate from the EPA we were told that “the price of corn flakes isn’t going to go up by one penny.” Hind sight truly is 20-20.
Liberals are truly responsible for the skyrocketing food and fuel prices. You DBMasses can deny it all you want, but reality conflicts with your fantasy.
12. Kahn | April 30th, 2008 at 4:32 pm
Rana, I would base that assumption on the hours and hours and print lines and print lines of propaganda that seems designed to undermone confidence published by left leaning (vast majority) of “news” organizations.
But whatever. It is probably very difficult to see that from your thoroughly indoctrinated skull.
13. DBM | April 30th, 2008 at 4:48 pm
Danish Artist,
The point of my post is that Ethanol programs are neither republican or democrat. Support has appeared in every presidential budget since the 70’s. Congress has repeatedly perpetuated them. Both parties have been enablers because both parties a) love the trough of public subsidies and b) have ambitious candidates who have to go through Iowa to be elected.
Gore broke the tie. But there wouldn’t have been a tie if 18 republicans hadn’t voted with him. Incidentally, 25 democrats voted nay. A cursory scan of the roll call will reveal a pattern totally independent of party affiliation; your vote was more a function of whether you were from a corn-producing state, an oil producing state, or had presidential ambitions.
McCain, god bless his anti-pork heart, voted against it in 1994. But that was then. Now that he needed Iowa in his presidential bid, he’s for it again. As someone who’s anti-ethanol, anti-pork, and pro small government, I miss the old McCain. Wonder where he went.
14. Sunny | April 30th, 2008 at 4:54 pm
js | April 30th, 2008 at 3:24 pm
shoot, food prices are increasing as fast as fuel is?it dont take much grain products to make pepsi, yet pepsi product has increased over 50% in the last 60 days?get that, the economy is being played for suckers while the rich get richer?about the only think that doesnt cost more these days is stupidity, and you get that for free from TV!!
You must watch a lot of TV, js.
15. djp | April 30th, 2008 at 4:54 pm
“which brought our economy out of the Clintonian recession and into the longest record of economic growth in history.”
This is an absurd claim. First the “Clintonian” Recession? What are you talking about? You were probably like 15 at the end of the Clinton presidency, so you are unfamiliar with experience of the economy then. But most economic stats show that the economy from 93-00 performed pretty well, and the recession you refer to, I think in late 2001, was literally the most mild in recent history (certainly the most mild in the last 30 years). Oh and tax cuts brought us out of it? It was LONG over before the 2003 cuts. If you look at what brought the “economy out of it” certainly it was easy money. Fed funds was 1% by 2003 and 2004 before they started raising again. Oh and all that easy money is coming home to roost now. Furthermore, it is certainly disengenous to call today the longest period of growth in history. If you cut rates to close to zero, you will get an asset bubble and that is what happenned, but its not growth.
16. Sunny | April 30th, 2008 at 4:56 pm
“Back in 1994 when Al Gore cast the tie breaking vote in the Senate that led to a methanol mandate from the EPA . . .” Danish Artist
Refresh my memory Danish, who had control of the Senate and House in 1994.
17. Just Another Taxpayer | April 30th, 2008 at 5:14 pm
Danish Artist,
Interesting, if lengthy post. But in your attempt to pass off ethanol as something the dems are responsible for, you forgot to explain why the republicans, in charge of the legislative branch for 12 years, along with the exec for the last 6 years, didn’t simply repeal it.
Your attempt to pass off ethanol on the dems is like Bush supporters passing off responsibility for 9/11 to Clinton. At least he tried. What did Bush do to reign in Bin Laden during the 9 months he was in office before 9/11? Why didn’t Bush make getting him priority 1 since he was so dangerous?
Republicans could’ve made drilling ANWAR part of their energy policy. They failed to.
Bush and the republicans are responsible for the policies that lead us to where are economicly. No amount of of PR is going to overcome what people see at the pump, or the local grocers every day.
18. SEW | April 30th, 2008 at 5:33 pm
Thanks Sunny for the question.
Senate
Dems 57 Republicans 43
House
Dems 258 Republican 176
President Clinton [D]
19. Percy Beezer | April 30th, 2008 at 5:53 pm
That’s why liberals don’t understand economics; they can’t add. Mr. Bush was in office 7 months and 19 days, not nine months on 9/11/01. The Clinton recession began in Q3 of 2000 when GDP went negative, and again in Q1 2001 before Mr. Bush took office; it only went negative once Q3 2001 after Mr. Bush took office.
20. DBM | April 30th, 2008 at 6:07 pm
SEW,
Thanks for the data to help me drive my point home. 56% of Democratic senators voted for the ethanol mandates. 42% of the Republican senators voted the same way.
Ethanol is not a liberal vs. conservative.
It’s not Democrat vs. Republican.
It’s about:
1) Both parties looking at the Federal budget as a big trough. They only disagree on who gets to feed.
2) The political environment being so toxic and polarized that neither party has the courage to advance good policy over good politics.
A political candidate can’t be against Ethanol, or they risk never getting past Iowa. A political party can’t be against Ethanol because it is sounds so good politically (”reduce dependency, offset high prices of gas, blah, blah, blah). No one has the courage to say that it’s bad policy because in this climate the worst thing is not that you spend money on stupid policy: the worst thing is that you lose power.
And the discussions (if I dare call them that) on this Blog are a microcosm of what’s wrong. It’s more important to lay blame solely on what party or one category of label than to fix the freaking problem
Guess what? Both Democrats and Republicans F’ed up on Katrina. Both Democrats and Republicans are responsible for the bloated federal budget. Neither Clinton or Bush gave adequate attention to the threat of Al Qaeda.
We’re all looking backward and assessing blame, instead of looking forward to climb out of the mess we’re in. It’s okay to disagree philosophically on the solutions, but the venom has to stop. It only serves to have people dig themselves further into the trenches. And the visibility isn’t too good down there.
21. neocon | April 30th, 2008 at 6:49 pm
DBM,
I concur completely with your post. However I place more blame on the republicans for our bloated spending. They were sent in 1994 to correct that very problem, instead they ultimately made it worse.
22. Rana Quijotesca | April 30th, 2008 at 8:10 pm
Hmmm… there was at least one ad hominem in there… but I’ll let the moderators get rid of that (*snicker*).
Seriously though… ANWR is only a temporary solution… Even with ANWR being drilled to its full potential, it will only last about 50 years given current growth patterns in the demand for gasoline and petroleum products. It will also not make that much of a dent in global oil supply, and therefore not reduce prices as much as you think it will…
What you guys are forgetting is the fact that there are two components to prices… There is supply, and there is demand. Various Republicans have axed cafe standards and made it so jackasses who went to my high school got to joyride in pick-ups that got 13 mpg. If we raised CAFE standards to a level that is comparable to most other nations (phased in, of course), then demand for petroleum in general would plummet… If you want to see the price of oil fall… that’s how you do it…
If you want to try to play “gotcha” with me on economics, bring it…
23. OperationChaos | April 30th, 2008 at 8:46 pm
I wonder if James Allegra has gone into hiding as he never posts his mantra - “God bless George W. Bush, the greatest President in American history” anymore. Change of heart, JA?
No, CO–he probably got tired of dealing with asshats such as yourself. You, an asshat, have never contributed anything to this blog, just your hate-America crap.
You must’ve taken a few hockey pucks to the head in your life. That is, if you were ever man enough to play. Probably not; ballet is probably your strong suit…
24. OhioOrrin | May 1st, 2008 at 7:45 am
ethanol is macro-stupid.
from seed to tank, ethanol uses more energy than it provides!
and that’s not counting the specialized transport, storage, fire safety, & retail infrastructure which ethanol requires.
stupid is as stupid does…
25. Christian Wright | May 1st, 2008 at 8:01 am
Foreclosure rates have doubled from last year.
Maybe we need a new criteria to determine if an economic cycle is in a Recession/Depression.
How about we don’t look at GNP?
Hw about we look at job loses and foreclosure rates because that is what affects the backbone of America: The Middle Class
http://www.bloomberg.com/apps/news?pid=20601087&sid=acare3gwtAdI&refer=home
26. Dasein Libsbane | May 1st, 2008 at 11:27 am
CW,
We do look at those indicators. The “rule” that two quarters of negative growth constitutes a recession is more of a suggestion. In the Clinton “recession” of 2001-2003 there were no successive quarters of negative growth.
It was pointed out that Q3~2000; Q1~2001; & Q3~2001 were negative but were not successive; but this was still a recession nonetheless.
The key to the current situation is, as the President correctly pointed out, there have been no quarters of negative growth; an economy cannot be in recession if it grows.
27. SteaM | May 1st, 2008 at 1:42 pm
Would it not come down to the value of the dollar?
I am not an economist expert by any means. Just curious.
It seems to me that if the cost of gas and food continues to increase throughout the summer it would have to lead us into a recession. Unless the economy is strong kept alive by the smaller percentage of those who still have money even when/if gas costs $6 a gallon or more to survive without it effecting them.
Then maybe, if there is a severe in the economy where things get really ugly we won’t actually see concrete evidence of it for a long time. Especially if the media ignores it. Out of sight out of mind.
28. Desein Libsbane | May 1st, 2008 at 2:29 pm
Gas and food prices and a continued housing market debacle can and often do cause recessions; inflation combined with unemployment combined with inventory adjustments combined with import/export imbalances etc. etc. etc. can cause the economy to contract into recession. But, and this is key, unless the economy actually contracts at some time it is not recession in the classical sense nor in the common usage of the term.
We have an economic slowdown that is at the edge of a recession; should any of the items listed above push too hard on the economy we will be in recession.
Most economists feel this way, “This quarter is much worse than most people believe, last quarter did better than we expected, the next few quarters will show improvement and the year will end on a positive trajectory.”
Problem is, that’s exactly what economists said in Q1. Think about it.