The Recession's Over, Yay! Oh, Wait. What?

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The National Board for Economic Research has declared that the economy hit rock bottom in June of 09, and has been steadily improving ever since. In other words, the recession ended fifteen months ago. Excited by the report, President Obama delivered the good news in a town hall like forum on MSNBC yesterday. However, once the members of the forum pointed out that they have yet to benefit from the so-called recovery, he back pedaled and went into his, “we still have much work to do, but we’re Americans,” mode.

As near as I can tell, unemployment statistics seem to back up the crowd’s assertion that we’re still in a recession. Nationally, unemployment was at 9.6% in June of 09, when the economy began its upswing. However, unemployment didn’t peak at 10.6% until January of 2010. The latest numbers, from June of 2010, list unemployment 9.6% and rising. So, unemployment peaked seven months after the recession supposedly ended, it’s only a tenth of a point lower than when the declared upswing began, and experts are really trying to sell the idea that the recession’s been over for more than a year? It’s a head scratcher, to be sure.

I’ll admit, I was slightly baffled by the inconsistency. Then I found an article in the L.A. Times. In the piece, Mark Zandi, chief economist at Moody's Analytics, explained that June of 09 was sited as the recession’s end because that month saw the greatest number of stimulus dollars, from the Recovery Act, being spent. Well sure, that makes perfect… I mean, that’s a perfectly reasonable…

Wait, the government pumped a one time influx of money into the economy, people bought TVs and sweaters, jobs weren’t created, and THAT signals the end of the recession? The one time boost may have offered a temporary respite to wholesalers and retailers, but they socked the profits away, instead of using the money to employ more people and create an additional base of consumers. Until we create jobs, and enable people to buy goods & services, we won’t be out of the woods.

As for Obama trying to sell the nation a bill of goods on MSNBC, I gotta say, I’m irked by the spectacle. Watching him tell people the recession is over, induced flash blacks of a bomber jacket clad George W. Bush declaring victory in Iraq in 2003. Nobody was dumb enough to swallow that one either.