I love you, Jon Stewart. If you were not already spoken for, I would very much like to have lots of adorably funny Jew babies with you and all that. Furthermore, I very much appreciate that you try to bring intelligent topics to an audience that likely would not embrace them otherwise, and I particularly like when you keep economists around to help with your analysis.
As such, I am more than a little disappointed that you decided to pull the trite “pretend to fall asleep when talking about economics” gag in order to get a cheap laugh. If nothing else, Bill Maher already did a similar bit on his show back in April:
It’s not enough to make me stop watching, but don’t think for a second that I don’t notice. And no, it doesn’t count as a conspiracy if you’re the one refusing to learn, and if I were his broker I would probably at least consider taking advantage of his willful ignorance as well. 🙂
Anyway…Jon Stewart seems a little perplexed regarding how economists can say that the recession is over:
|The Daily Show With Jon Stewart||Mon – Thurs 11p / 10c|
|The Recession Is Over|
In a lot of ways, Stewart is correct- the National Bureau of Economic Research is the organization that officially decides whether the country is in a recession or not. (Fun fact: it’s also located about a block and a half from where I live. Coincidence?) If you look at the NBER’s site, you will also see right there on the front page that it claims that the recession ended in June 2009. I’m also pretty sure that the NBER’s methods are not so much subject to, um, “partisan chit-chat.” (If nothing else, practically nothing that economists engage in even comes close to any definition of chit-chat.) In fact, the NBER is more than happy to explain how it does what it does in it’s Business Cycle Dating Procedure: Frequently Asked Questions. Nerdy? Absolutely. Partisan chit-chat? Probably not.
The important thing to remember, however, is that a recession is, according to the last textbook I reviewed (yes, that is one of my jobs), “a period of significant decline in output employment.” A recession is NOT “whenever things are crappy from an economic perspective.” This can be made more clear with a graphic pilfered from the aforementioned textbook:
Hopefully it’s a bit more clear now that being out of a recession doesn’t mean that everything is back to normal, it just means that things are no longer getting worse. So yeah, maybe the economy still sucks, but at least it will probably suck less tomorrow. See how that works?
The textbook also gives a historical record of recessions and their durations- it’s interesting to note that even when the NBER counts the recessions as being over in July 2009, the latest recession was among the longest in recent history.