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No Recession? How About, "No Supporting Evidence"...?
Over the past week or so, some prominent columnists and news analysts have suggested that it's premature to declare that the U.S. economy is in recession.
I found these stories somewhat remarkable -- not because they appear to be contrarian, but instead because "news" can still appear in print based upon a premise that has absolutely no supporting evidence.
In fact, the only real argument they offer is: "economists note that though two main pillars of the economy, the labor market and consumer spending, have faltered, they have not collapsed as they did in past recessions." Which, I guess, is to say that things could be worse...
Don't get me wrong. It's not like I'm cheerleading for more bad news. I've even been known to resort to the "could be worse" argument, if only for the momentary psychological boost it offers. But let's be realistic about the scale of the problem(s). In other words, try the "could be worse" line on one of the 7,000 families that saw a home foreclosure notice filed today (that's the running daily average for such filings).
"Rosy Scenarios" are nice to look at & think about, but the truth is that most economists did NOT see the real estate crisis coming, and failed to see the economic downturn until it too obvious to ignore. Ready for a hard nosed -- and very credible -- alternative? Click here for charts and forecasts you simply cannot find elsewhere.
And what about "news" stories that offer no facts? Well, let's just say that by now, Pollyanna arguments regarding the condition of the economy won't keep pace with events for very long. Here are a few headlines (from stories that do include facts) that I came across just today:
- Industrial Output in U.S. Drops More Than Twice What Economists Forecast
- Manufacturing in Philadelphia Area Shrinks for Sixth Month as Orders Drop
- World Economic Growth Forecast Slashed to 1.8% by UN on U.S. Housing Slump
- Homebuilder Confidence Index in U.S. Unexpectedly Falls as Slump Persists
- Bernanke `Strongly' Urges U.S. Banks to Raise More Capital
Since it's apparently significant that the labor market and consumer spending "have not collapsed," you at least deserve a look at where their respective trends are going.
If wishes were reality, the economy would never be in recession, home foreclosures would vanish, etc., etc. In truth, competent economic and financial analysis can't even begin until one gathers the facts, and sees those facts for what they are. Want to see the facts we see -- and read the forecasts they lead us to -- within moments? Click here for more information.
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