What Recession?
May 29, 2008 by Karen Weideman
Filed under financial matters
It is no surprise that the media is putting fear into the hearts of voters during an election year. Dave Ramsey shows how the media is encouraging recession fear.
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Jennifer Chait
Jennifer is a freelance writer and blogger. Her writing background includes copy for non-profits and businesses, the web, and national magazines. Other obsessions include Frisbee, road trips, books... more
Karen Weideman
Karen is a mother of three children ages 3, 5, and 11 and wife to Gerald. She left teaching to be a homemaker and work-at-home mom, where she rediscovered her joy of writing. Karen is best known ... more
I totally agree. The definition of recession is 2 consecutive quarters of negative GDP. We haven’t had that at all. Nor have we come close. I don’t care what news source you use, by definition, we are not in a recession. Times are tough. I will admit. $4 is rediculous for gas. But Britain is paying more than $9 for desiel from what I hear. We have no complaints other than what we can not control.
On the other hand, if environmentalists would get hteir heads out of hte sand they are trying to bury us in, we would be able to dig for cruse oil and refine it ourselves with little to no damage to the environment. HELLO!!! Other countries aren’t killing their environment and they are digging and drilling. Why can’t we.
BTW. My family has gas wells on our land and our livestock are doing just fine. It can be done.
http://www.investorwords.com/4086/recession.html
“There are three types of lies – lies, damn lies, and statistics.” – Attributed to several different sources.
This is the case with this. Take the statistics that “prove” your point, and run with it.
Another way to look at it is a quote that I do not have the original author that says, “A Recession is when your neighbor loses his job, a Depression is when you lose yours.”
It is true that the GDP may fluctuate more than ever, leading to a “positive” in a down (U.S.) economy. A cheap dollar allowing products to be shipped over seas, beneficial exchange rates with other currencies may certainly help this. So by the “tried and true” definition it may no longer work.
But of course that was written at a time when American Corporations employed all American Workers.
Droves of people unemployed. Inflation led by gas prices that are keeping people home. More and more people (finally) looking to be frugal… not to save money, but just to survive gas and food prices.
Yes, for those that are not sitting with Stock Options and giving away your job to some low cost worker in India, Russia or China to ensure their EPS looks good to the board of directors. For the rest of us, times are tough… regardless of what some rich elitists may like to think.
Frankly, with a website called “Thrifty Mommy”, I would expect the authors to encourage frugality regardless of what definition of recession one chooses to believe. Afterall, won’t you get more readership if we are actually in a recession? But bipartisan politics can often cloud the obvious. Regardless of the fact that we are undoubtedly in the midst of an economic slowdown or recession as it were, as much of the recent content of this website pretty much proves it—high gas prices, high food prices, unemployment, etc.
Here’s an interesting look at the GDP of past recessions, for fun
http://bigpicture.typepad.com/comments/2008/05/positive-gdp-re.html
Make that partisan politics, big difference.
After reading Sonya’s link, I’m even more confident that our economy is in the crapper. It’s only a matter of time before someone flushes.
I would suggest removing your head from the sand and calling this situation what it is: a recession.
Sonya: I never said that things weren’t getting tight for people or that prices weren’t going up.
Kelly and I have always encouraged frugality, no matter the state of people’s finances. We are thrifty because we choose to be and we want to get the most out of our dollar. However, we’re not going to yell recession to scare people so we can get a larger readership.
I wasn’t even remotely implying that you should cry the recession equivalent of “wolf” for more readers. I was making a joke that your website would be better off in times of recession as people will look to new ways of saving money. So therefore I was questioning why you are getting caught up in a strict definition of a word. I was, however, implying that you are listening to too many talking points from Fox Broadcasting that are not necessarily based in fact and not doing enough of your own research on the subject before posting.
An even greater question you should ask yourself is why on earth this administration seems so defensive in admitting we are in a recession. Are they denying it for political reasons? Maybe they don’t want to see the poll numbers drop to an even more embarrassingly low number?
This is another prime example of their historical tendency to deny it and it will magically go away. Problem is, people are becoming wise to the games of this administration—finally (hence the low poll numbers mentioned above). I mean, don’t you think it’s their job as elected officials to protect the people? And considering we are in a recession, wouldn’t it be more helpful to admit it and provide sound advice for the populous (same goes for the media) rather than to deny it and tell people to shop more? Yes, I’m idealist but this seems like the logical way the world should work rather than the current shenanigans I see around me. I don’t think right or left thinking really enters into this equation at all, or at least it shouldn’t.
It doesn’t surprise me to see those whose lives are the most negatively impacted by this administration’s policies/practices become their biggest supports (I have many in my family as well). But I still don’t understand it.
Sonya: You are getting confused. My post had nothing to do with this administration or government policy. This is a video from a recognized financial advisor/expert about how the media hypes things up to their own advantage.
You post Karen, I am sorry to say has everything to do with politics and administrative policy.
The “media” (including other recognized financial advisors/experts) say there is a recession. One persons on the Faux News Channel trots out somebody to defend the White House position that there is no recession, and thus you select the one person saying “everybody else” is wrong and hyping a story for political gain and say it has nothing to do with this administration or government policy? Are you kidding?
Faux News has been the media mouthpiece for the current administration from day one. They go against every other expert and yet it is “the other guy” that is hyping it for polical gain in an election year… that is too funny.
If you want to get into a political conversation, as this seems to be turning towards, let me be blunt! Forget all the hype about a recession. If we would stop loaning money out to all the countries that would never pay us back, maybe we could actually pay our debts and get rid of the national debt. I am a firm believer in “if we don’t have it, don’t spend it.” But nobody wants to stop funding 3rd world countries that can’t feed themselves. It would make us look bad. How dare the great, financially abundant USA not give to those less fortunate. Well, let hte private sector loan money for a short season and we take care of our national debt. How about if the USA stops borrowing form China to give to Africa and just let China give it for once. Why do we always have to be the nice guy when we obviously don’t have the cash to give.
My suggestion … Do not give any aid for 12 months to any country and focus on eliminating our country’s debt and pay our bills for a change. Makes good financial sense to me. It doesn’t sound nice or generous. Our country has been far too generous for far too long with a red pen. I want to get our country back to being generous with our money, not China’s.
This means that I do want to help the less fortunate. I do it on a small scale at home with what little money I have left over at the end of the month when I have it. Being generous and desiring to help those less fortunate is what I live by. But I live by the principle of paying my bills as well. The dollar would be much stronger if it had something in the bank to back it up. And I don’t mean China’s bank.
Wow, that was a really weird segue, but hey man, I’ll run with it. You can’t talk about the national debt, without talking about a war we shouldn’t be involved in (and I do have a brother currently in Iraq, which I guess gives me a license to say such things without my patriotism being questioned…or maybe not).
Our spending for the Iraq war is now over 500 BILLION: http://zfacts.com/p/447.html
Be sure to tell your brother thank you for serving. His, your, and every military family’s sacrifice is appreciated. When we travel and see servicemen in airports, I tell my daughter that they keep us safe and she goes up to them and thanks them on her own.
But here is a thought. We didn’t pick that fight. They did. So you’re telling me that you would rather your brother be serving here on US soil fighting people who put bombs on women and children in order to kill others than over there? If we have to fight this fight, and we do somewhere, then I am selfishly thankful my kids don’t have to worry about playing in their back yard. You should be too.
I appreciate your kind words for my brother’s sacrifice, but I think you may be confusing Sept. 11 with the Iraq war. The two have nothing to do with each other. So when you say that Iraq picked the fight with us, I don’t know what you are referring to at all.
And although I hate knowing that women, children, the mentally handicapped, etc. are blowing themselves up to kill as many of our men as possible, I also understand it. They look at us as invaders and frankly I do not blame them. If there was a hostile takeover the likes of Shock and Awe that happened on our soil, you better believe our citizens would be loading their rifles as well. I can’t bring myself to call them the enemy because I was born in a country where my ancestors were once in a similar situation as they are. Think back to how we won this country from the British during the American Revolution. We didn’t want to give up our land and neither do they. Of course, I’m not trying to justify their actions, I’m just able to step out of my own comfort zone and look at it from their perspective.
Would I rather be fighting on our soil? Of course not. But Iraq never attacked us, nor did they have MWDs. And this information is not lost on the extremists, who are surely ready and planning their next attack on us. If anything, this war has helped them gain more recruits because it is an unjust war and nothing unites people like a common enemy, us.
I never said the war in Iraq, I said “they picked the fight”. Remember the USS Cole, the world trade center in the 90’s? How about all the embasy’s that have been bombed in the last 30 years. See, the war we are fighting is bigger than just Iraq. It jsut so happens to be currently located in Iraq and Afghanistan.
Iraq and Afghanistan are locations of a symptom. Not a specific ideal or lie. I know everybody thinks that. I deal with your way of thinking every day and I am so glad we live in a country that can discuss it. But remember, we could be in Timbucktoo if that is where extremists decide to take their stand and harbor training camps and support terrorism. The point for me is, since we have to have this fight, let’s keep the fight somewhere besides our soil. I never want another 9-11.
But remember this as well. We have to be right EVERY time, they just have to be right once.
Put simply, I don’t believe in any “war on terrorism” because it is used to justify oppressive measures and has led to perpetual global interventionism. Talk about fearmongering.
That’s kind of funny, you just mentioned the USS Cole, the previous bombing of WTC—both of which were also organized and directed by Osama bin Laden’s Al-Qaeda. But there is no link to Saddam and Al Qaeda as the 9/11 commission report declared in 2004. I have no qualms with the US invading Afghanistan, afterall it’s Osama we’re after right? Isn’t it?
Still though, the conversation I started having mid-way through another conversation was about the war in Iraq and what it’s costing us since you brought up the national deficit. Let me just ask point blank, why do you think we invaded Iraq? And what amounts to “terrorism” in your book? Also why haven’t we invaded North Korea (Kim Jong Ill and his long range missiles) or Saudi Arabia (where Bin Laden and the majority of the hijackers from 9/11 were from) if we’re really fighting a “war on terror”?
Wow, we must be fighting this abstract war really badly with huge oversights like those. Let’s just hope the War on “Terror” doesn’t have a track record like the War on “Drugs” did in the 80s.
Dave Ramsey is talking about this again tonight on his show. He says that yes, the economy has slowed down, but we are not in a recession. We may be at the beginning of a recession but we are not in one right now. Now CNN Money and some others are saying we may not have a recession. So, one they declared that we definitely were in a recession and now they’re backtracking. Interesting.
I find it interesting that Jay objects to your using Dave Ramsey as your source of information simply because Dave was on Fox News. What does that have to do with anything? Dave Ramsey is not a recognized financial adviser/expert because Fox News declared him so. His sound advice and the results it beings have made him a trusted name in finance – completely unrelated to any news agency.
Revka, that has EVERYTHING to do with it. In every bear market there is a bull believing things are about to turn around (otherwise if everybody was a seller, there would be nobody to buy, and the markets would totally collapse). In this case, Dave Ramsey is the one that believes everything is hunky dory. Fine, he is entitled to believe that. But that is PRECISELY the reason he is the “respected expert” the Faux News Channel used him. The determination was already set to defend the talking points of the White House that there is no recession. So they trot out the one person they could find that fits that conclusion.
My point (which you conveniently overlooked), is that CNN, CNBC, MSNBC, CBS, NBC, ABC and everybody else also has “well respected financial advisors” so why is it that if it is on Faux, that it must be true and EVERYBODY ELSE is wrong? EVERYBODY ELSE is playing a game?
What about the FED? Ben Bernanke is cutting interest rates in the face of inflation fears because the economy is good? His reasoning that fears of high unemployment is a “Media Game”? No, I don’t think so.
In the past three months (ending in April… may numbers are not out yet), employers have cut 232,000 jobs from their payrolls. The unemployment rate has climbed to 5.1% from 4.7% as recently as November. If you are one of those people, you certainly don’t feel like the recession is “hype” by the media.
Lehman Brothers economist Drew Matus believes that GDP will fall in the second quarter but that the rebates, along with interest rate cuts by the Fed, could lead to modest growth and an end to the recession in the third or fourth quarters. Of course for the recession to end in the third or fourth quarter, that would mean that we would already have to be in a recession. Oh, but I forgot… he is just a stupid economist, and unless he says this on Faux, then it is just “hype”
I won’t even go into the war in Iraq… well because Sonya covered the points fairly well, and Kelly… well you have just memorized the GOP talking points regardless of the truth (I can’t fathom anybody still trying to link Iraq with Al-Qada, except for William Kristol, Sean Hannity, and apparently you).
Jay, one last rebuttal from me, and then I’m not wasting any more time on this.
You’re the one who is stuck on which network said what. I don’t care that Dave Ramsey appeared on Fox News. I wouldn’t care if he appeared on the most liberal news network. I respect his opinions because of his track record, not because of which television network featured him.
Contrary to your statements, if you do some research, you will find that Mr. Ramsey is not the only financial expert saying that we are not truly in a recession. Check out this NY Times article sharing the viewpoints of six experts. Or how about this Boston Globe article stating that even the experts aren’t sure right now? According to Scobleizer, Steve Forbes of Forbes magazine thinks we should ignore doom-and-gloomers who cry recession, and other top business execs agree. A CBS station, WLTX, posted an article which concluded that we may not be in a recession. MSNBC stated that it’s too early to declare a recession. MSN Money thinks we need a recession but says the headlines are more hype than anything. Do you want more examples or sources? Did you notice that not one of these articles was from FOX or quoted Dave Ramsey?
Are things bad? Definitely, and I for one think they will only get worse. My family already feels the pinch, and I think the ripple effect from rising gas prices has only begun.
I really don’t care what they call these hard times -the fact remains that they are hard. I’m just annoyed by the unwarranted hostility elicited by this simple post – particularly when that hostility appears to stem from a disdain for the TV network on which Mr. Ramsey appeared and not from an unbiased review of the facts.
Thanks to a reader who sent this to me:
http://www.smallbusinessnewz.com/topnews/2008/05/23/economic-woes-may-not-be-so-woeful-anymore%E2%80%A6
Revka,
I’m sorry you find this a “waste of time.” But it seems that this would be because you rebut pieces of an argument, without actually going to the reason why. Yes, I stuck on the network. For a reason. The point that Ramsey is a respected financial analyst is not in question. And fairly as I pointed out, that to say that ALL economist believe we are in a recession would be to turn a blind eye to “prove my point” and that would make me as wrong as those that choose to be blind to this side of the argument. Yes, I am stuck on Fox. Why? Because they are neither fair nor balanced.
You point to articles from MSNBC, Money and even Forbes that questions whether we are in a recession (though Forbes only warns against Doom and Gloomers). But I can point to the opposite arguments from the same sources. Show me one place on Fox where there is any sort of “balance” No instead they claim a “media conspiracy” (which you have conveniently disproved by showing articles to the contrary elsewhere).
And that is really the point that in the initial post bothered me most. Certainly anybody and everybody can draw their own conclusions. Few things are completely cut and dry. But to lay claim that “everybody else” is wrong, and that it is all conspiracy by the “media”… well that is a tired old game that has been being played out for far too long now.
Karen,
As covered earlier, the reason it is still “argued” on this point, is because using the “standard” of 2 declining quarters of GDP is quite antiquated in today’s global marketplace. Our “domestic output” is no longer a true bellwether of how “the people” are doing, because Corporations can now have excellent output and profits from outsourced work while still having rampant unemployment here at home.