A few weeks ago I had a post titled “Recession Over Soon” headlines misleading. I received a few twitter remarks that tried to label me as a fear-monger. In what I refer to as the ultimate “October Surprise,” nobody called the media “fear mongers” when talks of billion dollar bailouts made the news just 2 weeks before a national election.
The facts however are very clear. The popular news media may indeed be trying to simply write something different to keep up their readers/viewers. It’s more likely that they want to help prop up their favorite political figures against criticism from fiscal conservatives.
Ask yourself honestly: If this was anything other than a Democrat party presidency with a Democrat controlled House and Senate, would the major media be so kind?
Occassionally the truth leaks out from sources that are more concerned about finances than politics.
In a July 10, 2009 Financial Times article by Chrystia Freeland, Larry Summers, director of the President Obama’s National Economic Council said;
“I don’t think the worst is over … It’s very likely that more jobs will be lost. It would not be surprising if GDP has not yet reached its low.”
Today unemployment is nearly 10% (some would say actual figures show over 16%) and the GDP has lost more than 6% over the last quarter. By many standards it only takes a 10% loss for a recession this long to be classified as a depression. Considering that the economy is much different than it was in the 1930′s, the reality for determining what is actually a depression may be different as well.
According to economist.com, before the 1930s all economic downturns were commonly called depressions. The term “recession” was coined later to avoid stirring up nasty memories.
This provides more evidence that politics plays a hand in what we consider recessions and depressions.
In 1978 Alfred Kahn, an economic adviser (“inflation czar”) for Jimmy Carter, was admonished by President Carter for scaring people as he warned of a looming recession/depression. Mr Kahn, in his following speeches, simply switched the offending term, saying;
“We’re in danger of having the worst banana in 45 years.”
So yes, contrary to popular headlines, we’re in a banana and it’s more likely to get worse before it gets better.
For more information about recessions and how you can market your business effectively, please visit RecessionMarketingGuide.com
- Tony Darrick Baker
July 13, 2009
Recession