Saturday, September 25, 2010

The Recession Is Over, Really?

Recession special at Gray's Papaya shopImage by Ed Yourdon via Flickr
It's reported by the National Bureau of Economic Research committee after considering numerous economic data and concluding that several key measures of economic activity, including total output and industrial production, pointed to June 2009 as the trough of the business cycle. 
I can understand that the analysts using their guidelines and mathematical algorithms have mathematically determined the recession is over. I have a problem with that. Economists have it all worked out to a science the measurements and data necessary to call these things.

According this has been the longest recession since 1945. The latest one is the twelfth recession since then. So maybe we can trust the economists. They have been studying this for sometime with plenty of data to back them up.

But out here in the real world we see no evidence of the end of the recession even though it ended more than one year ago. I see everyday people out of work and families suffering. In my business we have real estate inventory to sell but can't.

Mark Zandi, chief economist at Moody's Analytics, claims that because of the stimulus, disaster has been avoided. Most economists claim things are getting better because their numbers tell them so. But out in the world times are still very tough. 

Sorry economists but you are wrong, but who am I do go against educated people who study this stuff everyday. I like to take the advice of the old warriors like Warren Buffet. I can't listen to desk jockeys who don't know squat about business.

In an interview of Warren Buffet He states:

"I think we're in a recession until real per capita GDP gets back to where it was before. That is not the way the National Bureau of Economic Research measures it. But I will tell you that to any - on common sense definition, the average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession. And we are not going to be out for a while, but we will get out of it."

The Oracle of Omaha is  right of course. Most Americans struggling to pay their bills feel the same way. Survey after survey shows people are worried as ever about their economic future. Members of the National Bureau of Economic Research(NBER), who officially define when recessions start and end, seem to hide in their ivory towers issuing statements that confuse most people who barely remember their Econ 101 classes in college.


2 comments:

  1. The recession may be technically over the way economists define the term, but business activity is not robust and has not returned to pre-recession levels yet. So to the average Joe, especially the average unemployed Joe, their personal recession is still in high gear.

    ReplyDelete
  2. I believe that the recession isn't quit over yet. People should act like it and start saving as much as they can.

    ReplyDelete

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