The Bush administration has managed to disconnect the economy from the lives of everyday people for some time. While Wall Street was booming for years, the income of average Americans was stuck in neutral.
Now we see the effects. Jobs are down. Wages are falling. I will not even go into the housing market because we are all familiar with that. Although the GDP hasn’t fallen, it isn’t going up either. So, while the Fox guys are sort of correct about the definition of a recession, they are, of course, shading the truth. The old definition of a recession was twp quarters of a negative GDP, but it has been changed.
The NBER Business Cycle Dating Committee defines a recession as
a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
Paul Krugman said it very well a couple of months ago. The point is that the official definition of recession has become disenfranchised from peoples’ actual experience. Right now, we’re in an economy with deteriorating employment and incomes, collapsing home prices, and business retrenchment. Is it also an economy in recession? Who cares?