Brother, can you spare an economic indicator?

Now that the “R” word is officially out of the closet, can the “D” word be far behind?

The National Bureau of Economic Research, the august body that serves as a thermometer for the U.S. economy, confirmed Monday what many already suspected: We’re in a recession and have been for a year.

But as the economic crisis has deepened this fall, analysts and business executives increasingly have raised the prospect that we’re headed for a depression. The most recent example came Wednesday, when a top Chrysler executive told Congress that the failure of a major U.S. automaker could “trigger a depression.”

If so, don’t expect the National Bureau of Economic Research to give us a head’s up when it happens.

“It’s just not a part of the business-cycle-dating process that the NBER has been involved in,” a spokeswoman for the bureau said.

According to the bureau’s website:

The NBER does not separately identify depressions. The NBER business cycle chronology identifies the dates of peaks and troughs in economic activity. We refer to the period between a peak and a trough as a contraction or a recession, and the period between the trough and the peak as an expansion.

The entry goes on to point out that the contraction in economic activity from 1929 to 1933 is considered the worst in U.S. history. Real gross domestic product declined 27% during that time, the bureau notes, roughly ten times as much as in the worst postwar recession.

That slough of despond is often called the Great Depression. Others apply the term to the entire decade of the 1930s, contending that it took the industrial ramp-up that preceded America’s entry into World War II to finally pull the country out of its economic doldrums.

It’s a debate the NBER has no intention of entering.

“[J]ust as the NBER does not define the term depression or identify depressions, there is no formal NBER definition or dating of the Great Depression,” the bureau’s website says.

But if another depression comes, chances are we’ll know it when we see it.

-- Martin Zimmerman

Photo: Unemployed men wait for free meals in New York in 1932. Credit: Associated Press

Comments

[Phil]

You want a depression in the US? Keep talking about it. These phenomena are heavily driven by mass psychology, rather than reality. Already, today, we have a financial sector that knows everything about money and very little about economics, so they are isolated from the economy and exaggerate every change. The underlying economy is stronger than financial markets give it credit for, but the link between the behavior of financial profesionals and institutions and the economy threatens to pull down the whole house. Obama gets that the federal government has to spend whatever it takes to stabilize perceptions, put a floor under collapsing confidence, and support natural efforts by people to lift themselves out. This has already gone further than it has had to. But media, academics and finance sector professionals seem determined to talk our way into a depression. Please stop.

[J.T.]

Phil, I agree somewhat with your view of the media and mass psychology. But in every book ever written, religion taught, and government raised, good and evil always battle. This is a necessary evil. The world needs to CTL, ALT, DEL. Reboot, and start over. This has to happen to redistribute the wealth, and create new jobs for those who are with out right now. Most of these businesses/corporations were formed during or around the depression. The Baby-Boomers took advantage of the situation and never looked forward to what they were creating. So lets redistribute, recreate, and prosper if you’re willing to try.

[James Monachino]

Global Disorder will find a New Paradigm:

* New Tax Structures - look for it coming to a country or continent near you.
* New Oversight - rules that will impact the way you do business.
* New Regulations- that will hopefully dampen the rip and tear capitalism that helped create our current global market decay.

* Tariffs - Look for the revival of tariffs or defacto tariffs that will begin to appear around the globe as job creation becomes number one.
* OIL Revenues Decline - look for world wide terrorist traffic to slow significantly. These campaigns our expensive and don't run on credit.

* Federal Reserve - Sorry Ben, looks like an A for effort and an F for application. The world economies are melting and the Fed's lack of critical oversight is in the middle of it.
* Nationalize the Federal Reserve: Time to make a change in personnel and structure. Reconnect our monetary system to the taxpayers not private international banking interests.

* Bailout Money: focus on rebuilding the real economy (middle class worker). This is hard time staking work but will start to change the current downward momentum.
* National Health Care: Massive unemployment, crushing corporate health & retirement burdens, and rising premiums that are forcing the rolls to swell well beyond the 40mm number of uninsured USA citizens that swamp our emergency rooms and hospital balance sheets. This will force the creation of a national single payer health care program.

* Leadership: In a capitalistic environment you are not rewarded for failure. Look for legacy leadership to be cycled out in both Business and National Politics. It will be subtle but wide reaching by the end of Obama's four years term.

Conclusion
Folks, we are all on the merry go round and some of us can't get off while others are being thrown off into brick walls. The good news is we have the ability to rebuild a a more effective economic and political order. Maybe not by choice but desperation. Fasten your seat belts, refocus your thinking to a forward mode, opportunity an action awaits the astute and patient individuals.

[Misty]

I think we should load these car guys' private jets with homeless people. Sadly, the homeless people would probably walk out in disgust.

[Anti UAW]

Disband the UAW and restructure the automakers under chapter 11 rules! They are a cancer sucking the life out of the automakers!

http://disbandtheuaw.com