Economy: Are We in a Recession or Depression? | Newsweek Business

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Still, to NBER, the means by which to measure a recession make as much sense today as they did 50 years ago. Harvey Pitt, former chairman of the Securities and Exchange Commission and CEO of the global consulting firm Kalorama Partners, says there is another reason why the process by which a recession is defined will likely go unchanged. "It's fairly elastic, because it has enormous economic as well as political consequences," he says. "Whoever is running the government at any particular time wants to avoid people drawing the conclusion that economic stagnation is a recession."

When it comes to depressions, Pitt believes the term is fairly well understood, even if there is no official definition. A common unofficial definition for a depression refers to a deeper and prolonged recession during which the GDP declines by more than 10 percentage points. That was certainly the case in the 1930s, when the GDP dropped by more than 30 percent from 1929-33, with unemployment rates peaking at 25 percent in 1933. "These numbers were monstrously larger than anything we'd experienced otherwise," says Smith. "We have no other modern experience of it and will likely not have any, because we've installed safeguards that didn't exist then to prevent such a catastrophe."

Smith doubts there's a need for an official definition, because he believes it is unlikely that the country will find itself in such a drastic situation again. The NBER's Gordon says that coming up with one would likely be difficult, because "really, all we agree on is that a depression is much more severe than a recession, and everyone agrees we haven't had one since the 1930s."

When it comes to searching for definitive explanations, Reagan may have gotten it right back in 1980. In that same speech, he said, "Human tragedy, human misery, the crushing of the human spirit … They do not need defining—they need action."

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Spread the wealth how. Look at his past. Obama in this video, addressing his work with ACORN litigation against the banks and relating to the Community Reinvestment Act and the failure of Freddie Mac and Fannie Mae, as they relate to the current real estate and financial crisis, states that, and I quote:

"Subprime lending started out as a good idea, helping Americans buy homes who previously could not afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories, and spread them out among investors and around the country, as well as around the world. In theory, this should have allowed mortgage lending to be less risky, and more diversified."

"The original idea was a good one, which was, lets see if we can distribute risk more broadly, and make it easier to provide loans to people who otherwise might not be able to get one."

Listen for yourself. You cannot dispute the mans on words recorded live:

http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=related

Obama in this second video is campaigning at a convention of Acorn and I believe two other ???Community Activist's organizations. Ask if he will be their ally if he becomes President, Obama says, quote:

"Yes, but let me say that before I even get inaugurated, during the transition we are going to be calling all of you in to help us shape the agenda."

See and hear it for yourself. Obama promised that Acorn and other groups like it will setting his agenda if elected:

http://www.youtube.com/watch?v=8vJcVgJhNaU
Below is a link to C-SPAN video clips of the Congressional hearings at roughly the time McCains attempt at S.190. to fix Fannie and Freddie. See for yourself who said what.

http://www.youtube.com/watch?v=_MGT_cSi7Rs
See also
http://www.newsweek.com/id/164732 from this web site. (oops!) stating that Freddie Mac was spending tax payer money to target Republicans in 2005 who were trying to regulate Fannie and Freddies fraud. Democrats were not targeted, as the were all in the tank with Fannie and Freddie to kill the regulations. Hear that, the article admits that Republicans were trying to regulate Freddie and Fannie, and Democrats were trying to stop it from happening as a means to facilitate the Community Reinvestment Act.

See also: http://www.newsweek.com/id/164972
Stating that Gramm-Leach-Bliley Act wasn't what caused the meltdown, and noting that "economists on both sides of the political spectrum have suggested that the act has probably made the crisis less severe than it might otherwise have been."

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Posted By: debfed98 @ 02/07/2009 11:21:54 AM

It would be nice if the question would just be answered "yes" or " no". Either we have had a 10% decline over the last two quarters or we haven't. Which is it? Secondly, if in the 1930's, there was a 30% decline, then we could be in a depression that is not as severe as then; however, to state we are not there etc, etc is the equivalent to stating that a town hit by a cat 4 hurricaine didn't experience one because it wasn't a cat 5. I am not an economist, but know we are in trouble. So, I am asking, if by the given definition of a 10% decline over the past two quarters, are we experiencing a depression?
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Posted By: Nowforthetruth @ 10/24/2008 12:46:47 AM

Spread the wealth how. Look at his past. Obama in this video, addressing his work with ACORN litigation against the banks and relating to the Community Reinvestment Act and the failure of Freddie Mac and Fannie Mae, as they relate to the current real estate and financial crisis, states that, and I quote:

"Subprime lending started out as a good idea, helping Americans buy homes who previously could not afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories, and spread them out among investors and around the country, as well as around the world. In theory, this should have allowed mortgage lending to be less risky, and more diversified."

"The original idea was a good one, which was, lets see if we can distribute risk more broadly, and make it easier to provide loans to people who otherwise might not be able to get one."

Listen for yourself. You cannot dispute the mans on words recorded live:

http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=related

Obama in this second video is campaigning at a convention of Acorn and I believe two other ???Community Activist's organizations. Ask if he will be their ally if he becomes President, Obama says, quote:

"Yes, but let me say that before I even get inaugurated, during the transition we are going to be calling all of you in to help us shape the agenda."

See and hear it for yourself. Obama promised that Acorn and other groups like it will setting his agenda if elected:

http://www.youtube.com/watch?v=8vJcVgJhNaU
Below is a link to C-SPAN video clips of the Congressional hearings at roughly the time McCains attempt at S.190. to fix Fannie and Freddie. See for yourself who said what.

http://www.youtube.com/watch?v=_MGT_cSi7Rs
See also
http://www.newsweek.com/id/164732 from this web site. (oops!) stating that Freddie Mac was spending tax payer money to target Republicans in 2005 who were trying to regulate Fannie and Freddies fraud. Democrats were not targeted, as the were all in the tank with Fannie and Freddie to kill the regulations. Hear that, the article admits that Republicans were trying to regulate Freddie and Fannie, and Democrats were trying to stop it from happening as a means to facilitate the Community Reinvestment Act.

See also: http://www.newsweek.com/id/164972
Stating that Gramm-Leach-Bliley Act wasn't what caused the meltdown, and noting that "economists on both sides of the political spectrum have suggested that the act has probably made the crisis less severe than it might otherwise have been."
- Reply
- Report Abuse
Posted By: Nowforthetruth @ 10/21/2008 10:48:30 PM

See: http://www.newsweek.com/id/164972
Stating that Gramm-Leach-Bliley Act wasn't what caused the meltdown, and noting that "economists on both sides of the political spectrum have suggested that the act has probably made the crisis less severe than it might otherwise have been."