The Washington Post reported today that the United States’ economy “grew” 3.5 percent in the third quarter. In other words, in the past three months, the people have bought a lot of sh–. Mostly because the government has been dishing out money to consumers to buy new cars, and anything else our little hearts desire.
The U.S. government will give you a few thousand bucks for this.
Now, I went to The Post as a protest to The Red Sox Paper, but I stayed because it was the article that provided better context for the complicated subject of the economy. It used and defined real GDP (as opposed to nominal GDP, which means almost nothing) and provided analysis free from “ZOMG we’re out of the recession forever! Where’s the vodka?” like most other news media do. (Tequila is better.) However, it still didn’t define a recession.
Two things must happen in order to be a recession: First, have two consecutive quarters of negative growth in the economy (six months in a row of a negative real GDP); then, wait for the Fed to declare it. But chances are, you never heard that on the news. Because you don’t have to take economics to get a journalism degree.
Instead, journalists have spent most of the last year quoting any economist who would return their calls, and acting like those people’s words were defining for the entire state of the economy. Which is stupid. Economics is based on cycles. And on psychology, confidence, and all that touchy-feely crap that makes people decide whether they want to spend money and on what they want to spend it.
An economics journalist made this pretty picture.
It’s also, as my mother says, one of the only fields in which you can consistently screw up and still have a job. (The other is meteorology. And apparently working for A.I.G..)
So these stories about the economy? They’re about as useful as the ones about Brangelina’s 37 children. The claim that everything’s going to be fine just because we had a three-month shopping spree? Kind of like claiming that Mountain Dew lowers your sperm count. Nobody knows if the recession is over. Stop fooling yourself.
