My wife asked me an innocent question over dinner while NBC News was droning on the countertop nearby– ‘Who decides when the recession ended?’ I opined that if it had, it certainly didn’t feel like it. Well, I got curious and did a little research on the arbiter, the National Bureau of Economic Research. I am not impressed.
Thinking I’d find a simple explanation I followed a link to gobbledgook called ‘Statement of the NBER Business Cycle Dating Committee on the Determination of the Dates of Turning Points in the U.S. Economy‘ where I found this utterly fascinating statement —
The Committee does not have a fixed definition of economic activity. It examines and compares the behavior of various measures of broad activity: real GDP measured on the product and income sides, economy-wide employment, and real income. The Committee also may consider indicators that do not cover the entire economy, such as real sales and the Federal Reserve’s index of industrial production (IP).
Put another way — it means whatever they say it means. No fixed definition? HTH do you arrive at what passes for a mathematical conclusion about anything without starting from a fixed point? In other words, what we’re feeling is at least as statistically valid as what these guys say.
I got curious about who exactly this mob of geniuses is so I followed the About link and learned–
The NBER is the nation’s leading nonprofit economic research organization. Sixteen of the 31 American Nobel Prize winners in Economics and six of the past Chairmen of the President’s Council of Economic Advisers have been researchers at the NBER. The more than 1,000 professors of economics and business now teaching at colleges and universities in North America who are NBER researchers are the leading scholars in their fields.
Other than Tom Sowell, Walter Williams and members of the Ludwig von Mises Institute, your average Nobel Prize winning economist, Chairman of the Council of Economic Advisers and other random “professors” don’t know doodly about the real world, IMHO. But I they did sell me that the books have been cooked to give democrats something to talk about. It doesn’t matter though. It’s sort of like Karl Rove’s blustering– sound and fury signifying nothing.