patrick.net

Our economy can't grow fast enough even to absorb new member of workforce, let alone ones that are out of work from before. And if you accept that this is a severely bad economy or recession (by some definitions), then this is the first time that the fed seems powerless to turn it around.

In the past they could always tweak things with monetary policy. We may have been in bad shape before, where monetary policy changes only covered up how bad things were, but at this point monetary policy is just outright impotent, in bringing economic growth back up to anything close to full employment (95% employed).

IT at least seems like in all past recessions (beyond narrow technical definition), monetary policy could eventually get us up to nearly 95% employment (U-3)

If you don't want to hear my point because of semantics, and use of the word recession, then define recession (for now) as U-6 being above 9%.

http://www.shadowstats.com/alternate_data/unemployment-charts

lenar says

You get the drift. Or do you?

I do, and I find your criticism of the NBER to be severely wanting. As far as I can tell, it consists of your opinion that the quality of life and general state of the economy weren't up to some unknown level you consider non-recessionary.

Opinions are much more useful with some data to back them up. For example--unemployment had dropped, but it was still over 8%. I consider anything over 8% to be still in recession. See how that works?

marcus says

In the past they could always tweak things with monetary policy.

This is because in the past they CAUSED the recessions with monetary policy!

They'd jack up rates to slow the rate of borrowing (and economic expansion), then drop rates when (wage) inflation fell as the economy lost jobs.

http://research.stlouisfed.org/fred2/series/FEDFUNDS

The 1990, 2000, and 2008 recessions were different tho . . .

in today's headlines:

"NEW YORK (AP) -- The government has sued the nation's largest banks, along with a handful of other financial institutions and executives, for violating federal and state laws in the sale of home mortgage-backed securities."

Hmm, now we get to see some lenders turn over on some REwhores, and THERN things will get interesting.

lenar says

...and non-recession means bad? No, not everyone. You disagree:
corntrollio says

A recession has a technical definition. You can say, "oh, the economy sucks," but it might not be in a recession. In fact, there was a bit of a bear market rally during some of those years.

Nice try. Let me break it down for you, since you don't seem to understand and instead would rather try to confuse people with logical fallacies:

All recessions are bad times.
Not all bad times are recessions.

A recession also tends to indicate when things are getting worse. As I mentioned above, if unemployment is getting better and real GDP is increasing, as it was from 1933-1937 using your favored source, then things may be bad, but not getting worse.

marcus says

IT at least seems like in all past recessions (beyond narrow technical definition), monetary policy could eventually get us up to nearly 95% employment (U-3)

If you don't want to hear my point because of semantics, and use of the word recession, then define recession (for now) as U-6 being above 9%.

marcus, this is a great proposal, actually, and I do want to hear your point. My issue is not semantics, but rather that lenar is not giving any definition and just wants to throw sand on the original argument without a legitimate reason other than talking out of one's ass. If lenar had said something like this, it would be more legitimate. Then we could determine when recessions under that definition occurred and whether the Fed made that worse or not. As it is, still nothing from lenar except trying to confuse people and use logical fallacies.

A few thoughts on this as an indicator:

1) is unemployment the right indicator? Sometimes unemployment lags the recession a little. While unemployment hit 5.7% during the 2001 recession, the peak in unemployment was after contraction had stopped -- mid-2003 at around 6%. Economic activity can still be up (negating the recession) because workers are more productive.

2) I'm not sure how good Shadowstats' measurement of U-6 or U-3 is. Do you have reason to believe them? I do not trust their measurements of inflation because if you trace them back in time, they don't make any sense, but their employment numbers could be good.

3) Another question I'd have is whether we have structural unemployment here so that 95% no longer makes sense.

Is the data available and accurate enough to determine this pre-Fed and post-Fed?.