Mimsy Were the Borogoves

Editorials: Where I rant to the wall about politics. And sometimes the wall rants back.

Garbage in, garbage out economics

Jerry Stratton, December 27, 2010

When your definitions suck, you’ll get gobbledigook. James Surowiecki at the New Yorker can’t understand why, now that the recession is “over”, the economy still sucks. In what Jim Hoft awards the Brilliant Elitist Line of the Day…, Surowiecki writes:

The recession has been over for more than a year now, but so many people are out of work that it doesn’t feel like much of a recovery.

He then goes on to think up all of the excuses for why the economy sucks when the experts say it’s over, without blaming the definition of a recession.

Economists define the start of a recession as when the economy is at a high. The recession is over when the economy is at its lowest point. Economists think we’re at the low point now, so they’ve said the recession is over. The definition of a recession doesn’t care what caused it. All it does is look at the graph. It’s the definition: the reason we’re doing so poorly and the reason the recession has been called as over, are the same thing: we’re in really bad shape right now.

If you’re doing well, economists might look back later and say that you’re in a recession. When you’re doing poorly, they might look back later and say that the recession is over. What they don’t do is look back and say, “these actions were when the recession started, and these actions were when the recession ended.”

When your definitions suck, your answers will suck as well. Like Lincoln’s five-legged dog, you can say that we were in a recession when the economy was doing the best it had done in years, and you can say that we were out of the recession when it was at its worst. But saying it doesn’t give people jobs.

In response to Definitionally dodging recession responsibility: You’re in a recession when the economy’s doing well; you’re out of it when the economy sucks. Ignore that mortgage crisis behind the curtain.