According to Amity Shlaes, Phil Gramm is correct — there is no recession so just stop whining:
"Consider what happened this week. While speaking with the Washington Times, Gramm said that the country was not in a true recession but a "mental recession." He also said, "We have sort of become a nation of whiners" and "You just hear this constant whining, complaining about a loss of competitiveness, America in decline."
Gramm was right about the recession and stood by his recession comments on Thursday. A recession is two consecutive quarters in which the economy shrinks, and last quarter it grew. But no matter. Voters feel they are in a recession, and so they are, at least according to Campaign Econ."
First, let’s corrrctly define what a recession is: It is NOT two consecutive quarters of GDP contraction. What a recession actually is, according to the NEBR, the entity in charge of dating such things, is as follows:
"A recession is a significant decline in economic activity spread across
the economy, lasting more than a few months, normally visible in real
GDP, real income, employment, industrial production, and
A recession begins just after the economy
reaches a peak of activity and ends as the economy reaches its trough.
Between trough and peak, the economy is in an expansion. Expansion is
the normal state of the economy; most recessions are brief and they
have been rare in recent decades. As formally defined by the NBER, it is the "Peak to Trough decrease in business activity."
-The NBER’s Recession Dating Procedure
You will note that nowhere in that formal definition is there any discussion of consecutive quarters of negative GDP.
Let’s review: Phil Gramm is working hard at submarining John McCain’s Presidential campaign. Gramm says something that will very likely found to be incorrect — we won’t find out for quite sometime when the recession technically began, but its a good bet that its somewhere in the October 07 – February 08 period, based upon the definition above.
At the very least, what Gramm said was foolishly impolitic. Defending it via bad info is not only wrong, it is insulting to all those "whiners" dealing with food and energy inflation and asset deflation. Ms. Shlaes response is to defend Gramm via definition discarded long ago. (Well, its not like she’s an expert in economics or anything).
I guess she and Phil Gramm are two more Pervasive Pollyannas of Prosperity . . .
Smart move by Phil Gram:
While people are looking at this dumb comment — as well as his great work at UBS — the real fun won’t begin until they start investigating his work on the 2000 Commodities Futures Modernization Act . . .
Recessions Often Begin With Positive GDP Data (May 2008)
Phil Gramm Is Right
Washington Post, Saturday, July 12, 2008; A13
The NBER’s Recession Dating Procedure
October 21, 2003
Business Cycle Expansions and Contractions
National Bureau of Economic Research
Bureau of Economic Analysis
Forgotten Man: A New History of the Great Depression (Hardcover)
by Amity Shlaes
New Home Completions, 1968-2008 click for ginormous chart Major New Home Building Housing expansions since 1968 are marked as a red horizontal line at bottom. They previously lasted 2-4 years (71-73; 76-79; 83-87) The most recent boom far exceeded all previous expansions, running form 1992 – 2003 — then exploding upwards for another 3 years…Read More
The most interesting Jazz album I have heard this year has been Herbie Hancock’s tribute disc to Joni Mitchell — River: The Joni Letters.
Mitchell’s poetic folk and jazz style lends itself well to a more pure jazz interpretation, and Hancock does just that. It does the material great justice.
Considering how fabulous the disc is, it sold next to nothing before winning a Grammy for Album of the Year — and not a whole lot more since. That’s a shame, as it is a cool delight. Perhaps last year’s messy and inconsistent A Tribute To Joni Mitchell is to blame… except for k.d. lang’s languid version of Help Me, the rest of the album was mostly a bust.
That’s a shame, because this album really deserves a chance to shine on its own. Hancock is a legendary jazz musician, keyboardist, and producer. His star-studded list of vocalists includes Corinne Bailey Rae ("River"), Norah Jones ("Court and Spark"), Tina
Turner ("Edith and the Kingpin"), Luciana Souza ("Amelia"), Leonard
Cohen ("The Jungle Line"), and Mitchell herself ("Tea Leaf Prophecy"). Saxophonist Wayne Shorter adds a smooth and mellow flavor throughout.
One of the highlights of the disc is River (see video below). Hancock creates a fine balance between jazz improvisation and adult pop. Listen to how he arranges this song, pulling its jazz essence to the fore, while Corinne Bailey Rae wraps her voice perfectly around this Mitchell composition.
Perfect for our Friday Night Jazz session . . .
Herbie Hancock featuring Corinne Bailey Rae – River