Republican economic wisdom

[Toro]

There is only one definition of recession...

Yes there is. And you keep getting it wrong.

Repeating it over and over and over again doesn't make it true.

well, its hard to keep up with the changing definitions these days
last i knew it was 2 qts of consecutive decline
and it had been that way since the eary 70's
i guess they'll have to change the definition again for Obama

The NBER has defined it this way for decades. It has nothing to do with politics.

I understand that people think its two consecutive quarters. I used to think that as well. But it is not.

 

[Toro]

Let me explain why this is the case.

Here is the official definition of a recession.

The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, 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 wholesale-retail sales.

Business Cycle Expansions and Contractions

Now, I'm going to explain the technical reason why GDP can be expanding and still be in a recession. This is going to take some numbers, so bare with me.

If you have taken first year macroeconomics, this equation will be familiar to you

GDP = C + I +G +NX

Or, economic income equals expenditures on consumption, investment, government spending and net exports (exports minus imports).

The US economy is comprised something along the lines of 65% consumption expenditures, 10% investment, 30% government and net exports are -5% (exports are 5% and imports are 10%). The GDP equation would look like this.

GDP = 0.65C + 0.10I + 0.30G + 0.05X - 0.1M

Now, let's say that the world economy is booming but the domestic economy is contracting, such that consumption falls 2%, investment falls 10%, government rises 1%, and exports rise 40% because of the booming global economy while domestic demand for imports is weak, so imports fall 10%. The GDP function will look like this.

GDP = 0.65(1-.02) + 0.10(1-.10) + 0.30(1+.01) + 0.05(1+.4) - 0.10(1-.1)

GDP = .637 + .09 + .303 + 0.07 - .09

GDP = 1.01

In our example, GDP rose 1%.

Now, to the unknowing, this would look like the economy is not in a recession. However, it is, because a broad-based decline is occurring.

One can differentiate between domestic demand and foreign demand, where domestic demand includes private and government consumption

GDP = (C + I + M + G) + X

You can re-arrange the components of GDP to private consumption + government consumption + foreign consumption

Private consumption is C + I + M, government consumption is G and foreign consumption is X, or

GDP = (C + I + M) + G + X.

In our economy at time 0, the equation would be

GDP = (0.65 + 0.10 - 0.10) + 0.30 + 0.05
GDP = 0.65 + 0.30 + 0.05

At time 1 it would be

GDP = (0.637 + 0.09 - 0.09) + 0.303 + 0.07
GDP = 0.637 + 0.303 + 0.07

Thus, private demand, which accounts for two-thirds of the economy, has fallen by 1.3% (0.65 - 0.637). This is a broad based economic contraction.

Further, the entire domestic economy is contracting if you include government spending. At time 0, economic output would be

GDP = (0.65 + 0.10 - 0.10 + 0.30) + 0.05
GDP = 0.95 + 0.05

At time 1, economic output would be

GDP = (0.637 + 0.09 - 0.09 + 0.303) + 0.07
GDP = 0.94 + 0.07

The entire domestic economy, which accounts for 95% of domestic income, would have contracted by 1% (0.95 - 0.94). The only reason GDP was positive in our example is because foreign demand, exports, rose 2% (0.07 - 0.05). The domestic economy is contracting. The American economy rising on the back of foreign demand is not a sign of economic health.

This is partly explains what was happening in 2008. There were other technical adjustments, such as a build in inventories, which skewed the health of the economy such that GDP was positive.

 

[PubliusInfinitum]

Let me explain why this is the case.

Here is the official definition of a recession.

The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, 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 wholesale-retail sales.

Business Cycle Expansions and Contractions

Now, I'm going to explain the technical reason why GDP can be expanding and still be in a recession. This is going to take some numbers, so bare with me.

If you have taken first year macroeconomics, this equation will be familiar to you

GDP = C + I +G +NX

Or, economic income equals expenditures on consumption, investment, government spending and net exports (exports minus imports).

The US economy is comprised something along the lines of 65% consumption expenditures, 10% investment, 30% government and net exports are -5% (exports are 5% and imports are 10%). The GDP equation would look like this.

GDP = 0.65C + 0.10I + 0.30G + 0.05X - 0.1M

Now, let's say that the world economy is booming but the domestic economy is contracting, such that consumption falls 2%, investment falls 10%, government rises 1%, and exports rise 40% because of the booming global economy while domestic demand for imports is weak, so imports fall 10%. The GDP function will look like this.

GDP = 0.65(1-.02) + 0.10(1-.10) + 0.30(1+.01) + 0.05(1+.4) - 0.10(1-.1)

GDP = .637 + .09 + .303 + 0.07 - .09

GDP = 1.01

In our example, GDP rose 1%.

Now, to the unknowing, this would look like the economy is not in a recession. However, it is, because a broad-based decline is occurring.

One can differentiate between domestic demand and foreign demand, where domestic demand includes private and government consumption

GDP = (C + I + M + G) + X

You can re-arrange the components of GDP to private consumption + government consumption + foreign consumption

Private consumption is C + I + M, government consumption is G and foreign consumption is X, or

GDP = (C + I + M) + G + X.

In our economy at time 0, the equation would be

GDP = (0.65 + 0.10 - 0.10) + 0.30 + 0.05
GDP = 0.65 + 0.30 + 0.05

At time 1 it would be

GDP = (0.637 + 0.09 - 0.09) + 0.303 + 0.07
GDP = 0.637 + 0.303 + 0.07

Thus, private demand, which accounts for two-thirds of the economy, has fallen by 1.3% (0.65 - 0.637). This is a broad based economic contraction.

Further, the entire domestic economy is contracting if you include government spending. At time 0, economic output would be

GDP = (0.65 + 0.10 - 0.10 + 0.30) + 0.05
GDP = 0.95 + 0.05

At time 1, economic output would be

GDP = (0.637 + 0.09 - 0.09 + 0.303) + 0.07
GDP = 0.94 + 0.07

The entire domestic economy, which accounts for 95% of domestic income, would have contracted by 1% (0.95 - 0.94). The only reason GDP was positive in our example is because foreign demand, exports, rose 2% (0.07 - 0.05). The domestic economy is contracting. The American economy rising on the back of foreign demand is not a sign of economic health.

This is partly explains what was happening in 2008. There were other technical adjustments, such as a build in inventories, which skewed the health of the economy such that GDP was positive.

ROFLMNAO... OH GOD! Now that is precious... 'The Economy can be EXPANDING AND RECEDING...' well there ya have it kids... all things are possible to those who BELIEVE!


Again kids, you're looking at the fundamental purpose of the Advocacy of Social Science... to LIE.

AKA: THE SUBJECTIVE SCIENCES...

Now this idiot just tried to convince you that an EXPANDING ECONOMY CAN EQUAL A SHRINKING ECONOMY... this in a scenario where one part of the economy, is contracting marginally, while another is expanding marginally, but a margin greater than that which is contracting... which is a net EXPANSION... but to the Subjective Social Scientist... THIS IS A RECESSION. LOL... Sweet mother that's hilarious...

What more do you need to know about her means to reason...

Recession means RECEDE... it doesn't mean RECEDE and EXPAND... Up doesn't also mean DOWN... Left, doesn't also mean RIGHT... and RIGHT doesn't also mean WRONG...

Unless you're a relativist... then Up is only UP from your perspective and Left is only LEft from your perspective and Right is only Right from your point of view...

It's deception... deceit... it's pure unadulterated evil. And as usual, it's being advanced by a fool...

Let the record reflect that Toro has opted to ignore her most recent loss... she's entirely disinterested in her position which DEMANDED THAT two consecutive quarters of negative economic growth were not necessary to track trends such as that of a receding economy... but there's a good reason for that... that reason being that it is DAMN DIFFICULT TO MAINTAIN A DELUSION WHEN YOU'RE FORCED TO ADMIT THAT YOU'RE FULL OF SHIT.

Funny stuff Toro.. has anyone ever bought it? If so could ya list them?

The simple fact is that the OP has been soundly and indisputably refuted... the US economy was not in recession in the last quarter of 07... and it's just no more complex than that.

 

[Ravi]

Quote:
The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, 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 wholesale-retail sales.

Nice! Looks like poor Pubby has been shown incorrect once again.

 

[Toro]

Again kids, you're looking at the fundamental purpose of the Advocacy of Social Science... to LIE.

Not everyone has nor needs an education, but no one displays the lack of one and a disdain for intellectualism as proudly as Publius!

 

[PubliusInfinitum]

Again kids, you're looking at the fundamental purpose of the Advocacy of Social Science... to LIE.

Not everyone has nor needs an education, but no one displays the lack of one and a disdain for intellectualism as proudly as Publius!

ROFLMNAO...

Well that's as solid a default concession as one is likely to get from a sychophant of the subjective sciences... and we're left with little choice but to accept it.

Let the record reflect that the OP of this thread has been repeatedly and indisputably refuted; that despite the innumerable, direct and unambiguous challenges for the OP and her psuedo-intellectual following to provide conclusive, objective evidence that the whole product of the US Economy, was objecitvely known to be RECEDING, there is no evidence on the table wherein the respective quotes of the Bush administration can be OBJECTIVELY SHOWN TO BE a function of neither incompetence, nor deciept... there is only psuedo-intellectual vomiting alluding to the SUBJECTIVE OPINION of a some Advocates of the Social Sciences, who demand, IN HINDSIGHT, that the slowing rate of growth in the last quater of 2007 was sufficient to conclude that the product of the US economy was in recession... and these impotent little projections that those who reject these subjective opinions are secular-heretics.

The argument which has carried the day is that where the word 'recession' is one wherein the concept is OBJECTIVE, requiring the subject to which the word describes to be RECEDING... a concept which relates to the antithesis of expansion... wherein the subject, in this case the Product of the US economy, is NOT GROWING, but is CONTRACTING. The argument has exposed the OP IT'S Self to be DECEITFUL wherein it seeks to use the slowing rate of POSITIVE GROWTH as the basis on which the judgment that the US econony was in a recession; a position which is wholly absurd...

But as usual, the Left has done the best they could God bless'em... and as has been noted many times, if they were incapable of voting, wherein their inherent intellectual limitations were NOT used to usurp the means of Americans to exercise their rights, then these idiots would be little more than comic relief and a danger to know one... but due to their chronic use their vote to infringe upon the means of Americans to exercise their rights, they are indisputably, a danger to every single freedom loving individual; they're a threat to every American on earth.

So let the record reflect that the default concessions which, again, fail to produce evidence which supports the implication intrinsic in the OP... is duly noted and summarily accepted...

 

[Toro]

Yes, yes, we know Publius. You have no education – at least in this subject – and little knowledge, so you resort to semantics whereas a wise man would have clammed up some time ago. This seems to be a recurring theme.

Having a technical discussion with a person such as Publius who has no subject education and little knowledge reminds me of the saying “Never teach a pig to sing, it wastes your time and it annoys the pig.”

So these are our options on who is best qualified to make such a determination -

An institution that is one of the highest-regarded in the world in economics, staffed by individuals with tremendous knowledge and technical skill who have spent their lives dedicated to researching their discipline, advised by and employing Nobel Prize winners, apolitical in nature, and whose determinations are accepted at the highest levels of power in both government and the private sector,

or

PubliusInfinitum, who once mocked a basic function every Econ 101 student learns in the first week of class because it was posted on Wikipedia.

Intellectualism or anti-intellectualism. That’s your choice.

If you are a Republican, you should be informing Publius that he is making Republicans look bad and merely reinforcing the message of the OP.

Just for the record, before I got into this fruitless task of trying to teach a pig to sing, several pages back I noted that I do not blame most of those Republicans in the OP for saying what they said at the time. In fact, I would have expected President Bush, or any President, to remain upbeat.

 

[PubliusInfinitum]

Yes, yes, we know Publius.

At this point, you're projecting the implication that you're about to address the argument... which is what is expected of an intellectual...

You have no education – at least in this subject – and little knowledge, so you resort to semantics whereas a wise man would have clammed up some time ago. This seems to be a recurring theme.

Se·man·tics [sə mántiks]
n (takes a singular verb)
1. study of meaning in language: the study of how meaning in language is created by the use and interrelationships of words, phrases, and sentences for the purpose of effective rhetorical continuity, towards the advancement of sound communication.

A wise man understands the language... A wise man recognizes that the language is the means by which humanity communicates... and he recognizes that those who hope deceive will often and most likely misuse the language to mislead their audience... while such may by a function of ignorance; a wise man recognized that ignorance of the language is no excuse to misuse the language and that deception born of ignorance is no more acceptable in the end as deception born of intent.

A deceitful man will condemn the study of language because his deceit depends upon the misuse of that language; and where such a man further proclaims themselves as a learned intellectual; studied, expert in a given discipline of thought and whose point is stymied by the language; THAT MAN is a foolish man indeed...

Having a technical discussion with a person such as Publius who has no subject education and little knowledge reminds me of the saying “Never teach a pig to sing, it wastes your time and it annoys the pig.”

What cracks me up about you people is,$ how you CLAIM TO BE WELL EDUCATED... but you are incapable of arguing outside of fallacious reasoning. There is NO MEANS for an education to be present where the evidence of the education exist absent sound reasoning. These are mutually exclusive concepts; two parallel concepts which are incapable of intersecting... What we're looking at friends is the confusion of indoctrination, with education. Indoctrination which serves PURELY, to 'educate,' purely to provide sufficient information to reinforce an otherwise indefensible ideology.

So these are our options on who is best qualified to make such a determination -

A sound decision in deciding which is best qualified, is to hear the opposing arguments and take from those arguments the reasoning on which the respective arguments rest... the unsound decision rests upon irrelevant criteria... and the unsound argument rests upon appeals which obscure and distract FROM THE ARGUMENT...

An institution that is one of the highest-regarded in the world in economics, staffed by individuals with tremendous knowledge and technical skill who have spent their lives dedicated to researching their discipline, advised by and employing Nobel Prize winners, apolitical in nature, and whose determinations are accepted at the highest levels of power in both government and the private sector,

or

PubliusInfinitum, who once mocked a basic function every Econ 101 student learns in the first week of class because it was posted on Wikipedia.

Such a distraction is one which appeals to authority... such as the above ad Verecundiam rant... it seeks to dismiss the opposition's argument by appealing to the implied authority in the source of their implied argument; which even a cursory examination of this thread will show is the case here... There is not a SINGLE POST from this individual which establishes any evidence that the economy was in recession in December of 07... None. There is only a plea which demands that her resource states that such was the case and the rancid fallacious appeal which begs that we accept her source as infallible... and THIS based upon the projection that the resource is 'held in high regard... and staffed with knowledgeable people; an appeal which is stacked directly upon another vacuous appeal to what she hopes is already a popularly held opinion... that her opposition is ignorant... which she hopes to reinforce by further projecting baseless assertions regarding that opposition.

Intellectualism or anti-intellectualism. That’s your choice.

An intellectual is an "intelligent person: somebody with a highly developed ability to reason and understand, especially if also well educated and interested in the arts or sciences or enjoying activities involving serious mental effort..."

Now the choice becomes one wherein one is encouraged to believe that the chronic advancement of invalid reasoning, fallacious appeals and other obfuscations designed to AVOID THE OPPOSITIONS REASONING... truly exemplifies the intellectual... or is intellectualism exemplified by the opposition whose unwavering adherence to sound continuity of the language used to express the extensive openly displayed reasoning which stands as the basis of their argument and demanded that all who were engaged in the debate observe the commonly recognized definitions of the words and phrases advanced in laying out what stands as their argument.

If you are a Republican, you should be informing Publius that he is making Republicans look bad and merely reinforcing the message of the OP.

There is not a scintilla of evidence in support of this assertion... NO WHERE IN THIS THREAD is there a single element of reasoning which would support this... and as such, there is absolutely NOTHING accept an empty appeal to what the member HOPES is ALREADY a popularly held opinion, which this member expects that such an appeal to which she expects this farce will effectively cling.

Just for the record, before I got into this fruitless task of trying to teach a pig to sing, several pages back I noted that I do not blame most of those Republicans in the OP for saying what they said at the time. In fact, I would have expected President Bush, or any President, to remain upbeat.

And she closes as she began... projecting an baseless assertion... THAT the respective comments advanced in the OP were mistaken... she now declares that they were honest mistakes... but she comes to this conclusion on ABSOLUTELY NO EVIDENCE, beyond the implied authority of the 'widely respected' resource which she's continuously shoved at us...

Again... this argument revolves around no contest beyond the simple request that the opposition produce data which shows that a RECEDING TREND of product of the US economy was realized in December of 2007... With receding being defined as NEGATIVE GROWTH; MEANING A CONTRACTION WHERE THE US ECONOMY DID NOT GROW, BUT SHRANK... declined, dwindled, ebbed, retracted, contracted: THAT IT FAILED TO GROW and WAS LESS THAN IT WAS IN THE PREVIOUS REPORTING PERIOD... I've shown that such was not the case... the US Economy GREW in the 4th quarter of 2007 and that friends is NOT DEBATABLE... and what is INDISPUTABLE is that the data known to those in leadership AT THE TIME... indicated just that.

The OP fails and it fails in total... wholly and without a single facet remaining whole.

 

[DiveCon]

dang, PI, you really need to work on pithy