Larry Beinhart’s Body Politic

bush, bushit, boom, and bust

by Larry Beinhart, April 29, 2008

Did you know there is an “official arbiter of when recessions begin”?

It’s called the National Bureau of Economic Research (NBER). It’s a “private, non-profit, non-partisan” organization. It boasts that 16 of the 31 American Nobel Prize winners in economics have been researchers there.

The president of NBER announced on March 15 that we are now officially in recession. He also mentioned that “it will last longer and be deeper than the last two recessions, which lasted only eight months from peak to trough. It could well be longer and deeper than the recession in the early 1980s that lasted 16 months.”

The reality—for ordinary people—is that the economy has actually been in recession since 2001. It began with an official recession. Which officially lasted but eight months. Then there was a “recovery.”

But it was a very peculiar recovery. It was a “jobless recovery.” The first ever. Somehow the economy had recovered, but the US continued to lose jobs in the private sector. Employment increased in the public sector, and people in the National Guard called up to service in the War on Terror were counted as employed. But even with that added in, there was actual job loss for several years.

In Bush’s second term there was some job growth, but not enough to keep pace with the increase in population.

Yet, according to the media—the New York Times, the Wall Street Journal, CNN, CBS, MSNBC—the recovery was “robust.” Unemployment was low. Growth was high. And they sang this refrain at least through the end of 2007. Not only were jobs being lost, jobs were paying less. Median income was declining. Nor did it ever turn around. From 2001 to 2007, annual average family income went down by over $1,000.

“This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did.” (“Economic Scene: For Many, a Boom That Wasn’t” by David Leonhardt, the New York Times, April 9, 2008)