Recession?

 

"The bruised economy limped through the first quarter of this year at only 0.6 percent as housing and credit problems forced people and businesses alike to hunker down."

Note the almost laughable "doom and gloom" by the despicable Associated Press, and AOL, in today's "lead" paragraph on the news that the economy GREW in the first quarter.  The headline/lead COULD have been:  "U.S. Not in a Recession".  Instead, you get things like "bruised economy", "limped", and "hunker down".  While the economy is hardly in good shape, it is actually amazing to have teh housing bubble burst as badly as it have, with record after record being set on diesel and gasoline prices, and still have the economy doing this well.

Problemm for the media, leftists, and Democrats (that unholy trinity who are One) here:  BY DEFINITION, you can't have a RECESSION if the economy grows at all.  In fact, a recession requires TWO consecutive quarters of CONTRACTION.  GROWTH in the first quarter almost guarantees that we are NOT in a recession, and further that we will NOT be in a recession this year--although it is an absolute certainty that economic cylces wll produce recessions in the future, even if we elect nothing but Democrats.

Now this matters only if you are desparate to use the "R" word, like the media, leftists and Democrats (of the political kind). 

You can see the archives of this blog for a CORRECT analysis of this situation (entry entitled "Recession and Safety", among others). 

Does it really matter whether the economy grows by .6% or falls by .2 percent?  Of course it doesn't (much).  We ARE in an economic slowdown (which, like recessions, inevitably happens from time to time).  Whether that slowdown ended up as a MILD recession, or merely a pause in growth, is IRRELEVANT.  In either event, the economy is NOT THAT BAD, and also NOT THAT GOOD.  What matters is not to panic and make it much worse.

The economy is already primed to come out of this slowdown in the last half of this year.  The "stimulus" checks (whether a good or bad idea) are about to begin being received.  The Fed is doing its best to help.  The challenge is for the politicians not to irrevocably HURT the future of the economy, n an election year, before it becomes bovious that the economy will recover without any further action from them.  This is actually a pretty big challenge, and this problem of people being conditioned to look to the Federal Government for an IMMEDIATE fix to all problems is reaching the critical stage. 

Now a continuing surge in oil (gasoline and diesel) prices could be about the ony thing to derail the economy's resumption of growth.  That is why I favor McCain's two good ideas for this summer:  a moratorim on Federal fuel taxes and a moratorium on purchasing more oil for the strategic oil reserve (it being absolute insanity to continue purchases at these astronomical prices).

That does not change the fact that economic cycles occur, and that even recessions (of a mild kind) are necessary for the long term health of the economy (preventing the periodic excesses, and "irrational exuberance", from getting out of control). If we develop the idea that the Federal Government must PREVENT all cyclical, economic downturns, and PANIC at every sign of pubic concern about the economy, then we truly will be DOOMED--although the despicable Associated Press will never understand what happened.