Greensizing Part 2

Recession, Recovery, and Other Economic Doublespeak

The past two "recessions" were long, protracted affairs, running for several years, with widespread joblessness and wage stagnation. Curiously, the official "recession" only lasted a very short time: a matter of months. But frankly, without looking at charts of data, I could never tell the difference between the recession and the recovery.

The official definition of a "recession" is that the GDP, the total value of goods and services in the country, gets smaller. Once it stops shrinking, the recession is over, no matter what else may be happening. The one difference I can glean is that during the recession, the value of my retirement funds drops markedly, but during the recovery it kind of wiggles around. In terms of things that matter in my immediate present, things actually got worse during the "recovery." Wages froze. Jobs vanished. Education and social services were slashed.

A mainstream economist will tell you, of course, that when the GDP is growing, it means that business can expand and invest, hire more workers, pay them better, etc. They've got it backwards. When the economy is not growing, these things don't happen. It's kind of like rain. Rain doesn't mean you'll get a good hay crop, but lack of rain means you won't.

Similarly, over the past decade or so, there wasn't any "inflation," even though food prices have risen markedly, healthcare has skyrocketed, and the price of gasoline has doubled. Turns out that "inflation" is calculated by leaving out "volatile commodities," ones that go up and down quickly, which, unsurprisingly, is mostly food and fuel. The decrease in the price of iPads, 48" TVs, and computer-assisted toasters offsets other increases, and prices are relatively stable. If you are spending a lot of your income on toys, everything is fine. But if most of your income goes to food, fuel, and healthcare, the cost of living is getting higher and higher.

Standard measures of the "economy" are disconnected from the economics of living in America. We don't even have a word for the situation we're in now. A "recovery" doesn't mean we're going to recover. The lack of "inflation" doesn't mean that prices don't inflate. A little Orwellian doublespeak is always handy.