When I first read Robert Samuelson’s Washington Post column reasserting that it’s still the economy, stupid, this caught my eye:
Here’s a report from economists Beth Ann Bovino and Satyam Panday of Standard & Poor’s. There have been, they say, 11 economic expansions — periods when production and employment are generally increasing — since World War II, averaging just over 58 months, or nearly five years each. By this measure, the present expansion — which started in the third quarter of 2009 and has lasted 78 months — is past its prime and could be near its end.
But the S&P economists doubt that. Indeed, they argue just the opposite. “We may be, more or less, at midcycle,†they write, “with room to grow and the underlying momentum to do so.†Translation: With a little luck, the expansion could run another five or six years.
According to the National Bureau of Economic Research, the official scorekeeper on U. S. recessions, the longest economic expansion of the post-war period was 128 months (the expansion of the 1990s). Two questions. Do you really think that our present economic circumstances are comparable to that record-breaking expansion? And do you really think that the economy will continue to expand for another 72 months? That would make the present expansion 150 months in duration.
I would be happy to take the action against that bet with a little cash money. IMO that the economy will continue to expand for another six years is absurd on its face. If the present trend continues, we’ll be in recession by the end of the year. Growth is basically zero.
Economists keep saying that the business cycle has been licked. Somehow that never materializes. Of course with expansions like this who needs recessions?
I never bet with money of any significance, but feel free to ridicule me if we don’t make a 150 months of growth. I’m not convinced that the S&P economists have some special knowledge, but they put a number out there that is probably as good as any. Nor do I believe the business cycle has been licked. I just think growth has been too damn slow for a contraction in the foreseeable future.
No shiny new dimes?
If we hadn’t changed the way we calculate GDP we’d be in recession right now. As it is, with services now “catching up” with manufacturing, we appear to be on the precipice. I’m at a loss to cite, except for one consumer confidence survey I saw, any statistic that would support a claim of continuing growth. They are all in an untenable state or moving the wrong direction.
I think the folks at OTB would take the bet though. From what in read it’s all roses and clover.