Do not think about, write about or deal with human behavior without determining the effects of incentives.
It’s not a question of speaking truth to power, but speaking truth to really incapable people who give hysterical a bad name. We’re in crisis and the only way to be saved is to let us save you. The only way we can save you is by spending a lot of money.
And we hark to H.L. Mencken who said, "The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."
from the National Post, April 16, 2010.
“Not-so-Great Recession
“Don’t listen to the political rhetoric and media hysteria. Compared to others, this last recession was only average.
Canadians fared comparably well during the short 2008/2009 recession
It is almost impossible to downplay the hysterical economic reporting that has transpired over the past year and a half. Since January 2009, “Great Recession” has been used in almost 750 articles in Canadian newspapers; 82 times in the Globe and Mail (over one and a half times a week!); 72 times in the National Post and 54 times in the Toronto Star. Expressions such as “the worst recession since the Great Depression,” “the worst recession since the 1930s” and “the worst recession since the Second World War” have been used over 375 times. When TV, radio, and the internet are added, it is surprising that Canadians are not stocking up on canned food, water and other supplies in anticipation of the apocalypse.
Our politicians haven’t helped, either. Federal Finance Minister Jim Flaherty has repeatedly declared the 2008/2009 recession, “the most serious economic crisis since the 1930s.” Same goes for Liberal leader Michael Ignatieff who called it “the most serious economic crisis since the Second World War.” In fact, the severity and depth of the 2008/2009 recession is perhaps the only thing on which the three main federal parties agree; NDP leader Jack Layton has also called it “the worst recession since the 1930s.” And let’s not forget Dalton McGuinty, premier of Ontario, who billed it “the biggest economic crisis in 80 years.”
Is this really the greatest recession since the Great Depression? Not according to the data.”
The media always does its part. These are Canadian examples, but the government and media in the US were not less hysterical.
“The most recent recession began with a decline in real GDP in the fourth quarter of 2008 and lasted until the second quarter of 2009. Comparing the 2008/2009 recession to others since 1929 reveals it was shorter than the recessions in the early 1990s or the early 1980s. Of the 12 recessions recorded since 1929, nine were either longer or equal to the 2008/2009 recession.
In terms of severity, the 2008/2009 recession was comparatively mild. For instance, real GDP declined by 3.6% between the fourth quarter of 2008 and the second quarter of 2009. The 2008/2009 recession was slightly more severe than the 1990/1991 recession but much more mild than the 1981/1982 recession.”
The goods news is that the 2008/2009 recession certainly does not live up to its “Great Recession” billing, nor was it the worst recession since the 1930s or in fact, the Second World War. Whether one uses declines in real GDP, decreases in employment or increases in the unemployment rate, the length and severity of the 2008/2009 recession compares favourably to earlier recessions. While labelling the recession as “the worst since” might make for great political speeches and media hysteria, it is simply not factual.”
Meanwhile, useless stimulus packages have been instituted with borrowed money, ensuring the next recession will be quicker to arrive.
Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies
