The Recession Has Ended, Again

Ever since the bubble burst, economists have been predicting recovery. But with the President weighing in affirmatively, this time might be different.

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It's not every day that the president directly enters a debate with a newsweekly. But when Newsweek's Daniel Gross declared on the magazine cover that "The Recession Is Over," Obama singled it out for reply:

"I don’t know whether you’ve seen the cover of the latest Newsweek magazine on the rack at the grocery store, but the cover says, 'The Recession is Over.'"

"I bet you found that news a little startling. I know I did."

He softly tweaked the headline, after squeezing in a little praise of how the hemorrhaging of jobs had slowed.

"We’re losing jobs at nearly half the rate we were when I took office six months ago. So, we may be seeing the beginning of the end of the recession."

Daniel Gross, both flattered and miffed at being used as a soapbox, couldn't resist tweaking the president in turn. He not only points out that Obama missed the article's less-than-sunny subheading ("Good luck surviving the recovery"), but argues that his speech echoes, point for point, the arguments he made:

"It's common to hear journalists complain of being overworked. And in this case, it's true. In addition to writing the first draft of history, we seem to be writing the first draft of the president's speeches"

This exchange comes as part of a wider trend of pundits placing bets--for the umpteenth time--that the "Great Recession" has reached its close.

  • The Pace of Decline Has Slowed, says Paul Krugman in an interview. "The current economic situation can be compared to a patient who has been rushed to the emergency room in critical condition and only just saved."
  • Data Shows a Solid Improvement, says Douglas A. McIntyre. "There is enough data in at this point to say with a reasonable amount of authority that the economy bottomed this summer and that this recession is over."
  • House Prices Are Turning Around, says William Greiner. "It appears that the housing market is currently attempting to climb out of the hole it has been in for quite some time."

Of course, there are those who disagree. A July survey of economists found that a majority believe we still haven't hit bottom, and Peter Coy at Businessweek rebutted optimists by rattling off five reasons why we have much farther to fall.

But if we've learned anything, it's that economists' powers of prediction are less than perfect. In a roundtable this week, the Financial Times--no populist rag--addressed the question, "What is the point of economists?" David Marsh had the most memorable answer:

"Economists serve no great purpose. They are an appendage of modernity that has proliferated since the second world war, like pizza parlours or speak-your-weight- machines at railway stations. But now that we have them, we cannot do without them."
This article is from the archive of our partner The Wire.