When is a recession not a recession?

For several months now, I have heard plenty of wailing and gnashing of teeth over the supposed recession. But is it really happing?

First of all, let's start with the definition of a recession: two consecutive quarters of negative growth in the economy. When Prime Minister Stephen Harper conceeded that Canada could be "technically" in a recession, he was absolutely right - that could indeed be the case. He could have said the same thing two years ago and still been right, even though the economy was booming at the time. When you are in the middle of a recession, there is no way to know for certain if you are or not - it is only by looking back at the previous two quarters that one can say with certainty that a recession has occurred.

So without that data, how come the press has been screaming "recession!" for several years?

Yes, the housing market took a beating over the last six months or so, but the housing market is not the entire economy. Anyone paying any attention to the housing market over the last few years would have seen that the housing prices were well above the actual value of the homes, and would put off buying until the housing bubble popped. Yes, GM and Ford are treading water and slowly sinking, but does that have anything at all to do with today's economic conditions?

Sixty percent of the economy is consumer spending - everything from home furnishings to beer to bubble gum. Housing and cars and other big-ticket items are not part of that. So, if enough people finally start to believe that there is in fact a recession, then their spending will drop and you will indeed get your recession. It becomes a self-fulfilling prophesy, as long as the press screams recession! long enough and loudly enough.

So is there really a recession going on? For the answer, we'll have to wait at least until the end of the quarter. But, until then, I think that one needs to look at the "canaries in the coal mine" of the economy.

If there is a recession then the ones who will go bankrupt first are the ones who live the closest to the edge of bankruptcy all the time - farmers. Go for a ride in the countryside and look for the "For Sale" signs. How many do you see? I have driven thousands of kilometers around the countryside in my area over the last few months, and I have seen a grand total of two for sale signs.

Another canary to look for is trains. Count the number of cars in the next train you see. Compare that to the number of cars that trains were hauling two years ago. See any difference? See any difference from 1981? I sure do - back in '81, there were a lot fewer cars being hauled at any one time, and there were fewer trains. The last train I saw a few nights ago was pulling over a hundred cars. Can a railway afford to do that unless there is demand to move that amount of goods? Does that sound like a recession to you?

One more canary is the Help Wanted ads. Here in the Edmonton Alberta area, there are so many jobs available - good jobs - that many companies have taken ads out on the radio advertising positions. Not just oil companies either, but all sectors of the economy. Is that a recession?

What are the canaries like in your area?

Evening update: I am betting that you are seeing the same things that I am - very few farms for sale, lots of cars on the trains, plenty of jobs available. That doesn't look anything like a recession to me. It certainly doesn't look like the recession of '81, when over half of the farms in this area were for sale, trains were pulling 40 cars, and there were no jobs available.

So, why has the press been screaming recession! for years? Who benefits from frightening consumers? Who benefits from ramming an $800 billion "stimulus" package through Congress and the Senate, and similar bailout packages in Canada and other G7 countries?

Well, it certainly isn't average people. That stimulus package is costing every man, woman and child in the USA $2600 apiece. There goes a big chunk of your kids' college fund, poof gone. And where is it going? To prop up GM workers making overpriced union wages and benefits, which will sink the company in a few years anyhow? To expanding the power of government over your life, in the amount they will increase your taxes and regulations controlling your life, to adding to the debt load the baby boomers are leaving their great great great grandchildren?

The people of the USA (and by extension the people of every country with economic ties to the USA, in particular Canada) are being frightened and swindled and glibly accepting the most massive intrusion into their finances in history - all based on a supposed recession for which there is no evidence until the end of the quarter. Who benefits? Who has a vested interest in frightening average people and forcing through this huge increase in government spending with little debate?

Look for yourself, check out the canaries in your area. Has the press been telling the truth about the economy? Or have they been telling you deliberate falsehoods in order to benefit their friends in the unions and Leftist political parties?