
As someone with a business degree, I took two economic classes; Macro and Micro Economics. Even without these classes, I understand the difference between a economic slowdown and a recession. A recession is defined as two quarters on negative growth. Here is the common definition used for a recession in the economy:
In macroeconomics, a recession is generally associated with a decline in a country’s real gross domestic product (GDP), or negative real economic growth. According to widespread definition, a recession occurs when real growth is negative for two or more successive quarters of a year.
Again negative growth for two quarters, not slowing growth. Here is what Obama stated this week:
There is little doubt we’ve moved into recession
A recession? If you look at the last few quarters of economic growth, the US economy is growing slower than in the past, but the US economy has not had a negative GDP balance in decades. Not under President Bush or Bill Clinton. The economy is growing and Obama may need to read up on economics 101 before making claims that there is “little doubt we’ve moved into recession.”
Does this underscore Obama’s inexperience in dealing with economic problems or is he stepping up the rhetoric to get elected President and/or to start a new round of stimulus checks? Either way, I’m a little disappointed in his inability to know what a recession is.
Are we in terrible times? Well, lets look at the past few months.
Just yesterday Americans lined up for a $300 iPhone, in many cases waiting 6+ hours. Fortune estimes Apple will sell up to 3 million iPhones in the first weekend alone world wide, or well over a million iPhones in the US. That is over $300 million in sales in the US and about $1 billion in sales overseas for a phone. Yes, a phone!
Microsoft shattered records having sold 1 million units of Halo 3 in pre-release. At $60 a pop, US consumers spent $60 million on a game they couldn’t even touch.
So, while Obama thinks we are in a recession, I really hope he doesn’t get geared up for a second round of stimulus packages a.k.a. “getting the US further in debt so Americans can buy junk from China.” I recommend Obama get a new economics adviser and rent Grapes of Wrath to catch up on what bad economic times really are.