Recession officially started in December 2007, Dow drops 680 points

I remember having a conversation with a very conservative friend in December 2007; it could have been in January or February of 2008 as well. I declared then that the economy was very close to recession; all of the indicators showed it. The number of jobs being created was slowing, the housing bubble was on the verge of collapse and while the Dow was still very high, there were signs that it would begin to fall too...

My friend, a disciple of Sean Hannity, declared how wrong I was, how there was no recession in sight, that I was a liberal boogieman trying to bring socialism to the free market. He cited obscure stats on websites, and mentioned President George W. Bush and Sean Hannity as evidence.

I scoffed. I told him obviously his view had everything to do with right-wing politics, and mine had nothing to do with politics. I know little about the complexity of economic theory, but I know who are gutless ideologues, and who are smart people assessing a situation based on their intelligence, and at the time all the people who I believed were smart, were telling me that the economy was in trouble.

Flash-forward to today:

The difference, of course, is that the country entered a recession exactly one year ago, at least according to the Business Cycle Dating Committee, which is made up of seven prominent economists, most from the academic sector. The group made their official announcement on Monday that the economy entered a recession in December 2007.

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators,” the members said in a statement. “A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”

The committee noted that the contraction in the labor market began in the first month of 2008 and said that the declines in most major indicators, like personal income, manufacturing activity, retail sales, and industrial production, “met the standard for a recession.”

“Many of these indicators, including monthly data on the largest component of G.D.P., consumption, have declined sharply in recent months,” they wrote.

Well, let me say this now to George W., Sean Hannity and my friend: I fucking told you so. In my view, this is just another data point that partisan hacks are the worst way to run a government. I've made this argument before on this blog, so I will not bore you with more rants, but geez, how can one man, his administration and his cronies, be so hugely wrong about so many things?