Which GOP Candidate Was Right?

[kerrin]

According to current popular opinion the recession started in 2007. Interesting, because I recall that questions about whether or not we were in a recession back in January of 2008 came up during the Republican Presidential Debates. Let's take a look back and see which candidates seemed to understand the situation and which did not.

Jan 6 Milford, NH (http://www.cfr.org/publication/15179/republican_forum_transcript_fox_news.html?breadcru mb=%2Fcampaign2008%2Fspeeches)

Romney: Senator McCain was one of two Republicans who voted against the Bush tax cuts. I believe the Bush tax cuts helped our economy grow and are one of the reasons that we’re not in a recession today.


Jan 10, Myrtle Beach, SC (http://www.cfr.org/publication/15249/)

Chris Wallace: Governor Romney, do you believe that we're headed for a recession?

ROMNEY: Well, first, Chris, let's get the record straight. Could we be headed for a recession? Absolutely. Do we have to be headed for a recession? Absolutely not.

McCain: And by the way, I don't believe we're headed into a recession. I believe the fundamentals of this economy are strong, and I believe they will remain strong. This is a rough patch, but I think America's greatness lies ahead of us.

Wallace: Do you believe we're headed for a recession? And do you have a short-term government economic stimulus package that you think would be more effective than what you've heard so far from Governors Romney and Senator McCain?

HUCKABEE: Chris, I hope we're not headed toward recession, but if we are, there's four factors that will be the reason..

Paul: I believe we're in a recession. I think it's going to get a lot worse if we continue to do the wrong things that we've done in the past, that it's going to be delayed, just as what happened in the Depression.

Thompson: We still have a bunch of two-handed economists in Washington. On the one hand, we may go into recession, and, on the other hand, we may not. Nobody knows.

Jan 30 Simi Valley, California (http://www.cnn.com/2008/POLITICS/01/30/GOPdebate.transcript/index.html)

McCain: And finally, could I just mention on the issue of rebates, fine, because part of this is psychological. Part of the problem we have, of course, in any recession is psychological. And I'm still optimistic that nothing is inevitable.

[m42]

Has the recession actually begun yet? We still need two consecutive quarters of negative growth.

[John A Roark]

Oh, m, sticking to those old tried and true classic definitions we learned in Economics 101...such a sweetheart, such a cutie-pie!
Don't you know things have changed? We're in a recession when the government tells us we are, silly--and they never lie or get their facts wrong:o

[John A Roark]

Couldn't write that last without cracking up!

[kerrin]

Has the recession actually begun yet?
This is a good question. The fokes over at the National Bureau of Economic Research (NBER) recently said that we are and have been since 2007. Of course they deviate from the basic academic economic definition you stated. Instead they expand the indicators, say these are more accurate, and say a recession is reduced economic activity over a period of time... sometimes referred to as a "business cycle" (ah, sounds so sweet). ;)

We still need two consecutive quarters of negative growth.
So this is based on GDP, right?... not exactly a very accurate picture of economic health these days. GDP can/will show economic growth even when there is money spent on none wealth-generating activities.

The Hayek's or Ludwig von Mises' of economics would say it's a debt cycle, a boom/bust cycle... similar to a recession... according to them it's slowed growth because of an unsustainable and artificial inflation in GDP.

So it would seem it depends on which economic theory you go with for defining recession, but I'm no expert.