Like the blind wise men who finally get around to correctly identifying the elephant, the National Bureau of Economic Research declared Monday that the U.S. economy is in recession — and has been since last December.
Of course, millions of Americans knew with certainty the nation was in recession on Feb. 28. That’s the day hapless President George W. Bush kept intact his perfect record of failed prognostication when he said, “I don’t think we’re headed to recession. But no question, we’re in a slowdown.”
Headlines across the country echoed Bush’s fully informed misjudgment of undeniably alarming current events. Canaries were keeling over throughout the American economic coal mine, but Bush was oblivious. (As an aside, I’d like to have the “Bush was oblivious” T-shirt concession. Talk about a way to beat the recession.) There was an ongoing presidential campaign, and the Bush administration downplayed the warning signs and foundering economic indicators.
To hear the right-wing media and political demagogues tell the story, all talk of recession was a figment of the Democrats’ imagination. Rising unemployment figures, record mortgage foreclosures, rocketing gasoline and grocery prices, and free-falling housing construction starts were all part of some sinister Democratic campaign strategy.
When historians finish studying Campaign ’08, they’ll note that the GOP’s “Deny the Undeniable” economic strategy made U.S. Sen. John McCain look hopelessly out of touch with working people everywhere. And he suffered a body blow when his top economic adviser, Phil Gramm, arrogantly postured in July, “You’ve heard of mental depression; this is a mental recession. We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline …”
But economists back in February said they believed the country was in or close to recession. It wasn’t a question of whining; it was a matter of job loss, rising gasoline and bread prices, and crushing home foreclosures. Now the academic experts from the Bureau of Economic Research, a private, nonprofit research outfit, have weighed in and measured the recession’s official statistical start time.
It’s something most Nevadans could have pegged without the benefit of an advanced degree.
Unemployment last month rose to 7.6 percent statewide, according to the Nevada Department of Employment, Training and Rehabilitation. But the trouble signs are darker still. The once high-rolling construction industry is sputtering badly. In this state, the health of the building trade is directly linked to the health of the economy.
While housing sales in Nevada might appear to some experts to have bottomed out, the challenge is separating the standard sales from the distressed sale of foreclosed properties. Home Builders Research reported in November that new home sales were down 46 percent.
Nationally, building permits to date in 2008 dropped 14.5 percent, the biggest tumble in 24 years. Locally, a mere 329 building permits were issued in Southern Nevada in October.
But you don’t need an armload of statistics to know you’re in recession. And it’s an insult to working people to split hairs on the subject.
When you start using your credit cards to cover basic necessities, you’re officially in the neighborhood of recession. I hear from people every week who survive by robbing Visa to pay MasterCard.
When you wake up one morning tossed from your home or find your residence flanked by empty houses, you don’t need someone with an economics Ph.D to tell you this is a large, long-term problem. When it comes to finding a solution to our economic quagmire, neither side of the political aisle has much credibility.
The “official recession” story wasn’t Monday’s only news flash. We also learned that NV Energy, formerly Nevada Power, is seeking a 14.9 percent rate increase overall, which would amount to a 17.5 percent increase for residents. This request comes in the face of the worst economy in decades at a time when many thousands of Nevadans are barely holding on and thousands more are slipping under.
As of June 2007, the company’s CEO and chairman at the time, Walt Higgins, received $4.9 million in salary and other compensation. Senior Vice Presidents Donald “Pat” Shalmy, Roberto Denis and Jeffrey Ceccarelli received $1.4 million each.
Now that we’re officially in a recession, someone in authority should tell NV Energy to get stuffed.
“Tell NV Energy to get stuffed.”
That slogan is sure to sell some T-shirts, too.
John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith/.