Newspapers love anniversary stories, which is why in recent weeks they have run recollections and ruminations on the passing of five years since the start of the Great Recession.
The opportunity for such stories is multiplied by the fact there’s no one official event or date that signified the start of the recession. Do you measure it from the collapse of Lehman Brothers, the passage of TARP and other bailout bills, the first day of the first quarter in which the economy was officially denoted to be in recession? How about a local favorite, the day Washington Mutual went down, which occurred five years ago this past week?
Anniversary stories do provide the opportunity to ask questions like “Where are they now?” and “Where are we now?” and “Why did this happen?” and “What does it all mean?”
But overlooked in the discussion of when the recession started and the downturn’s long-run implications are two larger, far more crucial questions.
“When did it end?”
And, “Did it end?”
While we are diligent about commemorating discrete events that occurred on specific days, we are less so at remembering the end of long-running sagas. The concluding date of the Great Recession? Maybe we don’t have one yet.
You could always go with the “official” designation of the end of the recession as June 2009, which is how the National Bureau of Economic Research pegged it. In terms of economic growth data, that might qualify. In the real-world economy, the notion that the recession ended in mid-2009 is laughable. Certainly those who lost jobs and found it difficult to replace them, or struggled to keep businesses alive, fail to see the humor in such a declaration.
Or you could go with the stock market which, if measured by the Dow Jones Industrial Average, is not only trading at double its 2009 levels but has in recent weeks hit record levels. Or you could rely on data points such as declining unemployment rates, rising real-estate prices or the recent dearth of bank closures like the aforementioned WaMu (or, in Pierce County, Rainier Pacific, Westside Community and Pierce Commercial) to make your case.
Provided, that is, you want to make it. Many don’t. Maybe their evidence is more anecdotal and intangible – the number of observable foreclosed houses in their neighborhoods still awaiting buyers, the confidence they feel in their prospects, the Fed’s decision to keep interest rates low in the continuing hope of providing some fuel to the sputtering economy – but it’s no less valid for not being summarized in a chart.
Why does it matter that we can’t find out a definite date on the recession’s end, or even concede it might have run its course? Multiple reasons. Consumers and businesses exhibit different economic behavior if they’re unconvinced the bad times are over, as compared with how they act in a climate of prosperity (which feeds back into the economy). If we don’t know the recession ended, we won’t know what got us out of it and what works to end a severe downturn.
Then again, given that people are still debating that question in relation to the Great Depression, maybe we never will reach consensus on our own episode of economic unpleasantness.
Most of all, it’s harder to learn lessons about what we’ve been through if we’re still going through it. We won’t have the benefit of time and distance to allow sufficient analytical perspective.
Some, of course, have already concluded that it’s all behind us and there’s nothing to be gained or learned by focusing on the past, whether it’s government spending and mounting debt loans or Wall Street’s failure to understand risk management or what it buys and sells — witness the multibillion-dollar loss recorded by a London trader at JPMorgan Chase.
The one upside to not knowing when the recession really ended? We won’t be pestering you with stories commemorating anniversaries of that date. That’s meager compensation, though, for those who don’t have time to mark either the start or the end of the Great Recession because they’re still dealing with it.Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.