Recession = Banana
By Jason on Mar 26, 2008 in Featured, Humor
Are we in a Banana? Or maybe it’s a Pickle? Perhaps it was an Elephant?
What in the world are we talking about?
According to our sources at the Federal Reserve, employees there are not allowed to use the word ‘recession’ to identify what is commonly known in economics as a recession. Employees instead have to replace it with another, completely irrelevant word to identify the phenomenon; a tradition that has supposedly been in play ever since the early 70’s under the Ford administration and Herb Stein.
This practice is most likely used as a strategy to stave off the media circus from creating unnecessary attention and frenzy in the marketplace whenever such cursed words are uttered by public officials and especially by those closely related to the health of the US economy. Well, it’s either that or their equivalent to the ol’fisherman’s trick to avoid jinxing their future catch.
Unfortunately for us and despite the Federal Reserve’s attempts, the outlook for the American economy - according to the most trusted source for complete and accurate information says: “better not tell you now.”
Update: The Source also came back with the results: “outlook not so good” and “signs point to yes.”
We’re doomed! o.O!
(4 votes, average: 7.75 out of 10)
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Well, actually the National Board of Economic Research is the Government body actually responsible for saying whether the economy is in recession or not, and they only know in hindsight. In fact, not always even in hindsight. They never quite decided about the 2000+2001 recession. And because it becomes a political football (as did the 2001 “banana”), it is better for the Federal Reserve to stick to their job, which is supposed to be control of the money supply.
Oh, oops, they lost control of that sometime in mid-Greenspan.
Senectus | Mar 26, 2008 | Reply
It’s actually pretty amazing how much perceived responsibility the Fed is given these days. If you turn on CNBC or just watch the markets, everyone seems to assume that the Fed is supposed to keep US stockmarkets high, keep companies afloat, boost investor confidence and fight crime in Gotham city. Not to mention avoid slipping on bananas.
Ocean | Mar 27, 2008 | Reply
@Senectus - Thank you for the correction. Though, wouldn’t you agree that despite the Federal Reserve’s restriction to officially identify a recession, their actions alone would speak quite profoundly towards the overall health of the economy? By lowering the interest rates aren’t they essentially signalling to the public that the economy is ill? So, for them to utter the words of recession (or act to correct it) would be more significant than what the NBER would have to say x amount of years down the line, wouldn’t it?
Jason | Mar 27, 2008 | Reply
The Fed has a long tradition of obfuscation and opacity. In fact it took an act of Congress (Humphrey-Hawkins) to get the Chairman to make a semi-annual report on monetary policy to the Capitol Hill Inmates. Bernanke is being applauded for speaking more often and clearly about the Fed’s current thinking. Time will tell if this is actually helpful to the economy, or if monetary policy - like love and sausage - is best made outside of the public view.
You are right, however, the kneejerk lowering of interest rates every time there is bad news for the stock market sends a clear message of distress, even panic. It would perhaps have done less damage to the working of the free market for the Fed to announce that all signs point to two consecutive quarters of negative growth for the U.S. GDP, i.e. a recession.
Senectus | Mar 28, 2008 | Reply