Cultural Revolutions

Are We Rolling Downhill. . .

Republican partisans’ joy at an estimated 0.6-percent increase in U.S. Gross Domestic Product in the first quarter of 2008 has been diminished by the continued contraction of two key economic indicators used to determine whether a recession has started.  These are non-farm payroll employment (compiled by the Bureau of Labor Statistics), which peaked in December 2007; and industrial production (tracked by the Federal Reserve), which has declined since January 2008.  Payroll employment is the broadest economic indicator, and industrial production measures the physical output of the nation’s factories, mines, and utilities.  Martin Feldstein, chairman of President Reagan’s Council of Economic Advisors, referred to both indicators in a Financial Times column (May 7) arguing that a recession started around the first of the year.  Feldstein’s opinion matters more than those of others practicing the dismal science because he is a member of the National Bureau of Economic Research’s Business Cycle Dating Committee—a seven-person academic panel that analyzes turning points in the economy.  The NBER, founded in 1920, is a Cambridge-based nonprofit, nonpartisan research group.  The committee is considered a neutral arbiter, or umpire, within the profession, and any ruling it makes will be widely cited by the media.

Feldstein characterizes the GDP report touted by Republicans...

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