UK Double Dip Recession Really a Triple Dipper
UK Back in Recession (Duh Edition)
On Thursday the econ rags were abuzz with word that the UK had officially slipped into a Double Dip Recession, its first, officially, since 1975.
Word of Britain's recession also came on top of other news that explained even China may have succumbed to the gravitational pull of the unvirtuous phase of business cycle.
What is really quite remarkable about all of this is the way recessions are formally reported on, and more to the point, how the governments control the narrative, in much of the rest of the world.
To explain.
Recessions are not, not, two back-to-back quarters of declining GDP. Not, really, anyway. And yet, the la(z)ypress has so latched on to this weak journalism that governments in much of the world routinely get away with glossing right over economic downturns.
So in today's example, where the UK was finally declared by the news media to have fallen into a "double dip" recession because quarterly GDP growth was negative both in the final quarter of 2011 and the first quarter of this year, nothing gets said about the fact that, in reality, GDP has actually been negative in four of the past six quarters there. And not only that, sales and employment and housing and a host of other indicators have just been abysmal ever since the brief rebound at the end of the Great Recession.
UK Quarterly GDP 1990-2012
Image credit: BBC News
Looking at the above image, it really should be clear to anyone with at least a grade school education that the UK suffered a very deep downturn, followed by a strong but brief rebound, followed then by two far less deep downturns.
On the face of it, one might conclude that things are not all that bad in the Kingdom, as these two latest slumps pale in comparison to the Great Recession, or even to the less severe downturn of the early 1990s. But to look that far would be wrong.
To get a real idea of how nasty a slump this, whatever you want to call it, has been, since 2008, one must really compare the Great Downturn of 2008-? to past eras of prolonged economic pain. There one can start to get a true appreciation for just how bad it has been.
Comparing Severe UK Downturns in Modern Era
Image credit: JohnAshcroft.co.uk
It's like 2008-? followed the path of the 1930s and just never managed to get more than a third of the way back up, and in fact, has flatlined, at best, over the past two years.
Related Article
Mail OnlineIt's even worse than we thought!
Britain's first double-dip recession since 1975 is deeper than estimated, official figures show.
Gross domestic product (GDP) shrank by 0.3% between January and March down from a first estimate of 0.2%
The Treasury hoped it would be revised upwards but it got worse instead
Experts say bad news brings Coalition austerity policies further into question
Yesterday clothing retailers had worst sales since 2008 during April with the weather blamed for the slump
Coalition is a 'no-growth Government with its head in the sand', Labour say
On Thursday the econ rags were abuzz with word that the UK had officially slipped into a Double Dip Recession, its first, officially, since 1975.
Word of Britain's recession also came on top of other news that explained even China may have succumbed to the gravitational pull of the unvirtuous phase of business cycle.
What is really quite remarkable about all of this is the way recessions are formally reported on, and more to the point, how the governments control the narrative, in much of the rest of the world.
To explain.
Recessions are not, not, two back-to-back quarters of declining GDP. Not, really, anyway. And yet, the la(z)ypress has so latched on to this weak journalism that governments in much of the world routinely get away with glossing right over economic downturns.
So in today's example, where the UK was finally declared by the news media to have fallen into a "double dip" recession because quarterly GDP growth was negative both in the final quarter of 2011 and the first quarter of this year, nothing gets said about the fact that, in reality, GDP has actually been negative in four of the past six quarters there. And not only that, sales and employment and housing and a host of other indicators have just been abysmal ever since the brief rebound at the end of the Great Recession.
UK Quarterly GDP 1990-2012
Image credit: BBC News
Looking at the above image, it really should be clear to anyone with at least a grade school education that the UK suffered a very deep downturn, followed by a strong but brief rebound, followed then by two far less deep downturns.
On the face of it, one might conclude that things are not all that bad in the Kingdom, as these two latest slumps pale in comparison to the Great Recession, or even to the less severe downturn of the early 1990s. But to look that far would be wrong.
To get a real idea of how nasty a slump this, whatever you want to call it, has been, since 2008, one must really compare the Great Downturn of 2008-? to past eras of prolonged economic pain. There one can start to get a true appreciation for just how bad it has been.
Comparing Severe UK Downturns in Modern Era
Image credit: JohnAshcroft.co.uk
It's like 2008-? followed the path of the 1930s and just never managed to get more than a third of the way back up, and in fact, has flatlined, at best, over the past two years.
Related Article
Mail OnlineIt's even worse than we thought!
Britain's first double-dip recession since 1975 is deeper than estimated, official figures show.
Gross domestic product (GDP) shrank by 0.3% between January and March down from a first estimate of 0.2%
The Treasury hoped it would be revised upwards but it got worse instead
Experts say bad news brings Coalition austerity policies further into question
Yesterday clothing retailers had worst sales since 2008 during April with the weather blamed for the slump
Coalition is a 'no-growth Government with its head in the sand', Labour say