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Northwest Voices

Seattle Times letters to the editor

February 7, 2009 at 10:59 AM

Economic recession

Staying in positive territory

I must have been looking at a graph different from the one Kevin G. Hall cites in his story [“U.S. recession is worsening,” Times, Business, Jan. 31].

I’m as worried as the next guy about feeding my family, but not enough to hear Hall and others say we are “in the worst recession since the Great Depression.”

It’s not so. At least not yet.

According to the U.S. Bureau of Economic Analysis graph of quarterly gross domestic product (GDP) accompanying Hall’s story, our economic output has been in positive territory since the first quarter of 2002. It fell just below zero for the first time in the third quarter of 2008 and was followed by a -3.8 percent decline in the fourth quarter of 2008.

According to most economists, a recession is defined as negative growth in our GDP for two consecutive quarters. Thus, in the worst case scenario, we have been in a mild recession since October of 2008, not since “late 2007” as Hall asserts.

In fact, in the last two quarters of 2007 our GDP grew each quarter at a rate of 5 percent. The last time we had two consecutive quarters of 5 percent GDP growth was in 1984.

Again from the same graph, one observes that the U.S. economy has enjoyed greater stability since the mid-80s than in the three decades before the mid-1980s.

To be certain, there are problems with the way our economy is regulated. Banks and financial-service institutions have been allowed to play outside the rules for too long. Regulatory bodies have not been doing their jobs, neither have legislators.

To fix the problems in our economic model we must rely on accurate data. A public disservice is done by sensationalizing our condition as Hall does.

— Peter Philips, Seattle

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