The three levels of recession declarations (with reference to Punxsutawney Phil)

 So.  Are we, or are we not in a recession?  Let me check my Magic 8-Ball, or perhaps ask a rodent.  I shall work my way around to that.  What is a recession?  Consider three levels of recession declarations, which is a trick I am borrowing from certain click-bait music channels on youtube, in which guitarists do x levels of [insert style here].  I chuckle and cringe.

Level 1:  The layperson's definition.  A recession is a bad economy.  There are several problems with a Level 1 recession declaration.  First, it is easy for people to "feel" like the economy is bad.  General cynicism will always work against economic assessments.  Partisanship is a more important factor, though.  If the president is of Party A, then voters of Party B will say "recession" because a president of Party A gave the economy the stink-eye.  Yet the problems do not even end there.  What is a bad economy?  The economy is not only a multifaceted thing, the facets often conflict with each other.  The most conspicuous example is the Phillips Curve, which is the famous, inverse relationship between inflation and unemployment.  As inflation goes up, unemployment goes down, and vice versa.  This may seem like an important observation right now!  Either extreme on the Phillips Curve may be characterized as a "bad economy," but do we characterize both as "recessions?"  Not traditionally, and we're getting to that.  Yet by the Level 1 recession declaration, anything "bad" is a recession.  The problems here are so many, though, that perhaps a Level 1 recession declaration is just meaningless.  Like everything else to come from laypeople.  Fuck the laity.

Level 2:  The dilettante definition.  A recession means two consecutive quarters of negative GDP growth.  Honestly, if you are reading a political science professor's blathering, this is probably the definition you use.  (It is the definition I usually use, and I'll get to that.)  The definition has a lot going for it.  Negative GDP growth is a bad thing, but it is not the only bad thing.  Consider your health.  A broken rib is not COVID.  Do not mistake one for the other.  "Recession."  Just give me a working definition which is coherent, reasonable, and usable.  Two consecutive quarters of negative GDP growth?  I can work with that.  Could someone construct another coherent definition?  Sure.  I just want a definition.  But...

Level 3:  The "technical" definition.  The National Bureau of Economic Research gathers together to assess a bunch of stuff, and they release the "official" statement on whether or not a recession has occurred.

Um... At least when Punxsutawney Phil tells us whether or not he sees a shadow, it is a prospective assessment rather than a retrospective assessment.  Could the weather differ?  Well, Groundhog Day is in February.  Light casts shadows.  It's a joke.  Clue in.  But hey, global warming is happening, so whatever.

Past assessments?  What, precisely, is the utility of the NBER gathering in private to tell me, based on some unspecified mix of criteria, whether or not a recession has occurred, compared to the Level 2 declaration criteria?

This brings us to the Phillips Curve.  The unemployment rate remains low, even though GDP contracted for two consecutive quarters, which is why you are hearing people do the "are we in a recession?" thing.  It would be weird to declare a recession with such a low unemployment rate because that is not how we generally conceive of recessions.  But that's Level 1 shit!

And this is why I say: fuck the NBER.  This is why the Level 2 declaration process is superior.  Clear definitions, as opposed to this backwards-looking Punxsutawney Phil shit.

Is this/was this a recession?  Using clear criteria, yes.  It's just that "recession" and "unemployment" are not the same things.  "Recession" and "bad economy" are not synonymous.  The economy is a multifaceted thing, and the facets can conflict.  This is why we need not just technical definitions, but clear criteria for when we apply them.  Ironically, the Level 2 declaration process- the dilettante definition-- meets that standard, but the Level 3 process does not.

Define your terms.

And since it's Friday, here's some jazz.  Is Charlie Hunter the greatest guitarist ever?  Arguably.  Here's a live performance of "Recess."  He also recorded this one with Leon Parker on Duo, which is one of my desert island jazz albums, which is a concept that makes no sense, but that's an amazing album.