Talk:Great Recession/Archive 3

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Science News resource

Beware the Long Tail "Economic models of risk don’t add up, cadre of researchers caution" by Rachel Ehrenberg November 5th, 2011; Vol.180 #10 (p. 22) See H. Eugene Stanley, Benoit Mandelbrot, Long Tail & Heavy-tailed distribution, Zipf's law, Vilfredo Pareto, Normal distribution, Power law, Didier Sornette

Excerpt ...

A new analysis of transactions on the S&P 500 share index and the German DAX Future stock market also uncovered power laws at work. As prices start to rise or fall, larger and larger chunks of stock are sold with greater and greater frequency, Stanley, Tobias Preis of Boston University and Artemis Capital Asset Management, and Johannes Schneider of Johannes Gutenberg University Mainz in Germany reported in May in the Proceedings of the National Academy of Sciences. The trade volume and the time between successive trades both exhibit power law behavior.

Recent work by Farmer, Stefan Thurner of the Medical University of Vienna and Yale economist John Geanakoplos suggests that some investment strategies can actually create a power law long tail.

Many economists agree that current models grossly oversimplify things: “Almost no economists think that the Gaussian is a very good approximation of reality,” Gabaix says. But power law math is much messier than Gaussian math. Even figuring out where a power law distribution begins can be tough. Pareto’s classic case of income probably follows a power law only in its tail, for example, with the wealth of the majority of the population based on labor for pay. To keep things simple, models leave out a lot, Gabaix says. The key, and a very difficult thing, is making sure that the most important ingredients are included. “Power laws,” he says, “are one of those intriguing facts that force people to write new theories that hopefully will explain them.”

97.87.29.188 (talk) 23:29, 9 November 2011 (UTC)

Suggested New Name -- Recession of the 201st or 202nd decade AD (or CE),

This is my suggestion for renaming of this article (and similarly titled articles) to remove the ambiguity of whether it refers to the decade or the millennium. If you count the decades starting from 1 AD/CE, years 1-10 would be the first decade, 11-20 the second decade, and so on and so forth. In other words, you drop the zero from the last year of the decade. Therefore, the Late-2000s recession could be retitled Late 201st decade recession or maybe Recession of the 201st and 202nd decades. Good idea? Bad idea? Neutral? —SterlingNorth (talk) 14:42, 13 February 2012 (UTC)

No; readers wouldn't know what it meant. bobrayner (talk) 02:37, 15 February 2012 (UTC)

• I'd suggest using something other than "Late 2000s," since there are many problems interpreting this phrase (see here for examples and reasons why it's not the best name). I'm going to move the article to 2008–2012 global recession in order to bring the name into some kind of 'date structure' that's easy to interpret. An example of another alternate title would be "2008–2012 multinational recession," but I felt the term "multinational" is too closely associated with multinational corporations rather than the intended meaning of 'involving multiple nations.' Furthermore, the term "global financial crisis" and corresponding 2008–2012 global financial crisis article suggest 'global' may be an easily understood term in its consistency with these related ideas. --Xaliqen (talk) 05:24, 18 April 2012 (UTC)

• Scratch that, the page must be semi-protected, because regular wikipedians can't move it. I've gone ahead and posted a move request tag in order to start a discussion about a move. :) --Xaliqen (talk) 05:33, 18 April 2012 (UTC)

How about "Global recession of 2008" (or "beginning 2008")? The War of 1812 didn't end in 1812. —Tamfang (talk) 07:17, 18 April 2012 (UTC)

Requested move to 2008–2012 global recession

The following discussion is an archived discussion of a requested move. Please do not modify it. Subsequent comments should be made in a new section on the talk page. No further edits should be made to this section.

The result of the move request was: page moved, can be moved again if (a) it continues into 2013 or (b) we get a naming convention for ongoing current multi-year events. -- JHunterJ (talk) 13:41, 26 April 2012 (UTC)

---

Late-2000s recession → 2008–2012 global recession – The word-choice of 'late 2000s' is arguably confusing and imprecise. While setting a perfect date on the recession is difficult, I suggest 2008–2012 as a safe time-frame for the time being. Of course, the dates can be changed when or if appropriate, but the point is that a less confusing date or time-frame does seem appropriate for the title. If the community dislikes the term 'global,' I'd suggest 'multinational' as a potential alternative. See my comments in the discussion under the sub-heading "Suggested New Name" immediately above for additional reasoning related to the title and consequent move request. I think 2008–2012 global recession, 2008–2012 multinational recession and even simply 2008–2012 recession all work a bit better than the current title. I'll leave it up to the community to decide if any of these alternatives work better. --Xaliqen (talk) 06:08, 18 April 2012 (UTC)

• Support. Certainly more comprehensible and natural. Avoids confusion with some recession predicted to occur late this century! Noetica^Tea? 02:18, 19 April 2012 (UTC)

• Support. 2008–2012 global recession is the best in my opinion. Plokijnu (talk) 08:38, 19 April 2012 (UTC)

• Support It looks like this massive recession is going to go on for some time still, and calling it 2000s' recession is not justified. While the US economy seems to be on the recovery it might still take a decade until the PIIGS countries are able to reach pre-2008 levels. How about 2008–present global recession or even Early 21st century recession? --hydrox (talk) 16:51, 19 April 2012 (UTC)
• Oppose both the proposed title and the current. "2000s" strikes me as a millenium, not a decade, and "2008-2012" makes it sound like it's over or scheduled to end. May I suggest "Current global recession" till it's officialy over? InedibleHulk (talk) 06:24, 20 April 2012 (UTC)

• The proposed title would change if the recession continues into 2013 and beyond (to '2008-2013' etc). There is relatively broad precedent for changing the title as the years change for an ongoing event. --Xaliqen (talk) 15:03, 20 April 2012 (UTC)
• So essentially, you are supporting the motion to get the name changed, but disagree what the new name should be. --hydrox (talk) 09:29, 21 April 2012 (UTC)

• Oppose It's still too early to put a precise timeframe on it. -- P.T. Aufrette (talk) 07:26, 20 April 2012 (UTC)

So claiming it ended in 2009 is the way to go? --hydrox (talk) 09:29, 21 April 2012 (UTC)

The above discussion is preserved as an archive of a requested move. Please do not modify it. Subsequent comments should be made in a new section on this talk page. No further edits should be made to this section.

Name needs to be changed.

I am unhappy with this name change. The world economy grew by 5.3% in 2010 and 3.9% in 2011, and is projected at 3.5% in 2012 according to the IMF. This is 13.2% total growth. The vast majority of countries shared in this growth. There is little question that the vast majority of humanity is better off in 2012 than in 2009. In no sense has the 'world economy' been in 'recession' or 'crisis' throughout this entire period.

Before you try to rebut me with the apologia in the opening sentence of the article just note that the entire justification is focused on conditions within one country (the United States), while the world's largest economy, still less than one-fifth of the world economy, and less than 5% of the world population. High unemployment in the US does not prove a 'global' anything.

The problem is that media attention in the West has disproportionately focused on a few places of the world (southern Europe, the UK/US) that either are still in recession or are experiencing slow job growth. Rather than a singular event, this is really separate, discrete events that have very little if anything to do with each other. For example, the troubles of Greece are rooted in its adoption of the Euro; it was not caused by US subprime mortgages. The BRIC nations and Africa have grown steadily during this period and been little affected by Greece's woes, and so on. To try to create a single narrative based on the US housing market and asset some global recession lasting into 2012 is completely absurd, IMO. — Preceding unsigned comment added by 108.45.73.51 (talk) 03:05, 17 July 2012 (UTC)

No the problem is basic thinking ability combined with mass access to wiki editing. In fact the class system did rebound in absolute terms as you say starting in 2009.However the common mind associates overall social welfare and not national or international economic growth with forward progress or recession. Because those not profiting or suffering further reversal under the class system are oblivious to the macroeconomic values you refer to, they see the economic downturn as continuing, accelerating even whereas for you it was simply a severe correction which has been transited and now biz continues to advance albeit on a somewhat higher level by virtue of the imposition of greater austerity. The perspective of the overwhelming mass of humanity however, does establish the base and default perspective on things, and it's easy to show that this, in the developed countries anyway, is of an ongoing downturn which has not been relieved by a sustained general recovery as of 2012Q3. 72.228.189.184 (talk) 15:51, 17 July 2012 (UTC)

I'm surprised that the "class system" is still used seriously (rather than as a figure of speech) in economic analysis. Have you got any good sources which support this perspective? bobrayner (talk) 16:17, 17 July 2012 (UTC)

Are you 108.45.73.51 Bob? My reply was addressed to that user. I assume you are not asserting that a global classless condition has been arrived at so substitute whatever term you prefer. Lycurgus (talk) 18:49, 17 July 2012 (UTC)

Sorry for the confusion. If you only want to talk to 108.45.73.51 then User talk:108.45.73.51 might be a better place, instead of Talk:2008–2012 global recession where a whole bunch of different people discuss the 2008–2012 global recession. Still, if you have any credible sources which discuss the subject in terms of class, it would be helpful to improve this article; if not then we can leave class behind. bobrayner (talk) 19:41, 17 July 2012 (UTC)

Yes, that's my desire, to leave it behind. However it (the class system or whatever you prefer to call it) is not yet behind us and it is the correct explanation of the issue I responded to and which is what this thread is about. 72.228.189.184 (talk) 21:07, 17 July 2012 (UTC)

Do you have any good sources? bobrayner (talk) 21:24, 17 July 2012 (UTC)

Do you have anything else to say? I haven't made any suggestion for any content for the article that requires sources, I've merely responded to an editor's query. Break off with your conservative squelching reflexes as they're totally inappropriate and off point in this case. As for the matter of the class system and sources for that, I take it you have the wherewithal to access that very voluminous body of knowledge. Asking a person to give sources for a response to a question on a talk page is at the very least dull. 72.228.189.184 (talk) 21:35, 17 July 2012 (UTC)

That seems to be a very long way of saying that you don't actually have sources to support your comments. Ad hominems are not a substitute. So, I needn't respond further; you can have the last word if you want. bobrayner (talk) 21:52, 17 July 2012 (UTC)

Good. My last word is think about how ridiculous and petty you sound. 72.228.189.184 (talk) 22:13, 17 July 2012 (UTC)

A global period of economic stagnation with crises in certain sectors remains in progress. That there is some growth in some areas does not change the global picture. The most glaring problem is the European sovereign-debt crisis, however there are events occurring in China, particularly the piling up of unused coal, which show a much wider pattern. By the way, in this context, the technical definition of recession does not apply; we are talking about a Depression (economics), a sustained period of economic difficulty. See the testimony of Ben Bernanke today, http://www.c-spanvideo.org/event/205550 User:Fred Bauder Talk 00:25, 18 July 2012 (UTC)

Intro Needs NPOV re-working

It is political "hogwash" to suggest that "experts" believe the "recession" technically ended in 2009, while common people simply perceive something that is not true.

Instead, the intro needs to disambiguate between two definitions of recession:

1. The economist's "technical" definition consists of two or more quarters of negative economic growth.

2. However, the second definition need not be vague at all. Some define "recession" to mean what it means: to "recede" from a peak. By this definition, the U.S. is in recession now. Check out this map from a reliable source to chart both meanings:

http://money.cnn.com/2011/06/09/news/economy/household_wealth/index.htm

By definition 1, the "recession" ended when growth turned positive.

But by definition 2, unless/until the U.S. wealth reaches pre-recession levels, we are still below the 2007 peak and thus in recession.

This article needs to do a better job explaining this, rather than adding condescending remarks.

Ryoung122 19:03, 19 July 2012 (UTC)

Correct, recession has a technical definition of declining output, but both professional economics and laypeople know a long period of stagnation and crisis, whatever called. User:Fred Bauder Talk 23:46, 19 July 2012 (UTC)

European sovereign-debt crisis

The European sovereign-debt crisis is not integrated into this article. Not sure where it would go or what should be said, but it seems to be the visible focus of the global crisis at this time. User:Fred Bauder Talk 15:14, 16 June 2012 (UTC)

Seconded, I think that's probably an elephant in the room in terms of updating the material in this article. If I have time this week, I'll try to start the process (may or may not have time, so anyone who wants to take a crack at it should do so). It may be relatively straightforward to update/integrate, I haven't looked at it in-depth yet. --Xaliqen (talk) 09:29, 19 June 2012 (UTC)

It's tricky; easy to end up with original research. For example, hard money, euros, flowing into weak economies like Spain fueled a property bubble. Very similar to the sub-prime mortgage crisis but I'm not sure securitization played a role in Spain. There is a common theme of poor financial decisions being made due to ready availability of money which would not have been made otherwise. Now, these bills are all coming due. There is a similar problem in China with local governments and enterprises, particularly steel mills, making poor investments because they have power to access money and assets. It all ties together, but to do so sources are necessary.

Best to keep it simple and focus on the lack of confidence in sovereign debt which is reflected in interest rates required to issue long term bonds. The global aspect is that these bonds which are potentially subject to default are held worldwide. Although probably not so much in Asia. 7% is good interest, if one could depend on it being paid. User:Fred Bauder Talk 12:02, 19 June 2012 (UTC)

This "A Global Perfect Storm" by Nouriel Roubini June 15th, 2012 might be a useful source. User:Fred Bauder Talk 14:04, 19 June 2012 (UTC)

Thanks, I'll take a look. My knowledge-base is grounded in historical research rather than economics, so I'll be starting on a smaller scale if I take on this project. Someone other than me (with more knowledge of contemporary economic theory) should probably have oversight if we're going for a deeper integration of these materials. --Xaliqen (talk) 02:54, 20 June 2012 (UTC)

Just a quick note, I don't know if I'm going to have time to look at this in the near future. My commitments outside of Wikipedia recently increased. If I do have time, of course I'll start working on it, but no promises at the moment. --Xaliqen (talk) 00:03, 22 July 2012 (UTC)

Perma-intern the new work force or phenomena of this recession?

I have come across articles about the perma-intern a person who has been working unpaid at a position beyond the initial persons internship in a permanent internship where the person works unpaid and for no college credit. The concern I have is that I have came across articles that state a new trend in employment in the United States of a company will lay off its paid staff and restaff with full time working unpaid interns. Does anyone have more information on this topic or subject? What I find disturbing is that some of the articles I have found claim college graduates are working a alternative internship at no pay. How does one live without pay and with many having large student loans, will this have a even more negative impact? This is what I have so far, does anyone have more info on the perma-intern or permanent internship?

Bellefante, Gina. Offspring Who Cling to the Nest. New York Times. 23 Jun 2012. http://www.nytimes.com/2012/06/24/nyregion/offspring-who-cling-to-the-nest.html

Carlozo, Lou. Perma-interns: Is working for free a good career bet? Reuters Money. 28 Jun. 2011. http://blogs.reuters.com/reuters-money/2011/06/28/perma-interns-is-working-for-free-a-good-career-bet/

Conlin, Michelle. Intern Abuse? Bloomberg Businessweek. 9 May. 2008 http://www.businessweek.com/careers/managementiq/archives/2009/05/intern_abuse.html

Greenhouse, Steven. The Unpaid Intern, Legal or Not. New York Times. 2 Apr. 2010 http://www.nytimes.com/2010/04/03/business/03intern.html?adxnnl=1&pagewanted=all&adxnnlx=1343804400-Beql60+Eq+AhPVlnHzP7KQ

Greenhouse, Steven. Jobs Few, Grads Flock to Unpaid Internships. New York Times. 5 May 2012. http://www.nytimes.com/2012/05/06/business/unpaid-internships-dont-always-deliver.html?_r=1

Sands, David R. Is use of interns abuse of labor? The Washington Times. 7 Apr. 2010 http://www.washingtontimes.com/news/2010/apr/07/is-use-of-interns-abuse-of-labor/?page=all

Stott, Phil. How Abuse of Interns Undercuts Company Success. CNBC. 5 Apr. 2010 http://www.cnbc.com/id/36177349/How_Abuse_of_Interns_Undercuts_Company_Success

http://www.urbandictionary.com/define.php?term=permatern Shiningmind818 (talk) 08:28, 1 August 2012 (UTC)

As opportunities for profit decrease capitalists seek cheap or free labor wherever they may find it, even from their own children. That said, I don't think the subject has anything to do with this article. Addition of permanent to intern seems to be original research or, at best, a neologism. User:Fred Bauder Talk 13:11, 1 August 2012 (UTC)

Well it's relevant as a tactic which has been forced by the subject but probably should only go in in a passing ref with support at most, where other such effects are talked about. 72.228.189.184 (talk) 17:21, 1 August 2012 (UTC)

Economic indicators used for comparison to historic recessions should possibly be re-evaluated.

In the "Comparisons with the Great Depression" section, official early 21st century U.S. economic indicators are compared to 1980's indicators, despite that fact that the U.S. government has changed the way they compute these numbers. In effect, this section is comparing apples to oranges, not apples to apples, so to speak. According to Shadowstats, the overall effect of these changes in computing is an optimistic bias in the modern indicators. For instance, if we use the same method to compute CPI as was used in during the 1980's recession, then inflation is currently around 10%, and there was no actual deflation in 2009. A re-evaluation of GDP along these lines seems to indicated that the U.S. has actually been in recession for most of the last decade. Essentially, by comparing apples to apples, we would see that the effects of the Great Recession, at least for the U.S., are much worse than indicated by the "official" numbers. Perhaps I am missing something, but Shadowstats seems to have some valid reasoning here. — Preceding unsigned comment added by Rangerrilean (talk • contribs) 18:45, 7 August 2012 (UTC)

The above comments were concerning U.S. economic indicators only and refer to the Shadowstats.com web site. Here is a link to a chart comparing GDP growth computed by alternate vs. official methods: U.S. GDP Growth. Here is a link to a chart comparing CPI by alternate vs. official computation methods: U.S. Inflation.The alternate (traditional) indicators do not reflect the optimistic bias injected into the official (updated) stat computations by American politicians in the 1980's/90's. The first chart data does meet the official definition of "recession" over most of the last decade. Here is a link that explains the reasoning behind the alternate computation methodology and raises legitimate concerns over the official computation methodology: Justification for Alternate Stats. Is there faulty reasoning here that I do not perceive?--Rangerrilean (talk) 18:15, 10 August 2012 (UTC)

Is that site a reliable source? To what extent are inflation and GDP stats really distorted by politicians? This isn't China or Argentina we're talking about. bobrayner (talk) 18:25, 10 August 2012 (UTC)

Here is a link that explains it thoroughly: Justification for Alternate Stats. However, in summary, here is what happened. In the late 80's and early 90's, there was increasing pressure for the U.S. federal government to balance the budget and to prevent an anticipated entitlements shortfall (Social Security, Medicare, etc.). Also, there were some economists that believed in changing the way CPI (Consumer Price Index, chief inflation indicator) was calculated. These economists believed that instead of measuring the price of the same fixed basket of goods from year to year (the traditional method used up until the 1980's), the price of a basket of cheaper "equivalents" should be measured, thus reflecting consumer choice in the marketplace (hamburger instead of steak, for instance). Also, they wanted to include other "estimated" factors in to adjust for things like added value from innovative product upgrades (a cell phone with a camera, for instance). Coincidentally, or maybe not, these newer calculation methods resulted in lower inflation numbers than the traditional method. This allowed Congress to budget lower cost of living increases for Social Security recipients, etc. in line with the new inflation numbers.

With backing from some economists to create the illusion of legitimacy, Congress pushed these changes through, largely unnoticed by the vast majority of citizens. They were able to balance the budget and push the entitlement funding crisis off further into the future, all by manipulating numbers and without making any tough (unpopular) decisions. They ignored some obvious issues, however. For instance, the "equivalent" products they use tend to be of lesser quality (hamburger is not steak). Also, the "product upgrades" may be of little or no value to some consumers but they are still charged for them. (I do not want or need a phone with a crappy built-in camera, but try finding a cell phone without this feature.) So the upshot is, instead of calculating inflation based on maintaining a constant standard of living (same basket of goods, of the same quality, each year), it is now based on a continuously lower standard of living (shrinking basket of goods, or at least of shrinking quality, each year). Another effect of the new inflation numbers was to raise the GDP, which is adjusted for inflation. I think you can see the benefit of a higher GDP (growing economy) to an incumbant politician running for re-election.--Rangerrilean (talk) 01:02, 12 August 2012 (UTC)

The change of goods basket in general is unavoidable to reflect change in society. Meaning using an identical basket over 100 or more years is problematic as well, since dietary habits and technology change. There can be food item being essential back then, but fallen somewhat out of favour now. There can be essential items that are important now but didn't exist back then. Consequentially changing the basket over time is a "common" thing which is done by institutes all over the world. So yes, changing the basket makes it harder to compare numbers directly (you still can compare their relative changes though), but not adjusting the basket is problematic as well and leads over time to meaningless numbers over time. Having that said, the necessary change of the basket can of course be abused for political reasons to smuggle additional stuff just to make numbers looking good.--Kmhkmh (talk) 05:27, 12 August 2012 (UTC)

global recession over 5 years?

Is there source claiming that global growth was negative for 5 years in a row? Is any source actually speaking of a global 5 year recession? If not i fail to see how the article's name can be justified.--Kmhkmh (talk) 11:49, 9 August 2012 (UTC)

There is a book, End This Depression Now! by Paul Krugman (Apr 30, 2012) User:Fred Bauder Talk 16:56, 9 August 2012 (UTC)

So we have a book - by Krugman, admittedly - which talks about this being a depression rather than a recession. But the book seems to be mostly USA-focussed. Or are we assuming that Krugman must mean a global recession and/or depression since a country isn't named in the book's title? That would be shaky ground indeed. The actual definition of a recession is much safer ground, I feel. bobrayner (talk) 17:12, 9 August 2012 (UTC)

I haven't seen Krugmann's book yet, as as long as he does not speak of a global recession/depression now it doesn't really provide a justification for the article's name. There certainly is recession/depression in some parts of Europe and difficult/dangerous state in the US and maybe globally as well which might lead to another recession/depression in the near future, but that just educating guesswork which is no basis for picking the article's name. As you can see in the graph you've posted further down, only for 2008 one can speak global recession/depression. So I still think the article's name needs to be changed.--Kmhkmh (talk) 19:19, 10 August 2012 (UTC)

Recession is not being used in its technical sense of consecutive quarters of negative growth in the title of this article. Recession is being used in the sense of depression, a sustained period of high unemployment and economic stagnation punctuated by repeated crises. User:Fred Bauder Talk 14:05, 9 August 2012 (UTC)

Well depression is technically a long and deep recession, which consequently we don't have either. Nor do i see a globally high unemployment. I'd probably agree that one can speak of a continuing global crisis, that however needs to be the name of the article then. We can simply make up stuff. The title clearly suggest a 5 year global recession which simply doesn't exist (nor does a 5 year global depression). And even if we were to consider a non technical/non standard use of the term, we would need sources. Do we have a source speaking of a global depression for the years 2008-2012?--Kmhkmh (talk) 14:23, 9 August 2012 (UTC)

The recession in the United States was over by 1933, or so, after that, until 1937, there was growth, but high unemployment continued as did the dismal business climate. Depression is not technically defined. User:Fred Bauder Talk 16:50, 9 August 2012 (UTC)

I'm with Kmhkmh on this one. There is a definition of recession; if there wasn't actually a continuous decline in global GDP over a period then I doubt we should call that period a global recession. If one region had declining GDP, let's say that region had a recession; and so on. No doubt we could find some less-economically-literate sources which misuse "recession", but an encyclopædia really ought to strive towards accuracy. I would apply similar reasoning to "depression" too. bobrayner (talk) 15:08, 9 August 2012 (UTC)

• Here's an interesting graph: [1]. That graph does not show a recession from 2008-2012. But our current article title pretends that there is one. bobrayner (talk) 17:13, 9 August 2012 (UTC)

• This thread is disorganized. Contention on the subject title is unlikely to be resolved, it's beyond our current capabilities, I think. What the subject is is the Aftermath of the 2008 Financial Crisis. An affix such as Global or a regional/national one would narrow it. Maybe it's a Stagcession. 72.228.189.184 (talk) 10:41, 24 August 2012 (UTC)

As a part of a general crisis

This edit is not wrong. It relates to a possible capitalist crisis but does not fit into the main stream treatment we are striving for here. User:Fred Bauder Talk 22:49, 7 October 2012 (UTC)