Recession, like the menopause,

is a retrospective diagnosis

You don't know you're in one until

you've been in it for at least two quarters

(referring to a recession) or a year (for the menopause)

So, has the US economy dried up?

Is it past its prime?

The Obama campaign’s initial response to

the latest wave of bad economic news was,

I’m sorry to say, disreputable:

Obama’s top economic adviser claimed that

the long-term tax-cut plan the candidate

announced months ago is just what we need

to keep the slump from “morphing into

a drastic decline in consumer spending.”

Hmm: claiming that the candidate is all-seeing,

and that a tax cut originally proposed

for other reasons is also a recession-fighting measure

— doesn’t that sound familiar?

Hillary Clinton on Friday proposed $70 billion in emergency spending to stave off a possible U.S. election-year recession, upstaging Republican rivals who clashed over the economy but offered few specifics.

The New York senator proposed $30 billion to help low-income families hit by the mortgage crisis and $40 billion in other spending, mainly for the poor and unemployed.

It also includes aid to families having trouble paying heating bills, which seems like a clever way to put cash in the hands of people likely to spend it.

You have to say that Mrs. Clinton seems comfortable with and knowledgeable about economic policy.

I’m sure the Hillary-haters will find some reason that’s a bad thing, but there’s something to be said for presidents who know what they’re talking about. More than can be said for Barack Obama.

Recesson Blues

Suddenly, the economic consensus seems to be that the implosion of the housing market will indeed push the U.S. economy into a recession, and that it’s quite possible that we’re already in one. As a result, over the next few weeks we’ll be hearing a lot about plans for economic stimulus.

Since this is an election year, the debate over how to stimulate the economy is inevitably tied up with politics. And here’s a modest suggestion for political reporters.

Instead of trying to divine the candidates’ characters by scrutinizing their tone of voice and facial expressions, why not pay attention to what they say about economic policy?

In fact, recent statements by the candidates and their surrogates about the economy are quite revealing.

Take, for example, John McCain’s admission that economics isn’t his thing. “The issue of economics is not something I’ve understood as well as I should,” he says. “I’ve got Greenspan’s book.”

His self-deprecating humor is attractive, as always. But shouldn’t we worry about a candidate who’s so out of touch that he regards Mr. Bubble, the man who refused to regulate subprime lending and assured us that there was at most some “froth” in the housing market, as a source of sage advice?

Meanwhile, Rudy Giuliani wants us to go for broke, literally: his answer to the economy’s short-run problems is a huge permanent tax cut, which he claims would pay for itself. It wouldn’t.

About Mike Huckabee — well, what can you say about a candidate who talks populist while proposing to raise taxes on the middle class and cut them for the rich?

And then there’s the curious case of Mitt Romney. I’m told that he actually does know a fair bit about economics, and he has some big-name Republican economists supporting his campaign.

Fears of recession might have offered him a chance to distinguish himself from the G.O.P. field, by offering an economic proposal that actually responded to the gathering economic storm.

I mean, even the Bush administration seems to be coming around to the view that lobbying for long-term tax cuts isn’t enough, that the economy needs some immediate help. “Time is of the essence,” declared Henry Paulson, the Treasury secretary, last week.

But Mr. Romney, who really needs to take chances at this point, apparently can’t break the habit of telling Republicans only what he thinks they want to hear.

He’s still offering nothing but standard-issue G.O.P. pablum about low taxes and a pro-business environment.

On the Democratic side, John Edwards, although never the front-runner, has been driving his party’s policy agenda.

He’s done it again on economic stimulus: last month, before the economic consensus turned as negative as it now has, he proposed a stimulus package including aid to unemployed workers, aid to cash-strapped state and local governments, public investment in alternative energy, and other measures.

Last week Hillary Clinton offered a broadly similar but somewhat larger proposal. (It also includes aid to families having trouble paying heating bills, which seems like a clever way to put cash in the hands of people likely to spend it.)

The Edwards and Clinton proposals both contain provisions for bigger stimulus if the economy worsens.

And you have to say that Mrs. Clinton seems comfortable with and knowledgeable about economic policy.

I’m sure the Hillary-haters will find some reason that’s a bad thing, but there’s something to be said for presidents who know what they’re talking about.

The Obama campaign’s initial response to the latest wave of bad economic news was, I’m sorry to say, disreputable: Obama’s top economic adviser claimed that the long-term tax-cut plan the candidate announced months ago is just what we need to keep the slump from “morphing into a drastic decline in consumer spending.”

Hmm: claiming that the candidate is all-seeing, and that a tax cut originally proposed for other reasons is also a recession-fighting measure — doesn’t that sound familiar?

Anyway, on Sunday Mr. Obama came out with a real stimulus plan. As was the case with his health care plan, which fell short of universal coverage, his stimulus proposal is similar to those of the other Democratic candidates, but tilted to the right.

For example, the Obama plan appears to contain none of the alternative energy initiatives that are in both the Edwards and Clinton proposals, and emphasizes across-the-board tax cuts over both aid to the hardest-hit families and help for state and local governments.

I know that Mr. Obama’s supporters hate to hear this, but he really is less progressive than his rivals on matters of domestic policy.

In short, the stimulus debate offers a pretty good portrait of the men and woman who would be president. And I haven’t said a word about their hairstyles.

Recession, Like the Menopause... [Seattle PI]

Recession, like menopause, is a retrospective diagnosis. You don't know you're in one until you've been in it for at least two quarters (referring to a recession) or a year (for menopause).

The question for me is not: Are we hitting a recession in 2008? It is: What has made the economy so buoyant that we didn't submerge into a recession several years ago?

Wall Street giant and billion-dollar bank Merrill Lynch announced last week that the United States had entered a recession for the first time in 16 years. It was a controversial call denied by a chorus of economists who do not think we're there yet.

But the announcement comes from the bank's chief American economist, David Rosenberg -- widely respected on Wall Street.

The largest factor driving this country's economy into recession has been the Bush administration's profligate spending. Please read the following quote from the conservative/libertarian think tank Cato Institute's Web site:

"George Bush is mired in a fiscal policy crisis worse than anyone could have envisioned when he entered the Oval Office ... This crisis is the resurgence of record federal deficits ...

"The deterioration of America's fiscal health cannot be blamed on ... pro-spending coalitions in the Democrat-controlled Congress -- although certainly some of the blame lies there. It is almost exclusively the creation of the Bush administration itself."

Sound familiar? The article, which I edited heavily (taking out references that would have dated it immediately, such as the use of the term "Reaganomics"), is about George H.W. Bush, not George W. But it might as well have been about the son.

Forget about the $127 billion surplus that President Clinton left the nation after he moved out of the White House or the fact that Clinton paid down hundreds of billions of dollars in federal debt.

President George W. Bush has produced nothing but deficits since he's been in office. Last year's, at $163 billion, was the lowest in five years. But it probably would not have been if his trillion-dollar war in Iraq hadn't been paid for "off budget."

That little budgetary trick by the administration means that cost isn't tallied in the deficit and debt figures.

Then, of course, there's Bush's multitrillion-dollar tax cut.

Here's a lesson Bush never learned and one that probably could have kept this country out of recession: You can't fight an expensive war AND cut taxes simultaneously without sending the U.S. economy into the tank.

That is just what Bush has done.

There are other contributing factors, of course. The housing bust has hurt this consumer-driven economy mightily. Americans felt richer and borrowed heavily against home equity at the height of the boom. These factors kept corporate profits and the economy growing.

But the bust that has now followed was highly predictable. Real estate always runs in cycles. The last real-estate boom lasted an incredibly long five years. The president should not have been piling up irresponsible debt, knowing the crash would come at some point.

Then there is oil. Prices have been high since Hurricane Katrina, more than two years ago.

When you consider that early in Bush's first term oil was selling for about $25 per barrel, and we're now paying about four times that much, it's incredible that fact alone didn't drive us into recession territory much sooner.

What has kept our economy growing these past few years? My theory is: immigration.

When millions of people flood into this country with few possessions, buy homes and fill them with consumer goods, of course our consumer economy is pumped.

But that artificial pump-up won't last forever. Unfortunately, the overdevelopment they prompt and the environmental degradation they create will.

What's the solution? It won't be resolved with this guy in the White House. Cut defense spending. Use a pay-go system for all future domestic spending programs and tax cuts. Get the deficit down and bring the surplus back. And while we're at it, pay down the national debt.