Lehman failed in September 2008, and that started the panic that got the world's attention.
So a year later, in September 2009, after living through a year of "disaster," how did real consumption expenditure (one economists' favorite measures of living standards) compare to what it was in September 2008?
What about real disposable personal incomes: the amount of income households have on hand to spend?
Both of these are HIGHER in September 2009 than they were a year earlier.
Of course, we cannot say the same thing about employment, but nobody seems to acknowledge that this recession is much more about the labor market than about drops in real incomes or spending. [prediction: leftie bloggers will ignore this sentence (and 100 other posts I've had on the labor market), and have you believe that I claim that employment also has no perceptible decline]
[The BEA may revise the September 2009 income and spending numbers, up or down, so it is possible that the revisions show real income and or spending to be slightly lower 9-09 than 9-08. Undoubtably one could find other tweaks to the series to change a slight increase into a slight decline, or vice versa. But the fact that the BEA's measurement updates and other tweaks are first order considerations when characterizing the changes is proof itself that no spending or income collapse occurred since Lehman failed. A collapse should be obvious even when viewed with blurry glasses!]
So a year later, in September 2009, after living through a year of "disaster," how did real consumption expenditure (one economists' favorite measures of living standards) compare to what it was in September 2008?
What about real disposable personal incomes: the amount of income households have on hand to spend?
Both of these are HIGHER in September 2009 than they were a year earlier.
Of course, we cannot say the same thing about employment, but nobody seems to acknowledge that this recession is much more about the labor market than about drops in real incomes or spending. [prediction: leftie bloggers will ignore this sentence (and 100 other posts I've had on the labor market), and have you believe that I claim that employment also has no perceptible decline]
[The BEA may revise the September 2009 income and spending numbers, up or down, so it is possible that the revisions show real income and or spending to be slightly lower 9-09 than 9-08. Undoubtably one could find other tweaks to the series to change a slight increase into a slight decline, or vice versa. But the fact that the BEA's measurement updates and other tweaks are first order considerations when characterizing the changes is proof itself that no spending or income collapse occurred since Lehman failed. A collapse should be obvious even when viewed with blurry glasses!]
Hi Casey!! This is one of your old students that you doubtless have forgotten. I wondered if you would respond to the response to this post that's shown up on Econbrowser? It's here: http://www.econbrowser.com/archives/2009/11/wheres_the_cons.html pointing out that you're not adjusting for population.
ReplyDeleteMy regards always!