CBS ‘Early Show’ Declares Recession

On Monday’s CBS "Early Show," co-host Harry Smith talked to economic analyst Mark Zandi about the state of the economy and asked: "Oil's up, gasoline's up, food prices up, stocks, way, way, way, way down. Home owner -- home values are down. Is there an end in sight to all of this bad news?" Zandi replied: "You just made me depressed. No. It's just bad news. It really is...It's just a really tough time for many Americans."

Later, Smith commented on how all the bad economic news seems to contribute to bad economic events: "It just seems like we're in this cumulative cycle that, you know, once one threshold of bad news gets reached, we reach to yet another one." That comment sparked this exchange with Zandi:

ZANDI: Yeah, it's a self re-enforcing negative cycle. You know, that's what happens during recessions, and that's what we're in the middle of right now.

SMITH: Whoa, is this a recession?

ZANDI: You know that -- that's a debate among economists and policy makers. But in the minds of the average American household I think there's no debate, this is a recession. I mean they're worth less today than they were a year ago, they're purchasing power is lower. I mean, for most people that's the definition of recession. So, economists can debate it but I think most people think this is a recession.

Last week, "Early Show" co-host Julie Chen declared a: "perfect storm of economic woes." Meanwhile, ABC’s Good Morning America used the term "recession" eight times in three days last week.

Here is the full transcript of Monday’s "Early Show":

7:10AM SEGMENT:

HARRY SMITH: Oil prices reached a new high this morning. Crude surged above $143 for the first time. It's triggering worries about a weaker dollar. What does it mean for consumers headed to stores this holiday weekend and a whole list of other stuff? Joining us now is Mark Zandi of moody'seconomy.com. Good morning sir.

MARK ZANDI: Good morning.

SMITH: Oil's up, gasoline's up, food prices up, stocks, way, way, way, way down. Home owner -- home values are down. Is there an end in sight to all of this bad news?

ZANDI: You just made me depressed. No. It's just bad news. It really is. I mean, stock prices, as you pointed out, are 20% down from where they were last October. House prices are down 15% from where they were two years ago. Unemployment is up a percent, we're losing jobs. It's just a really tough time for many Americans.

SMITH: What do we do -- especially looking at what the stock market did in the last couple of weeks. People with 401Ks, with retirement accounts, I.R.A.S. They're sitting there looking at this saying, 'geese, what -- you know, should we be moving? Should we be getting out?' Is there a worse bottom than the one we're in right now?

ZANDI: Well, you know, I think the most important thing is don't panic. I mean, this would be the worst time to make a big change in what you're doing. I mean, if history's any guide, the economy will come back, the stock market will come back, and it will. And you don't want to be out of the market when that happens. Because when it does, it happens very, very quickly and you'll probably miss it if you sell now.

SMITH: The other question that comes to mind is that Congress has been working on this bailout for the subprime mess. Originally designed to cover about 3 million people. I read a piece in the paper over the weekend that says, 'oh, by the way, in the next couple months it's going to reach to six.' It just seems like we're in this cumulative cycle that, you know, once one threshold of bad news gets reached, we reach to yet another one.

ZANDI: Yeah, it's a self re-enforcing negative cycle. You know, that's what happens during recessions, and that's what we're in the middle of right now.

SMITH: Whoa, is this a recession?

ZANDI: You know that -- that's a debate among economists and policy makers. But in the minds of the average American household I think there's no debate, this is a recession. I mean they're worth less today than they were a year ago, they're purchasing power is lower. I mean, for most people that's the definition of recession. So, economists can debate it but I think most people think this is a recession.

SMITH: What else do you need to know? Alright, Mark Zandi, thanks very much, do appreciate it sir.

ZANDI: Thank you.