Press Lionizes Buffett, Ignores Near Reappearance of Recession Under His Definition
The press loves billionaire Warren Buffett, who can be relied to support President Barack Obama even in implausible circumstances — such as the current economy, where the "recovery" following the 2008-2009 traditionally defined recession has been worse than any since World War II, and barely better than what was seen during the awful post-Depression 1930s.
Thus far, the press has managed to ignore one of the implications of the first quarter's serious contraction. One more quarter of economic contraction could mean that the end of the recession, as Buffett himself has defined it, failed to permanently arrive.
In September 2010, a year after the recession's official end, Buffett told CNBC what his benchmark for the end of the recession would be:
I think we're in a recession until real per capita GDP gets back up to where it was before. That is not the way the National Bureau of Economic Research measures it. But I will tell you that to any, on any common sense definition, the average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession. And, and we're not gonna be out of it for awhile, but we will get out of it.
Thanks to the historically weak recovery, the economy did not get out of recession under Buffett's "common sense" definition until the second quarter of last year. Growth during last year's third and fourth quarters created a bit of daylight, but the first quarter's contraction caused almost two-thirds of what had been gained to be lost:
Per capita GDP in the first quarter was only 0.5 percent above the pre-recession peak seen in the fourth quarter of 2007.
My calculations incidate that an annualized contraction of 1.6 percent or greater in the second quarter would take the nation back into the Warren Buffett-defined recession. That doesn't seem likely — but then again, the first quarter's 2.9 percent annualized contraction didn't seem likely in early January.
Perhaps Buffett's fixation on per capita GDP partially explains his obsession with funding abortions. If there are fewer people, per capita GDP will be higher.
Of course, that doesn't answer the question of who would produce all of the goods and services that make up GDP. But leftists, even those who are good at thinking things through in their own business and investments, aren't particularly good at global thinking — at least morally-based global thinking.
Cross-posted at BizzyBlog.com.