Oops! Revise Political Talk & Media Blitz: EU Still in Recession?

posted by Ida B. Wells IV @ 10:25 AM
June 19, 2014

Shrinking-GDP-map    Proving economics––like other sciences––is not always exact, the Center for Economic Policy Research (CEPR), a group of 800 top economists, researching the European Union as a whole, says the EU is still in recession. Maybe!

In fact, several economic reporters insist politicians planted “false” media stories––i.e. “whatever it takes” to solve EU’s fiscal problems”––to give impressions that hard times in Europe were over.

This media blitz took the world’s attention away from dire conditions in Greece; collapsing banks in Spain; high food costs in Hungary, Poland, etc.; very high youth unemployment in all EU nations, etc.

Yet, as Wolf Richter writes this week in ‘It’s Official: Despite Media Hype, Eurozone Still In Recession,’ “[CEPR] just released a report . . . that supports what corporate earnings have been clamoring about for a while: the eurozone recession that started in the fourth quarter of 2011 still isn’t over.”

Even more conservative columnist, Neil Irwin, writes in ‘Europe May Be in a Recession (Still),’ “Is the European economy expanding, or is it in recession? Turns out, even the people whose job it is to decide aren’t sure.

“And their reasoning shows why the economic situation seems so perilous in Europe, even though its economy isn’t clearly shrinking.” He says CEPR fears that “policy makers may not be sufficiently concerned about the state of the economy.”

Richter explains CEPR’s thinking mirrors other facts: “ . . . in 2012, the entire debt-crisis fiasco was solved with a few elegant words – ECB President Mario Draghi’s “whatever it takes”––backed by the ECB’s printing press. Markets loved it. Even beaten-down, haircut––decorated Greek debt soared.”

The report argues that EU’s first recession ended in the first quarter of 2009, and economic activity in the group of nations soared through the fall of 2011 with 4% growth, but that was still below growth before 2009.

Last fall the CEPR hinted:  “ . . . while it is possible that the recession ended, neither the length nor the strength of the recovery is sufficient, as of 9 October 2013, to declare that the euro area has come out of recession.”

Finally this week it states emphatically (sort of) “ . . . the euro area may be experiencing since early 2013 a Europe Double Dip Exit_0prolonged pause in the recession that started after 2011Q3.” Thus, despite all the media hype, Europe is in a three year recession.

As Richter says, “This was unwelcome news to Eurocrats and the crisis solvers of the eurozone. But it was not news to the unemployed in France, Spain, Greece, Portugal, and many other countries.”

Speaking of which, isn’t this the same ‘political-economy-is-ok’ game going on in the United States where unemployment numbers do not consider long-term unemployed falling off the system, where roads and bridges sag in non-repair, where mountains of rotting houses and boarded factories blare in most cities, etc.?

Prolonged recessions lead to economic depressions and these always lead to war! As wholesale Christian Bibles declare, politicians must tell their people the truth whether those people want to hear it or not: “For the leaders of this people cause them to err; and they that are led of them are destroyed Isaiah 9: 16).”

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