Recession: Get Over It Or Not

Ben Bernanke looked down over the land and said it was good. The he looked at the people and said they were good. Then he looked at the economy and said it was good. And so it was. Eh?

Bernanke Sees Recovery, Defends Fed Actions

WASHINGTON -- U.S. Federal Reserve Chairman Ben Bernanke Tuesday said it's likely the recession has come to an end, but he reiterated that tight credit conditions and a soft labor market will prove to be a challenge.

• Econ: Bernanke's Clearest Declaration Yet

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Fed Chairman Ben Bernanke answers a question at a Brookings Institution forum.

From a technical point, the "recession is very likely over at this point," Mr. Bernanke said in a question-and-answer session at the Brookings Institution.

But he added that even if recovery is underway, it's still going to feel like a very weak economy because credit conditions remain tight and any decline in the unemployment rate will probably only happen gradually. He noted that one risk is that the economy will grow in the second half of 2009, but not enough to trigger a rapid recovery.

If there is only moderate economic growth, "employment will be slow to come down," he said. "It will come down, but it will take some time."

He mean to say "unemployment," but we all understand banker talk. Still not all agree with Big Ben:

Economist warns of double-dip recession

By Robert Cookson and Sundeep Tucker in Hong Kong

Published: September 14 2009 15:01 | Last updated: September 14 2009 15:01

The world has not tackled the problems at the heart of the economic downturn and is likely to slip back into recession, according to one of the few mainstream economists who predicted the financial crisis.

Speaking at the Sibos conference in Hong Kong on Monday, William White, the highly-respected former chief economist at the Bank for International Settlements, also warned that government actions to help the economy in the short run may be sowing the seeds for future crises.

“Are we going into a W[-shaped recession]? Almost certainly. Are we going into an L? I would not be in the slightest bit surprised,” he said, referring to the risks of a so-called double-dip recession or a protracted stagnation like Japan suffered in the 1990s.

“The only thing that would really surprise me is a rapid and sustainable recovery from the position we’re in.”