Whose Recession is Over? Not Obama's

The big news Thursday was that the recession appears to be over, but if you believe that, you're probably an economist. Not a politician.

Economists know that a recession is two consecutive quarters of negative growth: The economy gets smaller instead of bigger. Recently, we have had four such quarters, the worst recession since the 1930s.

As soon as we get a positive quarter, such as the one that just ended in September, that's one key indicator that the recession may be over. For the economists.

Politicians know that a recession is any protracted period of economic pain and the social strain that follows. The result is always politically hazardous. And a sudden bump-up in somebody's economic calculations — however valid — does not end the hazard. It might even make it worse.

If there is too much happy talk about "the end of the recession," while too many people are still feeling the effects, the contrast can be embittering and the political backlash devastating. It's tempting for the administration to tout the 3.5 percent annualized growth number released this week as a milestone in the recovery, but to do so is to raise expectations too fast, too soon.

A Perverse Logic

People are often willing to suffer their share when bad times come on a broad scale. But it's a different story when they're told things are getting better and they wonder why nothing is better for them. That is why, in the sometimes perverse logic of politics, voters often punish officeholders for a bad economy well after it has begun getting better.

It happened to the first President Bush. In 1991 the economy shrank for two quarters, a sharp but short contraction that probably ended before the year was out. The president's economic advisers told him the recession was over. They were right, on the numbers, and unfortunately the president believed them.

The president's 1992 re-election campaign asserted that the historic brevity of both the 1991 Persian Gulf War and the recession of that year were reasons to re-elect Bush. But were both the war and the recession really over? Voters were not so sure, and the president's stubborn insistence that the economy was back became a target for satirists. In a sense, his eagerness for the recession to be forgotten prolonged its political impact.

Some parts of the country had felt the recession far more than others, and one of the worst hit was New Hampshire. Few in that state believed recovery was under way in 1992, and upstart challenger Pat Buchanan gave the president a fight in the Republican primary.

Bush still won the nomination easily, but he never quite recovered his momentum. And he lost the Granite State, and the presidency, that fall to Bill Clinton, whose campaign manager summed up the election by saying, "It's the economy, stupid."

The same logic that held the president of 1992 accountable for a recession that had ended a year earlier now holds the president of 2009 accountable for one he inherited. One year after his election, President Obama knows the Oval Office is also an oblong bull's-eye.

And while he is years away from the next New Hampshire primary, the young president needs desperately the political legitimacy and congressional support that accompany healthy poll numbers.

'Recession Remains Alive And Acute'

President Obama's approval numbers have settled in the mid-50s for the moment. The next move up or down will be critical to his chances of passing systemic changes related to health care, financial regulation, energy and the environment.

His standing will change with each decision he makes — especially on emotional issues such as the mission in Afghanistan — but ultimately his numbers will very likely track the performance of the economy. The key measure here is not the GDP but the unemployment rate, and that metric is still rising. Next week, it is likely to break through 10 percent, heading in the wrong direction. This is the same "lagging indicator" that sandbagged the White House in 1992.

That is why administration officials are right to restrain any celebration over the GDP and stress instead the challenge of jobs. Treasury Secretary Timothy Geithner hit the right note at a congressional hearing this week when he said unemployment was still "unacceptably high."

"For every person out of work, for every family facing foreclosure, for every small business facing a credit crunch, the recession remains alive and acute," the secretary said.

Remembering that is the key to protecting the promise of this presidency — and its hugely ambitious agenda.

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