Who says we're in a recession and what exactly is it?

In just the last few months, the economy has become the topic of many conversations. The word recession has been used 141 times in the Congressional Record this year and it is only May. Even presidential hopeful John McCain said Monday he believes the country is in recession, adding “these are very, very tough times in America.”

So what exactly constitutes tough times in America, and what exactly is a recession? Are we really in a recession?

If you were to take an economics class you would learn that a recession is a decline in a country's real gross domestic product or negative real economic growth, for two or more successive quarters of a year. That is the text book definition.

So if you go by the text book definition, we are not in a recession. We have come close to the text book definition, but not quite there.

Of course the text book definition isn't good enough to determine if we are in a recession or not. In the US we have something called the Business Cycle Dating Committee of the National Bureau of Economic Research. This seven person panel is who decides whether the US is in a recession or not. I guess the text book definition was not good enough.

Anyways, it turns out that three members of this committee are also contributors and advisors to either John McCain and Barack Obama.

So why is this such a big deal? Well, because right now the economy is the number one issue on the campaign trail, and America goes into “economical shock” when they here the word recession. Knowing that, do you suppose there might be some political motivation for and against labeling the economy in a recession? I think so. No political party has ever retained the presidency when the country was in recession. It would be safe to say John McCain has a lot riding on this panel.

Of course the members of the panel promise us their political considerations do not enter into their calculations. Uh....sure...advisors to political campaigns would never have political considerations.