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It ain’t over ’til it’s over

Written By: - Date published: 11:46 am, September 10th, 2009 - 11 comments
Categories: economy - Tags:

The economists think the recession is probably over (for now). If you’re one of the lucky ones, you may very well be thinking ‘well that wasn’t so bad’ but what does the end of the recession mean? All it means is that the economy is has stopped shrinking.

Now, say you and me were out climbing a mountain and you slipped and slid some way down the hill. Me calling out ‘hey! you’ve stopped falling’ isn’t going to be very comforting, but the point where you stop falling is the end of the recession in an economist’s eyes. You’re not going to feel like you’ve recovered what you lost in the slide until you’re back at least as high as when you started falling.

So, how long until New Zealand will be back where it started before the recession?

gdp per capita projections
(sources: Budget 2009 forecasts, stats)

It will be 2014, seven years, until we get back to the GDP per person of $43,400 that the economy peaked at in 2007. And there was too much poverty (and too much middle class moaning) even at that level.

Now, that’s assuming everything goes according to Treasury’s projections. Another oil spike, a drought or a burst housing bubble and we’ll be slipping down the slope again.

All the more reason for the Government to get its policy settings right by helping break our addiction to oil, reducing our carbon emissions to aid in the struggle against climate change, and discouraging over-investment in housing while providing the right kind of stimulus to create jobs and sustainable wealth.

11 comments on “It ain’t over ’til it’s over ”

  1. Jasper 1

    Well I wouldn’t expect to see much coming out from this government. All I’ve seen passed are unsubstantial laws that certainly won’t help the economy
    – 90 day bill
    – cellphone ban
    – alcohol limit for drivers appears to be up for review
    – cutting ACE

    You know – I think National are just NZ1st in disguise now. Populist measures mixed in with misguided thinking that keeps the electorate happy.
    Appears to be 1 wrong move = 4 right moves and people don’t care.

  2. Pascal's bookie 2

    ” I think National are just NZ1st in disguise now.”

    Nah. They’re just waiting for a second term when they’ll start selling everything.

  3. RedLogix 3

    Steven Keen doesn’t think so either.

    The comment threads on his blogs are unusually well worth reading too.

  4. Cue: Flashback – Election night 2008. Labour promises free KFC to all and as many minutes of cell phone calls while you’re driving and sneaks in for a historical fourth term.

    Move forward to September 2009 and the economists announce NZ is technically coming out of recession.

    Standard trumpets economic miracle and the management skills of Labour’s visionary Finance Minister.

    • aj 4.1

      “Standard trumpets economic miracle and the management skills of Labour’s visionary Finance Minister”

      Bill English praised Labour’s management, as have all credible economists, so I don’t think your opinion counts for much

    • lprent 4.2

      Ah one of those wingnut myths being regurgitating… A bit like Nationals mythical tax cuts

      • Daveski 4.2.1

        Actually, I was thinking how the Standard would report the end of the sky falling and I wasn’t disappointed. It was a bit like the way it was reported that the increase in the minimum wage was actually a cut!

        Enjoy the conference LP – there’s always opportunity in defeat and as a wingnut it will be interesting to see how Labour responds.

        And lol @ aj … good come back.

  5. ben 5

    Marty, this may be the first post I’ve ever seen from you where you didn’t make some obvious mistake in the statistics. Well done.

  6. What’s with “if an oil spike happens”? How about “when an oil spike happens.”

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