n the space of just over a month, the federal government has shifted from a stance of no-recession-no-deficit to maybe-recession-in-which-case-yes-deficit.
There is no shame in this. Even the British economist John Maynard Keynes, challenged on his theoretical flip-flopping, said when the facts change, he changes his mind.
Last weekend, Prime Minister Stephen Harper, in a speech to the APEC summit in Lima, acknowledged the obvious. Canada, he said, may be headed for a technical recession.
Does a technical recession differ from the real thing? Nope. The modifier "technical" is meant to mollify us. It suggests there is nothing fundamentally wrong; it's only a glitch, like a loose connecting wire, and no one is to blame. The implication is that the recession -- whatever that is -- will be short, shallow and of little consequence.
A recession, technical or otherwise, is commonly defined by economists as two consecutive quarters of negative growth -- an obfuscating oxymoron if there ever was one.
"Do the writers of quarterly financial updates really think we can be tricked into thinking that 'negative' growth is just a special kind of growth as opposed to its direct opposite? Ottawa Citizen associate editor Mark Sutcliff asked a couple of years ago. Source...