Faltering economy could stay in recession in 2009

by Whitney Trotta

Tuesday, December 2, 2008 00:00

The National Economic Bureau of Research announced Monday that December 2007 marked the start of the current recession, which the bureau forecasted to last well into 2009.

NEBR spokesperson Donna Zerwitz said the recession could not have been prevented if the information was previously available.

“(It) really only matters as ‘historical reference’ — it’s not going to change your life or mine,” Zerwitz said in an e-mail to The Badger Herald.

Michael Collins, University of Wisconsin professor of consumer science and faculty director of the Center for Financial Security, said the announcement will not have real importance in the average consumer’s life, and the date is intended for historians and economic researchers.

“The date is not intended to be any kind of policy tool or community tool, and it is always backward-looking and can be revised after it is set,” Collins said. “But it seems everyone does react to it anyway.”

The Dow Jones dropped 680 points Monday, which according to Andrew Reschovsky, professor of public affairs and applied economics, is a result of real economic events as well as psychological aspects.

Reschovsky added the official announcement may have been a cause of the large drop in the Dow Jones, though he added the announcement itself is of no real importance.

“The official announcement that we are in a recession and the start date doesn’t come as a big surprise to not only the average American and certainly to economists,” Reschovsky said.

He predicted this announcement would have no affect on the state budget and what the Legislature will do in the next fiscal year.

Ryan Murray, press secretary for Senate Minority Leader Scott Fitzgerald, R-Juneau, said the news is not surprising and would not affect the priorities the Senate has laid out for Wisconsin, such as avoiding tax increases.

“They are basically putting a label on a problem that everyone knew about already, and it is not going to change our plan of attack at all,” Murray said.