I have been accused in the comments section of this blog of being unprofessional. The basis of the claim is twofold.
First it was said that my claim that we are in recession is wrong because the technical convention for describing a recession is two-quarters of declining GDP and in the last quarter there has, technically, been considerable GDP growth. It was, then said that it was unprofessional for me to suggest that we are in a recession.
Second, it has been said that my suggestion that the person making this claim was ‘stupid' for doing so was unprofessional.
I found this interesting. I am aware that I know more about the complainant than I can disclose. Suffice to say that I suspect that their claim suggests that they have some economic training.
And let me concede, that if the conventions of what might be called ‘normal times' were to be adhered to then the claim they make about being in recession might make sense. But that is as far as my concession goes.
These are of course, not normal times. The events of March onwards have been unprecedented. To presume that the convention on describing recessions (not rules, I stress, because the description of recession is just a convention and most certainly not a rule) applies in abnormal times is absurd.
It does, of course, require professional judgement to decide when times might be abnormal. A technician (which is what I think my commentator to be) does not apply that judgement. They do as a result get an answer that is absurd. Stupid even, because it is very clearly wrong to apply a convention in a circumstance for which it was not intended.
To decide when rules do not apply is what being professional is, in this sense. It's what differentiates a doctor from a nurse: the doctor can decide when to break a protocol, and a nurse cannot. It similarly should divide an accountant from a bookkeeper; a lawyer from a legal clerk and even a judge from a police officer. Rules exist for reasons. Professionals have to use their judgement as to when they cannot apply, which is most often when they would result in stupid outcomes.
I would argue that my comments were in that case exactly what a professional person should do: I disapplied the rules. Professionals should almost certainly do that more often. We would not, for example, have suffered an audit crisis if they had done so.
And to say someone is stupid for continually claiming the rule applies is no more than to say what Einstein once did when he was supposed to have said "Insanity is doing the same thing over and over again and expecting different results."
We are in a deep recession and are heading for a depression. I will absolutely reserve my professional right to say so, and to say it's stupid to claim otherwise.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Let’s see how many credible economists support your claim. I predict zero.
You make a good general point which has been undermined in many fields for years. One aim of neolibs, dating from Ms Thatcher’s time, has been to centralise power, under cover of a narrative about “empowerment” and such stuff. One means of doing that has been to undermine the very idea of a professional. And so we see in every arena the introduction of tick box systems, and a growing fear of departure from protocols (which are, crucially, written by people who are not professionals in that given field ) on pain of censure or even being struck off from practice. It has been done gradually, first attacking weaker professional groups but by now extended to long established bodies like doctors and lawyers.
It has a superficial attraction, particularly in a climate where trust has been systematically attacked. On the face of it it ensures “fairness” and “best practice” and other hurrah things. And there is truth in that, to a certain extent if done honestly, as professional bodies used to ensure. Professionals who made such departures were judged solely by their peers, as being in a position to know if the decision was reasonable in the circumstances. Now the judgement is “objective” (yay!) and the dogs in the street can make it. You either did or did not follow the rules. Which we all know leads to absurd outcomes, at times.
At one level what is happening is the middle class version of fordism: skilled people are reduced to production line workers, with neither true expertise, respect, pride in their work, nor any status: the loss of the latter lags, but it happens. And as we have seen, the next step is abolition of the “closed shop” as an unjustifiable arrangement.
I am not in thrall to the professions: there are obvious problems of the “conspiracy against the laity” type. But their independence of “management consultant” bullshit is actually a vital pillar of democracy, in the sense that they represent centres of power which can oppose damaging govt interests: so long as the consequences of breaching professional standards outweigh the consequences of blindly doing what you are told, the decisions do not automatically lie where ideologues would like them to. And this is what we are losing apace.
It is profoundly depressing that this is not spelled out more often, loudly and unashamedly. For by now, even the very long established professions with a previously good conceptual grasp of professional responsibility appear to be confused: and young members may not even have the idea at all, given how long this narrative of “algorithms” etc has been ascendant.
Thanks
Or to put it another way of course business will pick up after a quarter when all the shops were closed.
Doesn’t mean the economy is booming nor that you can judge it based on comparing q3 with q2.
@Simon
No-one was claiming that the economy is ‘booming’
One person was claiming a ‘deep recession’ which simply doesn’t stand up to basic scrutiny.
That is all.
If this is not a deep recession what the heck is?
It’s unprecedented but still you keep denying it
I agree – rules/guidelines are only ever the starting point. Understanding why they are there in the first place helps inform when you go outwith the rule or guideline.
So many rely only on the ‘rules’ that they forget the purpose. It leads to either inaction or inappropriate action.
I think Lou Reed (bless him) summed this all up in the 1990’s – the lyrics from his song ‘Endless Cycle’ seem very prescient at this time:
“The bias of the father runs on to the son, leavin’ him bothered and bewildered
The drugs in his veins only cause him to spit at the face starin’ back in the mirror
How can he tell a good act from the bad, he can’t even remember his name
How can he do what needs to be done when he’s a follower and not a leader?
The sickness of the mother runs on through the girl, leavin’ her small and helpless
Liquor files through her brain with the force of a gun, leavin’ her running in circles
How can she tell a good act from the bad when she’s flat on her back in her room?
How can she do what needs to be done when she’s a coward and a bleeder?”
You have chosen to speak up and be a leader – a coward, a follower and a bleeder you are not.
I wish there were more like you – including myself for that matter.
It was reported in March 2020 – “The costs [of the Corona virus crisis] are expected to exceed anything known in Germany, from economic crises to natural disasters in recent decades”!
If that statement is true then the 2-Qtr definition of a recession is weak.
In fact, the recession definition “a decline in the seasonally and calendar adjusted real gross domestic product (GDP) in at least two successive quarters” is incomplete as it must reference what the decline is relative to, to be interrupted?
If I were the manager of a nuclear facility and the water level dropped 20% below acceptable levels and after some tinkering it was -10%, would I be worried?
From the literature an article in 2008, “How to Define a Recession?” suggests:
i. “The main disadvantage of the Shiskin rule [two quarters] is that the rate of change of the seasonally and calendar adjusted GDP go through erratic fluctuations due to subsequent data revisions, whereby a minus can easily become a plus.” [1] It seems politically advantageous to define a recession thus.
and another definition
ii. “a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales” [1]. Seems adequate but needs expanding.
[1] http://hdl.handle.net/10419/166344
@Tony_B:
ii. “a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales” [1]. Seems adequate but needs expanding.
The last 3 months have not shown a ‘significant decline in economic activity across the economy’, they have in fact shown strong growth, albeit from a lower base, given the drop in output observed early in the year.
Thanks for confirming my point.
Mr Prowse
You keep digging your hole
I will not be posting further comment fr4om you
Richard Murphy
Oh for goodness sake Richard P – so – you’ll be telling us that one swallow does makes a summer next?
Or how about there being one swallow means that climate change is not happening?
I’d welcome an upturn in the economy but it should be one driven by green policy – not the dregs of the fossil fuel economy.
🙂
Mr Prowse,
“…. how many credible economists support your claim”?.
May I ask you to provide the names of the “credible economists”? That will help.
Meanwhile, may I also suggest that you are demonstrating the wonderful, but too often overlooked genius of the economics discipline; its grasp of 20/20 hindsight. In periods of calm, the weakness of economics’ (as a supposed science) capacity to predict anything of much utility or value is not typically noticed. In turbulent and chaotic times the inherent intellectual weakness of the discipline becomes cruelly exposed. The application of your rules is being applied to data that is already grossly out of date. It is nearly worthless. Richard is at least attempting to display genuine foresight; risky I concede, but a more useful activity in the real world than righteously pointing at a rule book that is quite obviously no longer up to the actual task at hand.
For the avoidance of doubt, I mean of course the list of economists Mr Prowse deems “credible”.
The economic yo-yo effect of the coronavirus should give everyone pause for thought that it can easily be “business” as usual. In certain sectors of the economy business have decided to shut down and some deliberately reduce capacity all of which is going to have a demand reducing effect on economies and nobody has a crystal ball how long this deflationary effect will last. This deflationary effect will also be compounded by monetary illiterate politicians trying to balance their governments books.
Definitions of recession and depression, are acknowledged to be a degree arbitrary. I think before the pandemic, BoE estimated the economy working at around 1%? below ‘capacity (also subject to definition?). A measure of unused capacity – might be better. GDPin August was still 9.2% below Feb – if that doesnt merit some kind of recession/depression characterisation, not sure what does.
I think you should be wary of unintentionally insulting nurses, police officers, legal clerks and bookkeepers. I know the first two hold their professionalism as one of their defining features, and I suspect the second two may too. They won’t be happy at you suggesting they don’t have the same professionalism as some other occupation, though they will readily agree they have different roles.
But I agree with your main thrust: that it is one of the defining features of a professional that they have the deep understanding and experience to recognise when to make a decision which is different from the “standard” one but correct due to the specific circumstances which apply.
I was in a bed when a nurse told a doctor that s/he could not over rule a protocol even if my care required it, but that the doctor could
The doctor did
My state improved very quickly
My comment is based on different roles and limitations
Was this when you were the illest you’ve ever been, with Covid-19?
I heard on the radio that they are urgently in need of men who have had Covid-19 to provide samples for use with anti-body research. This could save lives. I am sure you will be volunteering. Can you confirm this?
I have volunteered for a research programme, since you ask
There *was* a recession in 2020: GDP fell by 2.5% in 2020q1 and then by a record 19.8% in q2. (See https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/quarterlynationalaccounts/apriltojune2020)
Although there was then a partial rebound with growth of 8% in the months June to August (see https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/august2020) it would seem fairly obvious that overall this is a year of severe recession and indeed slump – worse than the 2008 slump. Particularly as the new set of lockdowns may well result in negative growth in q4.
Richard, your assessment seems very professional – and correct! – to me.
Much appreciated Howard
One of the major developments in the neoliberal era has been the deprofessionalising of the professions. Scale fees have been abolished and professionals are now, in my view, compromised by success related fees and/or a piece of the equity in the project being undertaken. How can one give a professional viewpoint if one has a stake in the game?
It’s a bit like senior political advisors being civil servants, no??