What I suspect will eventually be referred to by future historians as a depression now has a name.
According to the National Bureau of Economic Research
's Business Cycle Dating Committee, the 2007-2009 Recession (that's the new name, by the way) lasted from December 2007 until June 2009
. Sorry if you weren't notified that it was all over. Feel free to move about the cabin and party as the committee sees little chance of further turbulence tossing you into the overhead bins.
Of course, I doubt those who feel they have already been stuffed into a bin by the downturn will take much joy in the announcement. In fact, I suspect this news, first anticipated in HousingWire nearly three weeks ago
, caught many by surprise. That's because, at least on the surface, it has nothing to do with the plight of the average taxpayer, who is now unemployed in almost 10% of cases and under-employed in more than 16%, not to mention lighter by the elimination of 21% of his net worth.
The NBER committee said the economy is showing signs of recovery, companies are making money and stock prices are going up. Mergers and acquisitions are back as those who still hold money swoop down upon those that have spent all they had to stay alive through the downturn.
This is all good, we're told, even though the average taxpayer is not likely to feel much like putting on a party hat, at least not yet. Politicians weren't making much noise about the news either, for their own reasons. Republicans can't concede that the Obama administration hasn't completely burned everything down, and Democrats dare not confront the millions of voters who asked for change but then watched in horror as their lives changed for the worse.
I am tempted to suggest that this will go down in history as another “The War is Over” banner, except that the committee was too clever for that. In its report, the committee pointed out that if things did not continue to trend upward we were not to assume they were wrong, rather just consider it a whole new recession. Great.
Getting mad at the committee for defining a negative or positive economic event in terms that have nothing to do with the people whose actions create the economy is no better than killing the messenger. They can't help it that they're working from within a tower, an ivory tower. They are academics. They're not part of our world, or more precisely, we, in all of our real-world filth and theory-defying reality, are not part of theirs. We can't expect them to speak in terms that make any sense to the rest of us.
And yet, many in our industry seem content to stand by until the big brains tell us that it's OK to begin talking to our customers again, that the recession is over and we can begin hiring again. Is this really something we should leave up to people who obviously don't operate in the real world?
The members of the Business Cycle Dating Committee are teachers from Stanford, Harvard, Northwestern, M.I.T., Berkeley, and Princeton. If you're going to go with academics, I don't see how you could do better. The only problem is, I don't trust academics. It's probably a personal thing going back to that teacher who told me I'd never pass college English, much less make a living as a writer.
The economy will turn around when the American public becomes convinced that they are once again in control of their financial future. The industry can't give them that assurance with loan programs they don't understand. Waiting for them to make sense of a bunch of economic indicators won't work either. I think the industry has an opportunity to give the American homeowner something to believe in. We have to give them back their American dream.
This is not something a committee of academics can do. But without clearer dissent, the American public will listen and many will believe. We can stand by and let others try to figure out what the country's top brains are saying about a recovery that feels like a depression and watch them hunker down and do nothing -- or we can start rebuilding America's trust in our industry.
That means selling mortgages and real estate again. It means talking to our customers and giving them some hope in their financial future.
Yes, some need jobs, I understand that. But remember 85% of them actually have jobs with some money stuffed in the mattress to boot. What they don't have is a reason to spend it. The best option, they think, will be to sit on their hands if people they trust tell them that's all they can do.
It's high time we quit letting anyone with a microphone tell the consumer what they can and can't do. Let's start reaching out to our customers again and tell them what they can do. And let the academics talk to themselves.
Rick Grant is veteran journalist covering mortgage technology and the financial industry.
Follow him on Twitter: @NYRickGrant