Do You Want To Play RECESSION?

Hey kids! Let’s all play the exciting new game from Felonious Punk Enterprises: RECESSION! It’s an exciting new game where everyone gives money back to the government while lowering their long-term quality of living! If you’re 16 years or older, you’ve played this game before, and look you! You turned out just fine! RECESSION! is for everyone, especially if you live in China or one of those other ‘nasty’ countries that have been taking advantage of us and mistreating us for years and years.

First, let’s meet the judge of this game: the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER). Who the fuck is NBER? NBER is a private, non-profit, non-partisan research organization. It’s not a government agency. Despite being non-governmental, the NBER’s declarations on recession start dates (peaks) and end dates (troughs) are the standard accepted by economists, policymakers, and the media. Whoever meets all the qualifications for RECESSION! wins the game!

What’s that, you don’t know what the qualifications are for RECESSION!? Here, we’ll go over the rules real quick. After all, it’s not like we get to use these things very often, you know.

The NBER defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months.”  

I know, that’s a lot of big words, isn’t it! Let’s break down what that means:

1. “Significant Decline”: The committee considers the depth (how severe the decline is), diffusion (how widespread it is across different sectors), and duration (how long it lasts). A very sharp, deep, and widespread decline might be classified as a recession even if it lasts slightly less than two quarters, though duration is still a key factor.
2. “Spread Across the Economy”: The downturn can’t be confined to just one industry or region. The committee looks for evidence that the weakness is affecting multiple sectors of the economy broadly.  
3. “Lasting More Than a Few Months”: This typically means at least six months (two quarters), aligning somewhat with the rule of thumb, but it’s not a rigid requirement. The committee primarily looks at monthly data.

It’s important to note that the common rule of thumb you often hear – “two consecutive quarters of declining real Gross Domestic Product (GDP)” – is NOT the official definition used by the NBER. While sustained GDP decline is a major factor, the NBER uses a broader, more nuanced definition.

Are you ready? Here’s how the NBER decides who is in RECESSION! and who isn’t. The NBER judges you based on:

Real Personal Income Less Transfers (PILT): Income people receive from work and investments, adjusted for inflation (excluding government benefits). This does not include the gifts you get for your birthday or anything that you manage to squeeze out of your Mommy and Daddy, though be aware that Daddy gets really touchy if you try playing with his wallet.

Nonfarm Payroll Employment: The number of jobs in the economy (a key measure of the labor market). This is a tough number to measure when all those new DOGE employees keep saying, “We don’t need you” on one day and then “Uhm, can you come back to work?” on the next day. Those silly DOGE people! They don’t really know what they’re doing!

Employment as measured by the household survey: An alternative measure of employment. This is how Mommy lists herself as employed even though she stays home and puts pictures on the Internet all day. This also counts if Daddy stays home and tells people he is “selling insurance” online.

Real Personal Consumption Expenditures: How much consumers are spending, adjusted for inflation. This is all the money that Mommy and Daddy spend at the store. You know you’re close to winning when Daddy comes home all red-faced, and Mommy has to call someone and apologize for the mean things Daddy said at the store.

Sales: Real manufacturing and trade sales. This is the stuff your company sells. If you don’t have a company, you can just make one up and give them any ol’ number. No one ever checks to see if its real.

Industrial Production: The output of factories, mines, and utilities. So, let’s say you own a company, and your company has factories. You were making a lot of stuff a few weeks ago, then those nasty tariffs hit and you can’t afford all that yummy plastic and electronics that you need! That’s not very fair, is it? So now, you’re not making as much stuff, but you are managing to stay in business by charging a lot more for the things you’ve already made.

Doesn’t this sound like so much fun? Seriously, RECESSION! is the game that everyone’s going to be playing this Spring! There are just a couple more things before we start.

First, the NBER doesn’t have to play by the rules. If they get tired and want to go on to bed, they just say that someone won the game. They usually pick who’s lost the most money or something. They really aren’t any fun when they do that.

They can also change their minds and say that your sister won the game you played last week when you know that she was hiding money inside her pajamas so that it would look like she was poorer than everyone else. It sounds a lot like cheating, and you really don’t care about last week’s stupid game anyway.

Are you ready to play? Cool, get the candles out and light them because Daddy says we can’t afford to turn the lights on after dinner.