Earth to idiots: We are in recession

The September quarter GDP figures are likely to show the economy has shrunk by 3 per cent, possibly 4 per cent.

It’s hard to know who are the bigger idiots: those who confidently predicted GDP would go negative in the June quarter or those who now hail the positive number as proof we’ve avoided a “double-dip recession”.

The core idiocy is of course the fixation on “two successive quarters of negative GDP” as proof of a recession – sometimes, equally idiotically modified to being proof of a “technical recession”.

There’s nothing “technical” about a recession. There is only basic reality - businesses going broke, large numbers of people losing their jobs.

The whole country is in recession right now.

Look at the calendar – mine says it is September. The ABS figures Wednesday measured the economy in the June quarter. Earth to idiots: that was yesterday.

To repeat, right now NSW and Victoria are in recessions as bad as that of the June quarter last year, and both Chairman Dan and Premier Berejiklian have formally committed to keeping their states there at least through October.

Talking of idiocy, the Age website headlined Wednesday: “(Victorian) Lockdown to continue until September 23”.

Until September 23?

That’s the date when only the most trivial of restrictions might be removed; and so at best, will still leave Victorians locked, locked, locked down at near the toughest levels we’ve seen anywhere outside Wuhan in the early days.

As I wrote in The Australian last Saturday: “The important question is not whether we were already in recession in the June quarter – we were not”.

I wrote that the June quarter GDP number should come in with positive growth, in terms of what was generally happening with the economy, and with only Victoria’s Lockdown 4.0 of any major negative significance.

The September quarter GDP figures are likely to show the economy has shrunk by 3 per cent, possibly 4 per cent.

The important question wasn’t even whether the economy had gone into recession since the June quarter; because there simply wasn’t any serious question about that. It had.

Again, as I wrote, when we get the GDP figures for the September quarter (in early December) they will show the economy will have shrunk by at least 3 per cent.

Maybe if I was writing that sentence today, I’d push it up to 4 per cent. That – and the reality in destroyed lives, bruised and battered businesses and lost jobs and futures – is a recession.

And it won’t be un-made a recession if just because we get a positive GDP number in the December quarter.

That’s also what the national figure will be, for all of Australia.

It won’t be as bad as the completely unprecedented 7 per cent plunge courtesy of the national lockdown through the June quarter 2020.

We don’t measure state GDPs, but if we did, both Victoria and NSW would be seeing falls of around 6-7 per cent – as bad as it was for them and all of Australia a year ago.

The main damage premiers do with lockdowns is to their own states; but given the importance of Victoria and NSW, their lockdowns have dragged all the other states down as well – true, into much milder recession.

Queensland is being hit hardest because of the importance of tourism and with its two main domestic sources (self) cut off with its own border closure.

WA is insulated to some extent by its massive tax revenues from iron ore.

Again as I wrote the only important question is how long we stay in recession?

Do the premiers of NSW and Vic lock us in to Christmas? Or into 2022; locking their own 15m citizens into economic cages as well as actual, if homely, ones?

Yes, both the recession last year and this one we are now living through are unusual and indeed unique. For the first time ever, politicians have ordered their economies into recession; have ordered businesses be destroyed, people lose their jobs.

But it is still a recession.