The Worst Recession Since the Depression? No Way.

DID YOU HAPPEN to catch the Sunday New York Time Magazine story about economist Nouriel Roubini? He's about the closest thing to a rockstar that our dowdy profession has. He's a celeb right now because, for years he predicted the collapse of the U.S. housing boom. Never mind that he was wrong for years before he was finally right. He was indeed finally right, and for the financial media — for whom Attention Deficit Disorder is a way of life — that's enough. So Roubini is the man of the hour, flitting around the globe consulting with the world's central banks, quoted constantly in the media, and with a gushingly adulatory feature about him in last Sunday's New York Times Magazine, dramatically dubbing him "Dr. Doom."

He looks the part, too. Perfect. The photo of him in the Times shows him with an expression on his face that is both grim and worried, as though he were afraid that the real estate collapse he predicted were about to become literal, crushing him right there on the streets of New York. Whenever I've been on CNBC with him it's even worse. He's relentlessly downbeat, and humorless — he gives off the aura of heartless menace of a villain on "24." The Times story says, "He rarely smiles, and when he does, his face... contorts into something more closely resembling a grimace."

As quoted in the Times, Roubini says, “We are in a recession, and denying it is nonsense.” And it's not over. It's going to be the “worst since the Great Depression.”

This seems to match the mood in the country right now. Polls show that the majority of Americans think we are in a recession. So Roubini is hailed, as a source in the Times article calls him, a "prophet."

But it's not that simple. If Roubini is a "prophet" because his long-standing recession call has finally come true, then there must be a lot of "prophets" out there. Polls have been showing since 2005 that either a majority or large plurality of Americans believe we are in a recession.

But we are not in a recession. Economic rockstar or not, I think Roubini is just plain wrong.

Roubini may be proven correct eventually, by waiting even longer for his broken clock to tell the right time by sheer coincidence. But he's no prophet. Or if he is, he's just like any other prophet shouting his prophecies — and waiting for them to maybe come true , or maybe not come true.

The word "recession" has a specific meaning to economists who study the business cycle. Whether we are in a recession or not is therefore an objective matter of science, not opinion.

Many people think that the definition of "recession" is two consecutive quarters of negative real GDP growth. That's actually not true — in fact, the 2001 recession doesn't meet that definition.

The official determination of recessions is made by a committee of the National Bureau of Economic Research. They have latitude to use their judgment in making the determination — it's not exactly a formula — but they are clear about what factors they consider, and how those factors have to behave to result in a determination.