I'm Gary Stevenson, former trader  and people's economist, welcome  

back to Gary's economics today we  are going to talk about recessions

okay so there was a big report out by the IMF (the  international monetary fund) um in the last couple  

of weeks saying that the UK is going to avoid  a recession and this was reported in a lot of  

the media the BBC basically all the major news  outlets so I wanted to talk a little bit about  

what a recession is and really more than  anything why this way of understanding the  

economy is is not very helpful and perhaps even  somewhat damaging so a recession is very narrowly  

defined it's a technical economic phenomenon  which means two consecutive quarters of negative  

economic growth um for this reason I think it's a  little bit stupid to focus on things like narrowly  

missing a recession right the first reason is  you could have one quarter of negative growth and  

one quarter of very slightly positive growth and  officially that means you've missed the recession  

it's really the difference between having  -0.1% growth and +0.1% growth  

um really in one case you've had a recession  in one case you've missed the recession  

and the difference to your life is basically  completely invisible so this focus on whether  

we technically get a recession or not is pretty  ridiculous um the second thing is that really

whether we have a recession or not it's  totally possible that your life is getting  

worse whilst we are technically not in recession  I think the best example of that is in the 2008  

crisis the recession officially ended in the middle of 2009 and yet the the 10-15 years since 2009

have seen some of the biggest and fastest  falls in living standards for ordinary people  

in the history of the country in peacetime um  you know in the 10 years after 2010 especially  

after the election of the the conservative  coalition austerity government we saw

massive falls in living standards technically  that was not a period of recession and  

um what this connects to is something we've  mentioned in previous videos right which is  

recession is only a measure of what is happening  to GDP which is the overall size of the economy so  

if you have an economy which is growing slowly but  becoming much more unequal you could easily have  

what we have had which is living standards rising  for the richest whilst they fall for most ordinary  

people so I think this focus on a recession  is somewhat absurd I think it reveals the  

ridiculous the ridiculous or technocratic approach  that a lot of economists in the media have because  

really whether we have a recession or not it  doesn't make any difference, you know technically  

we've not been in a recession the last couple of  years and yet what has happened to ordinary living  

standards? well they've absolutely collapsed so you  should be focused on living standards for yourself  

for your family, your community and you shouldn't  really worry about whether we're technically  

in a recession or not, but I think what is more damaging than the basic irrelevance  

of whether we're in a recession, is the fact that  the framing of this economic crisis as a recession  

could quite possibly lead to significant further  economic deterioration and the reason I say that  

is that when you frame this economic crisis  this "cost of living crisis" as a recession  

people understand that to mean a kind of temporary fall in living conditions 

people think that recessions are things that you go through, they last a period  

of time, you come out of them and then things  get better; that is not what is going to happen  

in this crisis right things have gotten  significantly worse really really quickly  

that rate of extremely rapid decline I think will  slow down but things will continue to get worse  

over the next two, three, five, ten years and that  is because we have a fundamental problem in the  

core of our economy, of rapidly increasing wealth  inequality, which is not being fixed so this is  

not a crisis which is bad and then gets better  this is a crisis which is bad and then gets worse  

and I know that for sure because you can see  that the massively growing problem of the wealth  

distribution which has gotten massively worse in the last 3-4 years, is not get getting fixed,  

will not be fixed and will continue to get worse,  so by calling this economic crisis a recession  

it's as if, you've got cancer and the media is  calling it a cold, they're saying look you've  

got a temporary problem, take some rest,  drink some water, things will get better  

but that is not what is needed here because if  they say that and if you believe that then the  

fundamental underlying crisis of growing and  growing wealth inequality, of falling living  

standards, of the death of the middle class, all  the things that we've been talking about on this  

channel will not get resolved, and furthermore  it means that there will be no impetus to talk  

about or fix the massive amount of wealth the 700  billion pounds that has gone from the government  

to the richest people in the country in the  last couple of years, so whenever you hear the  

media talking about 'we're in a recession, we  missed a recession or we're out of recession'

ignore it and and ask them: what are you doing  about wealth inequality? what are you doing  

about the massive increase in wealth inequality  in the last 3 years? the enormous, the fastest  

ever increasing wealth of the richest people in  the country, the 700 billion pounds that has gone  

from the government to the richest, when you're  fixing these things? um yeah don't listen to the  

media talking about recession, focus on inequality  because that is what's going to matter if you  

don't fix it; things will get worse. If we do fix it;  things will get better, so ignore the recessions  

follow the money and demand that your politicians  fix wealth inequality and that your media start  

talking about it more and economists as well,  don't let them off because they're useless, thank  

you support the channel help us reduce wealth  inequality, help us prevent this economic disaster  

if we don't do anything things will get worse so  um we have to do stuff to make it better! thank you