Elizabeth Bailey has recently replaced Martin Feldstein as the chairman of the National Bureau of Economic Research (NBER). The Bush administration and the Republican party live in fear that the NBER will declare a recession. Mr Feldstein, who still serves on the recession dating committee, recently observed:

The U.S. may now be in a “very long” recession that will drive the unemployment rate higher, with little that the Federal Reserve can do to help.

An official recession would be a big negative for the Republicans in the fall elections, which is why every statistical and propaganda effort conceivable is being made to disguise the reality of recession. Paul Kasriel of Northern Trust lays out the evidence and sums up:

After the November elections, the National Bureau of Economic Research will tell us what we and the Fed already know - the U.S. economy currently is in a recession. Industrial commodity prices appear to have peaked, which will begin to moderate the trend in headline U.S. inflation in a couple of months. Businesses have little pricing power at the consumer level. There is no evidence of a wage-price spiral. The inflation-expectations’ anchor does not appear to be dragging. The dollar appears to have stabilized, in large part because of economic growth in the rest of the world appears to be slowing significantly. Losses continue to mount on the books of financial institutions, which will inhibit credit creation. Is the Fed going to raise its funds rate target over the remainder of 2008? Not bloody likely!