The Business Cycle Dating Committee at the National Bureau of Economic Research (NBER) official declaration of the U.S. recession has elicited cries of “No sh*t, Sherlock” around the nation. The reliance on NBER’s definition of recession may result in protracted economic hardship.

Here’s why: too many politicians and bureaucrats rely on NBER’s declarations. None of them wants to be seen as a panic-monger or worse, turn out to be wrong. So they wait til NBER makes a pronouncement or until we reach a crisis point to take action. Who knows how much trouble could have been avoided had they been able to acknowledge the recession back in say, April.

Instead we had politicians burying their heads in the sand about the state of our economic system and a continuance of the “business as usual” that has led to our current financial crisis.

Republican politicians should be particularly concerned about how and who defines recession as the economy cost them the Presidency and almost all Congressional power. Still, it is not a partisan issue. The economy is digital and global which means it is fast moving. Our politicians and bureaucrats have to become more informed, nimble, and proactive if we want to be able to head off future economic downturns. The first step is to re-examine how we analyze economic data and define conditions such as “recession”.

We’re operating using an out-dated model. It is time to recognize it for what it is and take action before it can fail us again.