It's not clear if the media is moving beyond Great Depression
analogies, or if Depression chic is morphing into something new and even more absurd. In a recent Bloomberg News story about the National
Bureau of Economic Research's pronouncement that the economy officially
entered a recession in December 2007, a source offered a new name for
the 2008 recession: "The Great Recession."
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Is the term accurate? The same Bloomberg story notes that since 1945
there have been only two longer recessions, in 1974-1975 and 1982-1983, which both lasted 16 months (by comparison, the Great Depression
lasted 43 months between 1929 and 1933), so appending "Great" onto the
2008 recession seems premature at this point. Shouldn't we at least
wait until May for NBER to declare we're still in recession before
coining such terminology? After all, it's not a foregone conclusion
that this recession will outlast the others. And given how fast
recessions can appear and disappear, we could begin a recovery before
May, especially when you consider that the government is pumping
large sums into the financial system and seems to be preparing a major
stimulus package.
In fact, putting the banking crisis aside (which isn't that easy),
the current recession is a shallow one in some ways with only 6.5%
unemployment; both longer recessions generated far worse unemployment
numbers. So unless the economy takes a substantially worse turn (and it
certainly could), it's still inaccurate to compare what's going on now
to the Great Depression let alone call it the Great Recession. Why rush
bad tidings? - Matthew Wurtzel
See story from Bloomberg
See the NBER's timelines of U.S. economic cycles
Matthew Wurtzel is the editor of Dealscape.
Comments
There is so much focus on defining what stage of recession / depression we are currently in, that we are prolonging the inevitable - America will recover. Why not focus on the future and try to name the period that will showcase a drastic shift that will showcase the Profound Rebound. As a naming company we took on this challenge and would like to hear what you think - http://tinyurl.com/bsnulr