The Recession Ain’t Over ‘Till It’s Over
09/27/2010 10:41 am EST
“Over.” What does that word mean? It depends on who’s talking. If you have a teenage daughter in your house, you’ve probably heard the expression: “It’s so-o over!”
If you’re betting on tonight’s game, you can take the “over” bet, looking for a high score. In the old days, the term was used by ham radio operators to signify that they had finished talking—as in “over and out.”
But no matter what your generation or interests, it’s pretty common to believe that the word “over” means “ended”—as in “the party’s over.”
That’s why it was so shocking last week to hear the National Bureau of Economic Research (NBER) declare that the recession was officially “over.” Sure, they were behind the curve. They said the recession was over in June of 2009.
Although it’s pretty standard practice among economists to date the beginnings and ends of recessions long after the fact, it was a shocker to ordinary Americans, who wondered what planet these distinguished NBER economists from elite universities like Harvard and Stanford were living on. Ordinary consumers don’t follow GDP numbers as closely as they notice the still-falling value of their homes, or the still- rising unemployment numbers.
Economists know that these are “lagging” indicators. But there are few unemployed economists, at least compared to factory workers and middle-management types.
For most America consumers, the recession is still on—full strength. They’re still struggling to pay their mortgages or get a small-business loan to keep their livelihood going. They’re still angry at banks, Wall Street, and politicians who seem to be ignoring their plight.
Remember, these are the same American consumers who thought the economic world revolved around them. Like young children, they were attended to and carried around by the system of grown-ups, who wanted to make sure they never fell or wanted for anything. Now, reality has set in.
But please, don’t tell the American consumer that this recession is over.
The NBER economists need not only a dose of reality, and a better calendar; they need a class in linguistics. What other words could they have chosen?
They could have said the recession had “bottomed out” in June, 2009. That would have been more understandable, if not palatable, to those who recently lost their jobs and just joined the half million or so who file new claims for unemployment.
Or they could have said the economy reached its “nadir” in June 2009—using a word so esoteric that TV newscasters and headline writers would have simply ignored the pronouncement.
But no, they had to use the word “over.”
That word signifies to most people that something has ended—and, by implication, that something new has started. But the daily headlines about economic misery don’t signify anything new, and better. Or even different.
That’s what has us so riled up. You don’t have to be a PhD economist to know that “it ain’t over till it’s over!” (Yogi Berra knew it, and he never got beyond eighth grade.) And for most Americans, the recession certainly isn’t over!
What word would you use to describe our current economic status? You can read how the NBER decides on dating recessions here.
Please join the conversation and have your say.