Economists using the “D-word”

Stephen Dubner reviews Richard Posner’s forthcoming book, A Failure of Capitalism: The Crisis of ’08 and the Descent Into Depression. He highlights the following excerpts, which are right in line with this blog’s recent posts on the use of “collapse” language in mainstream conversation.

The world’s banking system collapsed last fall, was placed on life support at a cost of some trillions of dollars, and remains comatose. We may be too close to the event to grasp its enormity. A vocabulary rich only in euphemisms calls what has happened to the economy a “recession.” We are well beyond that. We are in the midst of the biggest economic crisis since the Great Depression of the 1930’s. It began as a recession — that is true — in December 2007, though it was not so gentle a downturn that it should have taken almost a year for economists to agree that a recession had begun then. (Economists have become a lagging indicator of our economic troubles.)

Posner also reflects on the use of the “D-word”, or “Depression”.  Is the “C-word” the humanitarian equivalent?

The word itself is taboo in respectable circles, reflecting a kind of magical thinking: if we don’t call the economic crisis a “depression,” it can’t be one. But no one who has lived through the modest downturns in the American economy of recent decades could think them comparable to the present situation. … It is the gravity of the economic downturn, the radicalism of the government’s responses, and the pervading sense of crisis that mark what the economy is going through as a depression.

…”Pervading sense of crisis”… isn’t that what is behind the increase in collapsitarian thinking?  And isn’t that a good thing, in terms of increased threat awareness?

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