"We're probably in a depression now. But it's not going to be acknowledged until years go by. Because you have to see it behind you," said Peter Morici, a business professor at the University of Maryland.
Its been "acknowledged" already, that doesn't mean it really is, but lots of people are calling it one.
Another definition says a depression is a sustained recession during which the populace has to dispose of tangible assets to pay for everyday living. For some families, that's happening now.
That is something that is always happening "for some families".
Morici says a depression is a recession that "does not self-correct" because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit.
The structural problems are much more likely to self correct then to correct in response to anti "anti-depression" program which bails outs, subsidizes, and otherwise gets in the way of the correction.
What's more, the Fed no longer has the ability to kick-start recovery by lowering interest rates. The central bank has already effectively lowered the short-term rates it controls to zero
There are all sorts of things the fed can do besides pushing short term interest rates down. Good idea or not, to a large extent it has been doing them.
The depression that consumed most of the 1870s and followed something called the Panic of 1873 makes a better comparison to what's happening now...
...Gangs of orphans roamed city streets as men moved west to pursue cattle industry jobs. Widows struggled to make money by serving unlicensed liquor. Thousands of workers, many Civil War veterans, became transients.
In other words it doesn't make a good comparison to what's happening now.
Today's recession is already longer than all but two of the downturns since World War II.
Which means that two post WWII recession where longer than this one has been so far. Also more than two, including one as recent as the 80s, was deeper than this one has been so far, leaving no good reason to look back to the 1930s or 1870s for comparisons.
But for now, public officials are being extremely cautious about the D-word.
They aren't exactly be cautious about portraying the situation in apocalyptic terms, whether or not they use "the D-word". |
