Can Mr. Decker, or any other econ-geek verify this?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Can anyone verify this quote? This seems hilarious until you remember that there are those here who say the goverment is painting 'smiley faces'. (But it still makes me chuckle.)
The qoute: 'Depressions are frightful to the general public. The media and political types react hysterically to the very words involved. In fact the term "depression" was so scary after 1940 that the term "recession" meaning a less serious pause in business activity with two quarters net negative economic or GNP growth) was coined to replace it. Then during the Carter administration the term "recession" was banned as also being too scary, leaving one administration economist testifying before Congress saying that since he could no longer use the word "recession" he would use the word "banana" to refer to two consecutive quarters of net GNP contraction.'
I found this at
This seems to bolster the theory that the stock market is only as good as people think it is. That sort of explains the "only thing we have to fear is fear itself" thing. But that has been covered here.
Any feedback would be appreciated.
Watch six and keep your...
-- eyes_open (firstname.lastname@example.org), July 15, 1999
Or, as Dan Quayle spells it...BANANAE
-- Craig (email@example.com), July 15, 1999.
--Or as William Jefferson Blythe Clinton would say: (insert condescending twang here) - "Hey honey, wanna see my banana?"
I suppose that now since he has redefined what "sex" and "perjury" mean, should we be surprised how they spin "recession?"
How does "slight growth retraction" sound in place of "depression?"
What a difference an Administration makes.
-- INVAR (firstname.lastname@example.org), July 15, 1999.
Actually, if you go back further in financial history, "depression" was the politically correct term invented by the Roosevelt administration to replace the previous label "bank panics". This was a far more accurate description of the economic situation, but FDR didn't want the public to dwell on that sore point.
-- Sure M. Worried (SureMWorried@bout.y2k.coming), July 15, 1999.
Two suggestions for the replacement of the word recession:
Economic Owwie Monetary BooBoo Period
-- Craig (email@example.com), July 15, 1999.
-- eyes --, I remember watching the news and hearing that quote. Very refreshing for a government type. I remember the man as a senior somebody or other in the Carter administration. He was fed up with all of the euphemisms about recession / depression and wanted to just speak his mind. He did not last long in government because he wasn't mealy-mouthed enough - moved on to a professorship or think tank.
I've thought of recessions as "bananas" ever since.
-- Margaret (firstname.lastname@example.org), July 15, 1999.
-- mar (Derigueur2@aol.com), July 15, 1999.
It's hard to believe any story where an economist has a sense of humor. (laughter)
The Economist January 23-29, 1999 FINANCE AND ECONOMICS
THIS weeks instalment in our occasional series on the use and abuse of jargon focuses on doomology. Events in Brazil have revived the market in economic gloom. Newspapers are again warning of global recession, slump, or even depression. But when does a recession become a depression? A cynical answer is: when your neighbour loses his job its a slowdown (or, if you dislike him, a correction); when you lose yours, its a recession; when an economic journalist loses his, thats a depression.
The duller textbook definition of a recession is two consecutive quarters of declining output. But recession can also be used to describe any period in which GDP growth falls below an economys trend growth rate (the sum of labour-force growth and productivity gains).
Another complication is the definition of a world recession. Should the world economy expand by less than 1.5% this year, as seems likely, that would by past standards count as a recession. During the past three world recessions (1975, 1982 and 1991) output rose by an average of 1.5%: the decline in GDP in rich economies was offset by growth in developing economies.
Even in its worst post-war recession, in 1974-75, Americas GDP fell by only 3.7% from peak to trough. In contrast, a slump is where output falls by at least 10%as in Finland in the early 1990s; a depression is an even deeper and more prolonged slumpsuch as that now being experienced in Indonesia. Indonesias economy shrank by 14% last year, and output may fall by a further 4% this year. In the Great Depression of the early 1930s Americas output fell by 30%.
But the word depression should be used sparingly. A world recession is possible this year, but surely not a depression. In the 19th century, downturns were more often called depressions, but the term got a bad name in the 1930s and recession was coined. That relabelling may not be the last. Alfred Kahn, one of Jimmy Carters economic advisers, was once rebuked by the president for scaring people by talking of looming recession. Mr Kahn, in his next speech, substituted the word banana for recession. Todays writers might copy his approach, and start fretting that Brazil has left us on the verge of a serious banana."
Now what was that about econo-geek? (laughter)
-- Mr. Decker (email@example.com), July 15, 1999.
-- eyes_open -- Yup. The "banana" thing really did happen. Cracked up the Congressional committee he was testifying before and it made the evening TV news. That was the end of the prohibition on the word "recession".
As for the role public perception plays in the valuation of stocks, it is a truism. The same is true of the value of gold or any other asset. An asset is worth what it can be used for or exchanged for. Each time an exchange is made, perception of worth is a paramount factor. As conditions change, all values float in relation to all others.
-- Sure M. Scared -- The invention of "business depression" as a euphemistic substitute for "bank panic" was a legacy of the Hoover Administration, not FDR. But if Hoover hadn't got there first, I'm sure FDR would have done the same.
The urge to euphemize is standard equipment in humans. The shelf life of a euphemism is usually pretty short. Look at how often we cycle through euphemisms for sexual intercourse and intoxication.
-- Brian McLaughlin (firstname.lastname@example.org), July 15, 1999.
"Slight Growth Retraction" is fine by me, Invar. SGR...pronounced SeeGaR, I guess.
"Bad ideas flourish because they are in the interest of powerful groups."---Paul Krugman
-- (Hallyx@aol.com), July 15, 1999.
Thank you assorted econ-geeks. This computer geek appreciates an informed opinion. Once again, fact is stranger than fiction.
Watch six and keep your...
-- eyes_open (email@example.com), July 15, 1999.
The Panic of 1893:
And I can't remember the politician's name who used it, but "sideways waffling" is another euphemism for recession that's been tried.
-- Linkmeister (firstname.lastname@example.org), July 15, 1999.
What goes up must come down and other worldly phrases used to describe cycles. They are inevitable. The word panic was substituted for depression which was substituted for recession.
Get used to the idea that a panic=depression=recession is inevitable, as it is the only way to balance an out of control amount of debt. The debt must be destroyed. United States = debtors 'R US
-- OR (email@example.com), July 16, 1999.