Name this recession
TEXT OF COMMENTARY
BOB MOON: The world is going through a lot of changes right now: some temporary, some not and some who knows? We talked earlier about all ways the government's trying to fix all the trouble we're in. But when we get to the other side of these difficult times, and we will, what will we call this situation -- this period in history? Commentator and economist Justin Wolfers has been looking for an answer.
JUSTIN WOLFERS: The pundits are calling it a "financial crisis." But the economy has been bad enough for long enough that we can't keep labeling it a crisis. Officially it's a recession. But recessions are typically short and mild, and we've already been in this recession for over a year. Still, things aren't as bad as they were in the 1930s, so we can't call it a depression.
So what should we call it? I asked a bunch of economists, and got some great ideas. David Clingingsmith, from Case Western noted that in 1930, "Keynes used the term 'Great Slump'." The only downside? It's "not very poetic, especially for him."
My Wharton colleague, Jeremy Tobacman, was more dramatic, suggesting we call it "The Decline and Fall," which hints at the financial empires that were built on paper and false promises. He's referencing "The History of the Decline and Fall of the Roman Empire," which attributes the empire's decay to the ruinous sloth brought on by years of success. The empire fell when Romans outsourced their defense to mercenaries. Replace the mercenaries with the ratings agencies, and you have the whole story.
My significant other, economist Betsey Stevenson, suggests we call it "The Great Correction," to reflect both the cause of the downturn, and its magnitude. But "correction" suggests that we are reverting to the "correct" level of activity. There are just too many people out of work for any of this to be correct. But Professor Stevenson says she means the great correction as a request: it's time to "correct" lax regulation. If this was the cause, maybe we should call it "The Great Deception," instead.
Perhaps the best idea comes from Doireann Fitzgerald, an Irish economist at Stanford. She suggests we call it a "Clump," short for credit slump; or a "Flump," which denotes a financial slump. As she said, "Flump has a pleasing whiff of incompetence about it." This language lays bare the ineptitude of policymakers, who failed to recognized a clump of flumps.
So, let's keep our fingers crossed that soon enough this incompetence will end, and the economy will emerge from its terrible, ah, what do we call it? Flump.
MOON: Justin Wolfers teaches business and public policy at the University of Pennsylvania's Wharton School.