Brad Delong has had enough. So have I.
Back in late 2008 people asked me: is this a recession or a depression? I said that I would call it a depression if the unemployment rate kissed 12%. I said that I would call it a depression if the unemployment rate stayed above 10% for a year.
Neither of those has come to pass. But the unemployment rate has kissed 10%, and has stayed at or above 9% for two years now.
So I am moving the goalposts. I am adopting a suggestion in comments of Full Employment Hawk . Henceforth, I will call the current unpleasantness not “The Great Recession,” but rather “The Little Depression.”
It’s a good question. In late 2008 when people were asking me, I said I wasn’t sure. It would either be “The Great Recession” or “The Lesser Depression”, I said. Eventually I fell in line with most commentators and referred to it as “Great Recession”. But with the continuing bad, very bad, news on employment, wages, and growth, I’m with Brad. We need to call this what it is. It’s not been a “Great Recession”. Recessions are events when the central bank says things have gotten out of hand, they raise interest rates, and everybody sobers up. Then after an appropriate time of perhaps 6-12 months, the growth machine fires up and we start to regain lost territory. This is different. We aren’t regaining lost ground and people are suffering.
What most folks are calling the “Great Recession” I think we ought to call the “Panic of 2008”. It was, after all, a good old-fashioned financial panic updated with 21st century technology and corporate forms. It lasted roughly the time period the NBER says was the recession.
What has me going though is the continuing poor conditions for the millions of Americans. This unpleasantness has gone on too long and been too severe to call it recession. It’s a depression of some form. The problem here is how to distinquish it semantically from the Great Depression of 1929-1940, or the Long Depression of 1873-1896. My personal preference is for Workers’ Depression. I think it sums it up. For the banks and rentier classes, it’s good times again. It’s only for working stiffs that things continue so ugly. But if people want to use “Little Depression”, I could go along for the sake of clarity.