This is a plea to anyone who currently holds a position in news broadcasting. You could be a news anchor, a writer, or even a person likely to be interviewed on economic issues. I am begging you, please, please stop saying the word “recession.” After everyone involved has taken five minutes out of their lives to carefully consider the meaning of the word, you may resume using it, on the sole condition that you do so correctly.
So, to be clear, let me take a moment to share the correct definition here. In the United States, the Bureau of Economic Analysis is responsible for tracking and officially measuring and reporting on the gross domestic product (GDP). This Bureau, one of a number of them under the auspices of the Commerce Department, defines the term as follows:
“A recession is a decline in a country’s gross domestic product, or negative real economic growth, for two or more successive quarters of a year”
Now then. Now that we all are working with the definition, as defined by the organization empowered by law in this country to handle these matters and widely accepted by macro economists, let us consider for a moment how this term might apply to an issue near and dear to my heart and likely to yours: the current status of the United States economy.
The reason I bring up the issue in the first place is that I listen to a combination of NPR news programs during my drive to and from work each day. There has been a lot of talk in the news recently about the economy. Between the sub-prime housing fiasco, high energy costs, and rapidly fluctuating markets the world over driven by uncertainty about the direction of the US economy, there has been plenty to talk about. What drives me up the wall, however, is the frequency with which smart people who should know better use the word “recession” to describe the current state of the economy. I am constantly bombarded with the word for the length of my commute.
The problem, of course, is that in the first quarter of fiscal year 2008, which due to a variety of complex historical factors ran from October 1st to December 31st of last year, the gross domestic product of the United States actually increased. Real economic growth, by any of a wide range of measures, was positive for the last three months of the fiscal year. Certainly some sectors of the economy took a beating, and have continued to do so in the first month of the second quarter of fiscal year 2008 (which began January 1st), but overall the economy actually expanded.
For this reason, we are not currently in a recession. In fact, by definition, we cannot describe the economy as being in recession for at least another six months. Using the term in the way that many people have been is irresponsible, because it says something about the economy that simply isn’t true.
Now, I don’t mean to suggest that there is no reason to be concerned about the US economy, or its potential impact on the larger world economy. There are certainly a number of factors which suggest that we are in for a bumpy ride. I don’t want to detract from the very real need for people to understand what is going on with the economy. I strongly believe that the media has a tremendous obligation to carefully examine these issues.
Especially in an election year, the economy matters to all of us, and there are important choices being made right now on behalf of you and I as to what might be done to correct some of the discouraging signs we’re seeing. The ongoing debate about the details of the economic stimulus package that both the white house and the Congress are working to put into place is vitally important.
I wouldn’t dream of asking anyone to stop having these important conversations. All I’m asking is that when you talk about the economy, especially if you are talking about it through the considerable amplification of a national media outlet, that you take a little bit of care with the words you choose. The R-word has special meaning, and you would do yourself and everyone else a favor to be careful in how you apply it.
-posted by Mark