“If the notion that we are merely living through the aftereffects of a mere ‘recession’ that ended in 2009 sounds somewhat ridiculous, that’s because it is,” says Richard A. Posner, a federal judge and law school lecturer based in Chicago. “If we were being honest with ourselves, we would call this a depression. That would certainly better convey both the severity of our problems, and the fact that those problems have no evident solutions.” (See: Let’s Be Honest: We’re in a Depression, Not a Recession, And There’s No End In Sight, August 22, 2011)
Posner is an authority on both the law and economics, a man widely cited for his insight and analysis.
So is Posner right?
We usually think of a “recession” as a period when there have been straight quarters of economic decline. A “depression” is something worse. It’s a 10 percent drop in the gross national product or a decline that lasts at least three years, according to The Economist.
But forget academic definitions. When a large percentage of the population is hurting it’s a depression.
- If you’ve lost your job it’s a depression.
- If you’re underpaid because you’re afraid to leave your job it’s a depression.
- If your mortgage debt is bigger than the value of your home it’s a depression.
- If you’ve saved for years and now your nest-egg produces virtually no income because interest rates are near zero it’s a depression.
- If you don’t have health insurance and break your arm it’s a depression.
- If you can’t send your kid to college even with two scholarships it’s a depression.
- If your kid graduates from college and can’t get a job it’s a depression.
- If your company no longer has the skills or equipment to fix something made in America 30 years ago it’s a depression.
- If you’re a government worker with 20 years on the job and your governor thinks money can be saved by reducing your benefits or eliminating your position, it’s a depression.
- If your company wants to increase shareholder returns by downsizing, rightsizing, reorganizing, or restructuring it’s a depression.
- If corporate leaders get executive bonuses and your salary is frozen it’s a depression.
- If your employer is making big profits, paying almost no taxes and cutting back your benefits and hours, it’s a depression.
- If you’re a skilled employee and you must compete with workers overseas who make 75 cents an hour, it’s a depression.
- If you’re a farmer and your crops lack water it’s a depression.
- If your law firm has cut back on its professional staff, if your college no longer grants tenure, if the human resources department has 500 resumes for your job, it’s a depression.
What do you think? What’s your definition of a depression? Please add your comments below.