Depression, Recession, Slump -- Cheapening the Meaning of Words

Dec 2, 2013

In clear, effective quantation, the words we put around the numbers are often as important for audience comprehension as the numbers themselves. In this morning’s Washington Post is an excellent op-ed piece, “What to call this economy?” by Robert Samuelson, where he observes that we lack the economic vocabulary to describe the current state of the U.S. economy.

Our economy is currently in a state that defies one- or two-word descriptions, or at least any that we’ve come up with so far. By comparison, Samuelson recalls the mid-1970s, when the term “stagflation” emerged to describe an economy with both high inflation and high unemployment. A popular (if I may use that word here) metric that emerged was the “misery index,” calculated as the unemployment rate plus the inflation rate. Although the economic conditions of that era haven’t really recurred, these terms were both descriptive and quantifiable. That is a good thing.

Unfortunately, Paul Krugman and other writers have suggested the economy of today is marked by “depression-like conditions.” Samuelson suggests that is really stretching things, since there is no widely-used, conventional definition for “depression,” and in any case, objectively measurable economic conditions in the U.S. are nowhere near what they were like during the real depression in the 1930s. Nor in the Greece and Spain of today, for that matter.

More important, using words like “depression” simply to make a point cheapens the meaning of those words, while adding nothing to our understanding of the underlying numbers. The death of a dozen or so people in a violent incident is certainly tragic and senseless, but to label such an incident a “holocaust,” as is occasionally done, is not a useful contribution to the English language or to quantation.

“Painting with Numbers” is my effort to get people talking about financial statements and other numbers in ways that we can all understand. I welcome your interest and your feedback.

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