Psycho Recovery

Now that the recession is nearly two years old, it could end simply because we decide it’s time for it to end, suggests Robert J. Shiller in the New York Times (11/22/09). After all, most recessions last about two years, and the whole psychology of a recession is that it’s part of a normal cycle that has a beginning, a middle and an end. Unless, of course, it isn’t. The term "recession" emerged in 1938, as a less fearsome alternative to "the Great Depression, which received its name … from a 1934 book with that title (link) by Lionel Robbins."

President Roosevelt wasn’t exactly into the semantics: "It makes no difference to me whether you call it a recession or a depression," he said at the time. The Chicago Daily Tribune, meanwhile, dismissed recession "as a new word for depression, coined by those who don’t like to admit that we’re still in one." But there is a difference between the words, if only in our heads. A "recession" sounds like it "can be shrugged off as something from which you recover, as though your doctor had just diagnosed an illness as a common cold."

A "depression," however suggests a far more serious condition, and one that probably won’t end anytime soon, if ever. "In important ways," writes Robert, "we are still using that 1930s pattern of thinking. We are instinctively fearful of reckless talk about depressions, and we try to support one another’s confidence … For now, our common efforts at building confidence appear to be working somewhat." And perhaps the only thing we have to fear is not fear itself, but rather "the nagging doubt afloat that the current event is really just another example in that long sequence of recessions."