Recession Over? Let’s Get This Straight.

29 09 2010

Last week the National Bureau of Economic Research reported that the recession officially ended in June of 2009.  For the week since then I have seen the issue rehashed over and over on the news.  Mostly, people are indignant and incredulous.  “How can the recession be over?” they say, “The economy still sucks!”  These critics are only half right.

You see, economists and the lay public have vastly different definitions for the word recession.  For economists, a recession is a period during which economic activity declines.  Strictly speaking, economic activity did indeed stop declining in June of 2009 and it has been gradually improving overall since then.  So the economists are correct.

The disconnect appears with the lay public’s definition of recession.  They usually define it as “The Recession” with a capital “R.” It means a period of time (now) during which the economy is performing poorly.  And by that definition, they are correct.  The economy is still performing poorly even though economic activity has been slowly improving since June 2009.  But the fact is, they are talking about something completely different than what the economists are talking about when they say the recession is over.

It may seem like a petty distinction to make but I believe it is hugely important.  It appalls me that so many people are willing to dismiss the work of these economists and other experts out of hand and they don’t even realize they are talking about completely different things.  This is a huge problem in all areas where the lay public weighs in on complex issues that they don’t completely understand.  I’m guilty of this, too and I am constantly checking myself to make sure my definition of events or concepts matches those of the person or people with whom I am disagreeing.

I’ve seen plenty of examples of disagreement because of different definitions in my life.  Try asking members of different Christian sects to define what it means to be a Christian.  You’ll quickly understand why it’s so hard for some sects to get along.  Ask a Republican and a Democrat to define socialism.  Ask a man and a woman to define dating.

The point I want to get across is this, when you disagree with somebody take a moment and make sure your mental dictionaries are on the same page.  That way you won’t end up disagreeing about different things when you think you’re disagreeing about the same thing.

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One response

29 09 2010
Randal

I know what you mean. It seems to me that many disagreements are caused because the parties have different definitions of the same term. Remember the conversations we had with Daniel Harker about being “blindly obedient”? It seems like most of the conversation was spend just trying to figure out what each other meant by the term

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