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The Right Policies Won't Be Adopted Until We Start Using Correct Descriptions & Analogies

I am amazed at how often the articles about Friday's unemployment data refer to how the increasing loss of jobs might impact the economic "recovery."  For example, the lead to the New York Times' coverage said the figure was "tempering hopes for a swift and sustained recovery from the Great Recession."  Similarly, The Washington Post's headline suggested that the statistics would be a "blow to [a] still-fragile recovery."

Huh?  I did not know we were in a "recovery" -- fragile or otherwise.  What I am reading is that the National Bureau of Economic Research (nber.org), which is responsible for declaring both the start and end of a recession, said that the current recession began in December 2007, but it has not yet ended, which it also makes clear in the candid and fact-filled reports posted at its web site.  If the recession hasn't ended that means there are three possibilities: 1) we are near the end, ) we are bouncing along bottom, 3) things are getting worse.  In any of those situations, we can't be in a "recovery" fragile or otherwise.

This is comparable to a person diagnosed with cancer.  If the cancer spreads, the patient is getting worse and thus the patient is still "sick."  If the growth of the cancer has abated, then it can be said that the patient has "stabilized" but is still "sick" nevertheless.  If chemotherapy works and the cancer starts to disappear, then the patient has begun a "recovery."  Whether the person is identified as "sick," "stabilized," or "recovering" will dictate treatment protocol and expectations.  Thus, how we define the situation is extremely critical.

Who authorized newspaper reporters and headline writers to use the word "recovery" in association with our economic situation?  Who said that a CNBC commentator or some other analyst could assert "the recession is over; the recovery is on" and all else should applaud, say "thank you," and understand the situation is getting better?

The way I see things, virtually all trends are heading down, as Friday's job report clearly showed.  Every so often there is an aberrant statistic that simply proves the rule (e.g., the recently-unique and still nominal November 2009 11,000 net job gain), but those aberrations more often simply fuel wishful thinking than abet an accurate diagnosis.  Those of us who have in fact experienced their own or a loved one's encounter with cancer can appreciate the desire to jump from characterizing the patient's situation as better than it is; but they also appreciate how much more effective it is to deal with reality, clearly defined, versus hope.

We're not in a "recovery."  The economic situation isn't even "stabilized."  The economy is still sick -- in a "recession" and appears to be getting even worse.  Aberrations do not make a trend.  Until we start using the right words -- whether in headlines or casual conversation -- we do not have a prayer of diagnosing the situation clearly, and that means that we also don't have a prayer or designing, getting support for and implementing either business, personal or governmental policies correctly.



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