If a man has fallen (or jumped) from the roof of a 20-story building, does it matter whether or not he acknowledges, at about the 10th floor, that he indeed seems to be in mid-flight headed toward an unpleasant landing?
Ball State University economist Michael Hicks has been among the holdouts who have insisted, for months now, that the economy had not slipped into recession. On Monday, Hicks said he’s changed his mind: We’re in a recession.
Hicks said he’s not sure if the local and state economies will see far greater job loss, but he acknowledged unemployment will rise and that the recession “experience” will be new to most people: The last two recessions, in 2001 and 1991, were the mildest since World War II and came at a time when people were preoccupied by other events: The 9-11 terror attacks and the first Gulf War.
For one thing, people are already behaving as if they’re in a recession (e.g., spending less), so the technical definition doesn’t matter as much. For another, it’s such a mild-sounding term considering the fact that the world’s economy seems hovering on the edge of a free-fall. Recession? A little slowdown, a temporary bump in the unemployment rate? That’s not scary. The current crisis being “fixed” by the same politicians who caused it — now, that’s scary.