Generally where economic discussions are concerned, I tend to think that the last thing we need to better inform the public is more terms and phrases. I said God Damn, but they just love the jargon, don’t they?
Still, with Senator Phill Gramm’s “Whiner” talk as context, it seems like perhaps there is a much wider chasm between the words we use to describe our economy and the reality. Because the word “Recession” doesn’t quite cover what we’re seeing.
As Phil Gramm and George Will both correctly point out, we are not precisely in a recession: a recession is generally marked by economists as a period of two consecutive quarters where GNP falls. We seem to be see-sawing our way through our current economic crisis, losing one quarter and gaining the next. But whether or not that actual threshold has passed is immaterial to the pain felt by most average Americans as a result of our current economic situation. See-sawing we may indeed be doing, but it’s been going on for the last eight years and the trend is generally downward.
One problem that might account for the disparity between economic indicators and public sentiment may be that since American companies produce oil all over the world, $145 a barrel pricing doubtless has some buoying effect on our GNP, obviously without the economic upside for the rest of us. For the rest of us, that same boon to the oil industry is a hardship. Another problem is that when the economy does well, we worker bees tend to expect pay raises and such. But in the stagnant economy of the 21st century, many of us work in companies that have long-since frozen wages.
So, if we’re not in a recession by precise standards, what is it? Clearly, Phil Gramm’s comments are not well-received, but perhaps more importantly, they depict a very real difference between how Wall Street tycoons and others see the economy as compared to those of us actually living in it. On a purely political level, I think it’s fantastic that McCain’s camp had to dance around this issue, but it’s the truth of what he said that is most troublesome.
What that word aught to be, I don’t know. Perhaps “Economic Orphanage” is more appropriate?