The Great Sadness

Marking the anniversary of the collapse of Lehman Brothers, Federal Reserve Chairman, Ben BernankeBen Bernanke remarked yesterday that the recession is “very likely over.” In an economy rift with paradoxes, oxymoron, and ambiguity, Bernanke’s word choice is predictably vague. In a way, the chairman demonstrates the latest attempt by someone in a position of authority to put a positive spin on the apparently negative spiral that is the economy.

Strategically avoiding a more definitive statement, he protects himself from the inevitable criticism he should face in coming months. Unemployment figures are expected to continue climbing, housing prices remain low, credit and bank loans remain scarce, and little Johnny will have to settle for a lump of coal this Christmas, not because he’s been naughty, but because it's all Mommy and Daddy can afford.

It’s not his fault. It’s important for him to try to generate a positive outlook and communicate to the public that he and the people around him are doing all they can to address the current crisis. Given the widespread skepticism and worry, however, it doesn’t seem to be working. For those whose unemployment benefits will expire and the several others who have yet to be laid off, not only is the recession not “very likely over,” it is only just beginning. It’s as if the weather forecast called for scattered showers and what actually came was a typhoon.

For his part, President Obama has done the same thing. Between the bank bailouts and the automaker interventions along with his broad stimulus package, he too claims that the economic malaise is coming to an end. In fairness, that may be true, but few people in line at the unemployment office can point to any specific benefits they’ve received under the plan. Of course the underlying effects of the stimulus have only recently been applied and it’s probably too early to measure their positive or negative effects. A successful stimulus has obvious political benefits to the president, but, more importantly, the people need it to work and need to see it working. So far what people are told and what they are experiencing have differed tremendously.

Considering how long ago the Great Depression was, few people are alive today who can make a real world, experiential comparison to the current scenario. While the term “recession” is bandied about, almost any adult with a reasonable memory would testify that this is unlike anything we've seen before.

Nothing in this one is as it appears. Unemployment figures account only for new and continuing claims. No accurate figure exists to count those whose benefits have run out, individuals who are still working but have had hours reduced and/or salaries cut or frozen, people who can only find part-time work and can’t make ends meet, or those who have simply given up. If these factors are weighed into the unemployment picture, the image is much gloomier.

Even the Lehman Brothers fall served only to punctuate this recession which officially began several months earlier. With more dire economic news on the horizon, is it really any wonder that phrases like "very likely over" fall so flat? No, this is not economic déjà vu. This is something very different.

Yet “Recession,” continues to be the word of choice for economists and politicians, perhaps for lack of a better term. Of course, no one would dare use “depression” for it either. It’s not a depression; it’s a sadness… a great sadness. There is sadness because people are loosing jobs, homes and possessions. There is sadness because a layoff may be looming or a collection call may come about that missed credit card payment. There is sadness when a much-needed loan or line of credit is denied.

Optimistically, it is likely that there will be economic recovery but it probably won’t be marked by a specific date on the calendar. Relief will come at different times for different people. One thing is certain, it won’t be truly over until the dark cloud of The Great Sadness is lifted.