The 'Non-Recession' Has America in Denial: No one wants to mention the R word, despite ample evidence that the economy is getting weaker.(Judgment Calls)(Business)(Brief Article)

Publication: Newsweek

Publication Date: 27-AUG-01

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Back in the late 1970s, Cornell University economist Alfred Kahn briefly oversaw the Carter administration's voluntary wage-price guidelines. Kahn was (and is) a jovial soul whose power and influence suffered from his stubborn candor and sense of humor. He once irked the White House by suggesting that rampaging inflation might lead to a recession or a "deep, deep depression"--an assessment that Carter's aides promptly disavowed. Kahn retreated and promised that, in the future, he would refer to a recession as a "banana." He later shifted to kumquat after a big banana company complained.

We are, it seems, now in a comparable situation. No one wants to utter the R word, because it signifies a symbolic threshold that, if crossed, might worsen consumer, business and investor psychology. The silence is rationalized by the popular convention of defining a banana as two consecutive quarters of declining economic output,...

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