I, for one, am quite tired of the current avoidence of the obvious (it started in 2001, btw).
Q:
When did 1930-1941 start to be called a depression? I’m guessing the “Great” label was added decades later. Did FDR ever use the term? His first inaugural “declared war” on it without naming it.
The current recession started in 2008 to the best of my knowledge. There was a small downturn in 2001 that almost didn’t qualify as a depression. This one is the nastiest I’ve lived through (I’m 47). The only way to call it a depression is if you’ve lost your own job. The Great Depression was just a hell of a lot worse, with 24 percent unemployment, starvation and people losing money in bank failures.
While unemployment is high, particularly in California, it is not 15 percent. Banks fail, but all the small depositors are getting all their money due to buy outs, etc. Yes, some people are not being feed a full caloric intake, and you might call this a small depression, but it is nothing like the bad old days. Yet.
How are you defining ‘depression’?
Here’s an article that looks pretty good from the History News Network. Says there that “depression” used to be a general term that was attached to economic downturns. Didn’t get its capitalization until sometime during the Depression. And even today, there’s no precise technical definition of the word, although some people say that a ten percent drop in GDP should qualify as a depression.
Continuous economic slide, currently with 20% unemployment in the US? I do wish I had clipped that little blurb, but within the last 3 months, the fellow who (previous administration) had the job on pub;ishing the federal unemployment number was quoted as saying that, if unemployment were counted as it was under his watch, it would be 20%, not the much-more-palatable 10% currently quoted.
Now, back to the question - when was 1930-1941 first called a depression.
Bank accounts are insured exactly because of 1929.
Here’s a fun read:
http://www.fdic.gov/bank/individual/failed/banklist.html
I did a quick library search and the first book titled The Great Depression I could find was from 1936. There were others during the 30s as well. That was limited to books starting with those words. There could have been earlier ones.
Herbert Hoover made a speech to the American Legion convention on September 21, 1931 that said “I need not recount that the world is passing through a great depression,” but newspapers did not capitalize the term.
Even so, the term was regularly being used by then. The Humboldt Republican, on Sept. 4, 1931, started is lead article by saying, 'All signs of the great depression," again not in caps. You can find it in many additional articles.
Like the others, I can’t imagine any possible use of the term to describe the economy of the 2000s. We’re not within a million miles of a depression now and every other year before the start of this recession in 2008 was way better in every economic indicator.
Your cite is meaningless. Thousands of banks failed in the Great Depression. That list isn’t a pimple on that number. You also need to have a real cite of a real quote for us to make something of. There’s far more to a depression than unemployment numbers, but let’s assume that the 20% number - which could be true only if counting the underemployed, stopped looking, and part-timers, something that has never been the definition of unemployment - would still be far, far less than the percentage in the 30s, which under that definition would have been closer to 50%.
I missed Hellestal’s post while I was working on this. The 1936 book I referred to is the same as the one in his link by Lionel Robbins, given as 1934. The one in the library might be a later edition.
A search of US newspapers turns it up in popular use(uncapitalized) extensively starting in 1931. Capitalization of the term in news articles isn’t done much at all. It’s mostly book titles.
I think a depression is a ten percent reduction in gross national product, anythime one has that, it is time to use the word. I think we only got to 6 or 7 in this one, right? Press likes to confuse, especially before the election, by saying the rate would be so and so for a year based on just a month or two numbers, they don’t like saying what it actually came out to be later.
“Depression” in 1930 was the standard term for any economic downturn. It was considered less pejorative than the older term – a “panic.” After the Great Depression, economists started using “recession” to mean the same thing.
What RealityChuck says is right, but the term was invented in the 1890s to describe what was currently happening without calling it a “panic”, which was the common term of the day.
“Recession” was created after the Great Depression as a milder form still. I believe at least the term “recession” (and possibly the term “depression”) were originally invented by the Wall Street Journal, but I don’t have a cite. They were invented without definition - it’s like pornography: you know it when you see it - but people later decided to nominate two successive quarters of negative real GDP as a “textbook” recession.
I am pretty sure that “depression” was used for what we now call a recession. But the connotations were so negative that the word “recession” was adapted for a relatively short depression. Whether this “Great Recession” ought to be called a depression won’t be known for a few years.
Interesting fact. In, I am almost certain, December 2007, there was an op-ed piece in the NYTimes by an academic economist. She claimed that she had discovered a set of economic indicators that unfailingly indicated whether we were heading into recession. She claimed that it retrodicted every recession since WWII and also had no false positives. Then she claimed that her indicators showed that we were not heading into a recession. She may have been right.
Of course, everything was different. Never had we headed into a recession on the basis of subprime mortgages, vacuum-backed securities and all the other gadgets that the overpaid bankers could dream up to increase their short-term income. Still, it would be nice if she were to publish a mea culpa piece.
Ummmm…
About those bank failures - IANAE, so I will point to generalalities - those modern failures are DESPITE financialfiduciary regs (see: Comptroller of the Currency) that were intended to make bank failures all but impossible.
The really scary thing about current mess - what will pull us (US) out? We have exported pretty much all manufacturing jobs, the financial industry is in shambles, we’ve still have some natural resources, but, let’s face it - China pretty much OWNS the US - when the President of the US has to go, hat in hand, to Beijing to ask them to please loan us the money for the Stimulus program, we are in deep doo-doo.
We have now discovered that our houses raren’t really worth $1,000,000, but we sure had fun pretending, eh?
The bankers remind me of the loggers arguing that they were entitled to at least half of the remaing 5% of the great redwoods in northern CA - they have already plundered 95% of the wealth, but still think they are entitled to the rest of it as well.
Anyway - thanks to those who found the early references.
Phu-leese. China owns about as many treasuries as the Japanese, which is nearly USD800 billion. What’s the “market cap” of the entire United States? Annual GDPalone is approximately USD14 trillion.
President Obama did not go hat in hand and ask for loan. In fact, there’s probably plenty of pent up demand for USD safe assets that the Chinese could unwind their position.
It was coined even before then, according to the awesome link that I already linked (link). James Monroe apparently used “a depression” to describe the Panic of 1819.
I disagree. Capitalization seems to be standard in most American high school text books. I checked Webster’s. I looked up Depression glass and it is capitalized there. And the origin of Depression glass refers to “Great Depression of 1929.”
Judging from the lifestyle of people I know who survived the Great Depression, the recent recession was nothing to compare with it. There was a lot more penny pinching. There was less outside help to turn to. I know someone whose family had to cut down from flour based biscuits at breakfast to cornmeal based bread just to save money. My father couldn’t find a job and so he worked for free for someone and told them if he wasn’t worth anything not to pay him, but if he was, just to give him something. They paid him and hired him. Movies were ten cents but a lot of people couldn’t afford to go. My mother saved for months just for a pair of houseshoes. When hemlines dropped, women added ruffles to their dresses rather than buy new ones.
My grandson has an afterschool job and hasn’t even gotten around to picking up his birthday and Christmas money yet. That would never have happened during the Great Depression.
People referred to the downturn that started in 1929 as a “depression” almost instantly: John D. Rockefeller for instance was calling it a depression in the months after the stock market crash on Black Tuesday. But as people have pointed out, the term “depression” back then corresponded roughly to the term “downturn” nowadays.
A recession here in the UK is defined as two consecutive quarters of negative growth. In the US the definition is more vague, with the National Bureau of Economic Research calling it, “a significant decline in [the] economic activity spread across the country, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales”.
Nowadays a modern “depression” would probably have to be characterized by conditions that start to approach those seen in the Great Depression: unemployment between 15-25% for a number of years and GDP falling by up to 30%. In the current recession unemployment is around 10% and GDP has fallen by less than 10%.
Your idea that there’s been a depression from 2001-2010 is just ridiculous - 8 consecutive years of positive growth, with fairly low unemployment, cannot under any definition constitute a depression.
Yeah, I get tired of reading this “China owns us” nonsense, too. China owns, as China Guy says, about $800 billion in US Treasury debt. That’s about four months worth of federal tax revenue.
With the ten-year T-bill currently yielding 3.70, and short-term rates near zero, it doesn’t appear that people with money to invest think that China is ready to dump US debt, or that it would be a disaster if they did.
In addition, the OP stated that we have exported “nearly all manufacturing jobs”. That is not even close to being the truth. We have exported lots of them, certainly enough to hurt lots of people and even entire states, but there are still millions of factory jobs in the US.
Sorry to be unclear. The term “Great Depression,” with both letters capitalized, was essentially not done in newspaper articles, at least the few thousand I checked from 1930-1985. I can’t speak to the last 25 years.
I wonder if the capitalized words were standard in High School texts from 1935-1980 or so?
As to “Depression glass,” the term for that kind of glass only started being used around 1969, so I wouldn’t use that as an indicator.
sam, I haven’t found any references to the Depression in my old textbooks, but they had to be returned to the State after about 1953. I will see what Zeldar has available in the way of old textbooks and dictionaries tomorrow. Thirty years seems a reasonable amount of time for me to have forgotten that it wasn’t always that way.
(Not a textbook, but…) I am looking at a set of the American Heritage New Illustrated History of the United States published in 1963. The volume on “The Roosevelt Era” covers at length the stock market crash of 1929 and the ensuing depression, but there is no capitalization of “depression” and the phrase “The Great Depression” is not used.