Four Erroneous Phrases

Over the last few months, four phrases have been used frequently in describing our economic condition.  I find these phrases to be inaccurate and misleading.

Here are the four phrases (in italics) and some brief commentary:

“the Great Recession”

Many people have labeled the economic weakness (ended by the subsequent purported economic recovery) as “the Great Recession.”  This appears to be in recognition of a deep recession that in many ways seemed to be second only to The Great Depression as far as severity.

I believe the phrase to be inaccurate as my analysis indicates we have yet to experience the full extent of the economic weakness –  and as such categorizing weakness to date is premature.  Also, I find the term “Great Recession” to be rather glib and flippant, as it minimizes the extent of our economic difficulties.

“employment is a lagging indicator”

This phrase is heard constantly.  It seems as if the more it is said, the more accepted it becomes.  I believe that although employment may have been a “lagging indicator” in the past, during our current period of economic weakness it is either a coincident or leading indicator, depending upon the time horizon and other guidelines used.

“saddling our children / grandchildren with debt”

This phrase, and variants, is often heard in relation to the expansion of deficits and national debt.  While I don’t believe it is wholly inaccurate, I think it embodies various mistaken beliefs.  Among these mistaken beliefs are that we as a country will not face near-term repercussions from our amassing of debts; and that the worst consequence (and only one worthy of mention) of our current economic actions with regard to future generations’ prosperity is our amassing of debt.

The broader, and more important question –  which is seemingly never mentioned – is whether we are acting as “good stewards” in relation to the economic condition that will be faced by future generations.  In essence, is the current generation promoting an economic environment that will bode well for future generations?  I will likely discuss this topic in the future.

the “Flash Crash”

This phrase has been frequently used to describe the sudden, deep decline of the stock market on May 6.  I don’t think the phrase is accurate for a number of reasons.  Again, the phrase sounds glib and implies that the decline lacked (lasting) significance or happened without significant reason or provocation.


There are many other erroneous phrases used frequently to discuss our economic condition.  In the future I will highlight others that I believe have outsized significance.

back to <home>

SPX at 1074.33 as this post is written