The Panic Is On!

As the Great Depression of the 1930’s was getting underway, President Herbert Hoover refused to acknowledge it. In the weeks following the events of Black Tuesday, Hoover called the economy “fundamentally sound.” Months later, he still insisted that the strength of the American economy was “unimpaired.” However, by 1931 he could no longer hide the truth. With the economy in shambles, Hoover was forced to declare that America was indeed in a ‘depression’. He chose the word ‘depression’ because he believed it to somewhat innocuous and far less provocative than terms like ‘panics’ or ‘crises’ that had previously been used to refer to significant economic downturns.

That same semantic game is being played on us today. What we now call a ‘recession’ is what was known as a ‘depression’ back in the 1930’s. As economist John Williams explains: (more)