The redoubtable Seventh Circuit Appeals Court Judge Richard Posner (“the most cited legal scholar of all time”; “probably the greatest living American jurist”), isn’t afraid to call it as he sees it, and given Posner’s brains, experience, and economic cred as an antitrust expert, he may be more credible than your average, run-of-the-mill economist (“economists exist to make astrologers look good”).
In Posner’s newest book, A Failure of Capitalism: The Crisis of ’08 and the Descent Into Depression, he states:
The world’s banking system collapsed last fall, was placed on life support at a cost of some trillions of dollars, and remains comatose. We may be too close to the event to grasp its enormity. A vocabulary rich only in euphemisms calls what has happened to the economy a “recession.” We are well beyond that. We are in the midst of the biggest economic crisis since the Great Depression of the 1930’s. It began as a recession — that is true — in December 2007, though it was not so gentle a downturn that it should have taken almost a year for economists to agree that a recession had begun then. (Economists have become a lagging indicator of our economic troubles.)
The word itself is taboo in respectable circles, reflecting a kind of magical thinking: if we don’t call the economic crisis a “depression,” it can’t be one. But no one who has lived through the modest downturns in the American economy of recent decades could think them comparable to the present situation. It is the gravity of the economic downturn, the radicalism of the government’s responses, and the pervading sense of crisis that mark what the economy is going through as a depression.
Apparently Freakenomics got an advance copy of the book, and was able to post these quotes.