``Fear matters,'' says Georgia State University economic forecaster Donald Ratajczak, so it doesn't surprise him if the Bush administration is dancing away from using the word ``recession'' to describe the state of the economy. It doesn't surprise Alfred Kahn, either. A retired Cornell University professor, Kahn was chairman of President Carter's Council on Wage and Price Stability. He recalls what happened in 1978 when he suggested that unless inflation were brought under control pronto the nation might face a deep depression. Stuart Eizenstat, a presidential aide, called up and asked him if he might just quit using that word. So next time out, Kahn used ``banana'' when he meant ``depression.'' He talked about The Great Banana of 1929. He said if inflation weren't brought under control, the nation might have a big banana. Kahn learned a political lesson. Fear matters and words alone can trigger fear. Recession is a loaded word, and economists who can't agree on whether the country is in one yet concur that the word itself can spur one on. ``Fear matters,'' said Georgia State's Ratajczak. ``But obviously what's in the pocketbook matters, too. If the pocketbook is still jingling, fear can soon be overcome.'' ``People start looking at their budgets and seeing what they can live without. They tend to make business slow down when they do that,'' said Bob Dieli, an economist for the Northern Trust Co. of Chicago. Small wonder that when the bad news came out Tuesday, six weeks before an election, White House spokesman Marlin Fitzwater said, ``We don't believe we are in a recession right now.'' He was commenting on the Commerce Department's report that the economy grew at a stagnant annual rate of 0.45 percent in the second quarter of this year. And small wonder, at least to linguist Walker Gibson, that Alan Greenspan, chairman of the Federal Reserve Board of Governors, says he'd like to redefine recession. Gibson is founder of the Committee on Public Doublespeak of the National Council of Teachers of English. The usual definition is that a recession occurs after six months of decline in the gross national product, the total value of new goods and services in the nation. Greenspan told Congress last week he'd prefer a less rigid definition. A true recession, he said, is a ``cumulative unwinding of economic activity.'' Richard Rahn, chief economist for the U.S. Chamber of Commerce, said he can't blame the White House for refusing to label the economy's current state a recession. ``If I were the president, I wouldn't say we were in a recession, either,'' Rahn said. ``They are not in a position to give judgment calls the way we and other outsiders are. They are the guardian of the statistics. They need to be very, very cautious.'' The fear that the word recession triggers, said Gibson, tells something about language itself. The word ``recession,'' he said, ``almost certainly started as a euphemism for an even more fearsome word, depression. ``But it's been used so long as a euphemism that it's lost its power to euphemize,'' he said. ``Now they talk about `downturns.'''
