Horse Cents

As talk of flagging consumer confidence continues to intersperse itself with promises of impending economic recovery, I can't help but wonder how "recovery" came to be associated with economics. People and animals "recover" from what ails them, but economies more probably "improve." Recovery has as a primary connotation the presumption that things were fine; something went awry; you were sick; and then you got well. That is, you needed to "recover" from what ailed you, because what ailed you was an aberration from your ordinary and sustainable state of being.

But if the Dow Jones crossing 14,000 three years ago in October was actually the aberration from what should have been its real state at that time (and that is the foregone conclusion of the well documented "housing bubble" of the same era), then what is the definition of "recovering" from the burst bubble? Recovery in that context would amount to one of two things: Taking cover in another bubble for as long as it would last, or the emergence of an innovation so significant that it would go global and foster a host of supporting business niches. In the former scenario, the "recovery" would be tantamount to getting sober by getting drunk; the latter scenario isn't so much "recovery" as "improvement,” which is unlikely to occur as a calculated response to recent disaster. True innovations do not share a linear path with the things that inspire them, so one cannot know when the next game-changer will arrive.

Why we continue to refer to the inevitable sobering up from the drunken state of the housing bubble as something that requires “recovery” rather than improvement is a mystery whose answers get further away with each mention of the word “recovery.” It is like wishing to return to the over-indulgence that led to the brutal hangover, pretending that the one didn’t cause the other. With its implicit focus on how things were, it surely amounts to looking backwards with the belief that you are looking forward, not unlike the pilot who loses that critical distinction between up and down while flying over the ocean at night. For the time being, down really is up for us, and it will be that way until we start looking forward to improvement instead of backwards to “recovery,” or until the next legitimate game-changer arrives.